Your Operating Agreement Has an Arbitration Clause. Can You Still Get to Court When You Need To?

Your Operating Agreement Has an Arbitration Clause. Can You Still Get to Court When You Need To?

Here's a scenario I've seen play out more than once. Two business partners hit a wall. Trust is gone, and one side is worried the other is about to do something that can't be undone: move money, sell an asset, lock a third party out of the business. Someone needs a court to step in right now.

Then someone pulls out the operating agreement and points to the arbitration clause. "This has to go to arbitration. The court doesn't get a say."

That's not a hypothetical. It's the exact question the Wisconsin Court of Appeals answered this spring, in a case involving a Madison-area business and a fight between its owners.

What the Court Decided

The case is Herbal Aspect LLC v. Gish, decided April 30, 2026. No Wisconsin court had answered this question before. Lawyers call that a case of first impression.

The co-owners of an LLC were fighting over who controlled the company. Their operating agreement, like a lot of operating agreements, required disputes to go to arbitration. One side asked for a temporary injunction to hold things in place while that arbitration played out. The other side argued the court had no business getting involved at all once arbitration was on the table.

The court disagreed. Even when a dispute is headed to arbitration, a Wisconsin court can still step in and freeze things in place while that arbitration gets going.

Here's the plain-language version of why. Wisconsin's arbitration statute (Wis. Stat. § 788.02) requires a court to stay the trial of a case once it's clear the dispute belongs in arbitration. But "staying the trial" isn't the same as "the court can't do anything." The court's general authority to grant temporary injunctions under Wis. Stat. § 813.02 doesn't disappear because arbitration is coming. Deciding whether to freeze the situation for now, without deciding who's actually right, doesn't step on arbitration's toes.

If anything, the court reasoned that this kind of short-term relief protects the point of arbitration. It makes sure there's still something left to arbitrate by the time the arbitrator gets involved.

I think that's the right answer. And it's the one I'd want if I were the owner watching the clock.

The operating agreement also incorporated the American Arbitration Association's Commercial Arbitration Rules. One of those rules says that asking a court for interim relief isn't inconsistent with the agreement to arbitrate, and doesn't waive it. That language mattered. The parties had built room for court involvement into their own agreement, whether or not they realized it when they signed.

Worth noting: the court didn't say the injunction should be granted. It sent the case back so the trial court could decide that question on its merits.

To actually get that kind of temporary relief, a business owner still has to clear the same four hurdles Wisconsin courts have long required:

1. A reasonable probability of success on the merits: you're likely to win the real fight.
2. A likelihood of irreparable harm without the injunction: damage money can't fix later.
3. No adequate remedy at law: a check after the fact wouldn't make you whole.
4. The injunction is necessary to preserve the status quo: it holds things in place rather than handing you a win early.

None of that changes because arbitration is in the picture. It means the door to court isn't automatically closed.

Why This Isn't Just a Litigator's Question

I understand why this sounds like a technical procedural fight that only matters once things have already gone sideways. But that's exactly the problem. The moment you actually need to know what your arbitration clause allows is the worst possible moment to be reading it for the first time.

Most owners never look closely at that clause. It gets pulled from a template, dropped into the operating agreement, and forgotten. Right up until a partnership falls apart and somebody needs the court's help today, not after an arbitrator gets appointed.

Born a Litigator: Why I Read This Clause Differently

I spent more than fifteen years in courtrooms arguing about what agreements actually mean when the people who signed them disagree. That's not a credential I mention for its own sake. It's why I read an arbitration clause differently than someone who's only ever drafted one. I don't just review contracts. I review what happens when they fail.

When I'm working on an operating agreement, I'm not checking a box that says "has an arbitration clause." I'm asking what that clause actually does in the moment it matters most: the moment someone needs a court to freeze things in place while the real fight gets sorted out elsewhere. That's a drafting decision, not an afterthought. And it's easy to get wrong when nobody's had to argue it in front of a judge.

Here's the detail I'd flag for any owner. These parties had also opted into the AAA's expedited procedures, and that one choice turned off the rule that lets an emergency arbitrator step in before a panel is formed. The court also left open whether an agreement could shut off court relief entirely. What your clause says, or doesn't say, could decide whether that option exists when you need it.

What to Check in Your Own Agreement

You don't need a law degree to ask a few pointed questions about your own operating agreement:

• Does your arbitration clause say anything about temporary or emergency relief, or is it silent?
• What arbitration rules does it incorporate, and have you read what they say about going to court before arbitration starts?
• Did your agreement opt into expedited or streamlined procedures, and do you know what that choice turned off?
• If a co-owner tried to do something irreversible tomorrow, would you know where to go first?

If you don't know the answer to any of those, that's not a failure. It just means nobody's stress-tested the document yet.

Those two partners from the beginning? The best time for them to find out what their clause allowed was the day they signed it.

If you've never sat down and read the arbitration clause in your own operating agreement, that's a conversation worth having before you need it, not after. Reach out directly and we'll find a time to talk.