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Arbitration Law Memo February 2004
by Ross Runkel at LawMemo
*** Arbitration - Individual contracts ***
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TX - Employer failed to establish intent to be bound by unsigned arbitration agreement.
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CA - One-sided arbitration provisions were unconscionable, not severable.
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6th - One-sided arbitrator selection provision is unenforceable, perhaps severable.
*** Arbitration - Collective bargaining agreements ***
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Fed - Award vacated; Arbitrator substituted his own charge for the employer's.
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PA - "Misspeaking" during Med-Arb was not enough to vacate award.
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PA - Arbitrator did not exceed powers in overturning transfer.
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MA - Employee must elect between arbitration and appeal to civil service commission.
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WI - Finding that union acted in bad faith was not supported by evidence of improper motive.
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7th - Employer waived argument of ownership of company in arbitration hearing.
***
Arbitration - Individual contracts ***
TX
- Employer failed to establish intent to be bound by unsigned arbitration
agreement.
In
re Bunzl USA, Inc. (Texas Ct App 01/08/2004)
http://www.8thcoa.courts.state.tx.us/opinions/htmlopinion.asp?OpinionId=62648
The
employee sued his employer asserting state law race and ethnicity discrimination
claims, and for intentional infliction of emotional distress.
The employer moved to compel arbitration, but the trial court rejected
that motion. The Court of Appeals
affirmed. The arbitration agreement
was unsigned. Although unsigned
arbitration agreements are not necessarily unenforceable, an employer faced with
such an agreement must provide sufficient evidence demonstrating that the
parties agreed to arbitrate the disputes at issue.
The court concluded that, given the evidence presented, the trial court
could have reasonably concluded that the employer failed to establish the
existence of an agreement to arbitrate.
CA
- One-sided arbitration provisions
were unconscionable, not severable.
Abramson
v.Juniper Networks (California Ct App 02/06/2004)
http://caselaw.lp.findlaw.com/data2/californiastatecases/h025840.pdf
Abramson
sued the employer asserting various claims, including breach of contract, fraud,
misrepresentation, and wrongful discharge in violation of public policy.
The trial court granted the employer's motion to compel arbitration, and
ultimately dismissed the employee's case on the basis that the employee failed
to exhaust his arbitral remedies. The
Court of Appeal reversed. The court
found that, with respect to the claim for wrongful discharge in violation of
public policy, the arbitration agreement was unenforceable because the employee
was required to pay forum fees that would not have been required in litigation.
With regard to the remaining claims, the court found that the arbitration
agreement was unconscionable. Unconscionability was based on the fact that the
agreement required the employee to arbitrate all claims but allowed the employer
to seek judicial relief for alleged violation of intellectual property rights.
Finally, the court found that the unenforceable provisions of the arbitration
agreement were not severable.
6th
- One-sided arbitrator selection provision is unenforceable, perhaps severable.
McMullen
v. Meijer, Inc. (6th Cir 01/14/2004)
http://laws.findlaw.com/6th/04a0015a.html
McMullen
sought a declaratory judgment that her Title VII claims weren't subject to the
mandatory arbitration agreement she signed at inception of employment.
Under the agreement, the arbitrator was to be selected from a list
compiled solely by the employer. McMullen
argued that the employer's unilateral control over the pool of potential
arbitrators rendered the agreement unenforceable with respect to her Title VII
claims. The court agreed that the
agreement was unenforceable as to the arbitrator selection provision, but
remanded to the trial court for consideration of whether that provision was
severable from the remainder of the agreement.
***
Arbitration - Collective bargaining agreements ***
6th
- Arbitrator had authority to clarify ambiguous award.
Sterling
China v. Glass Workers Union (6th Cir 02/03/2004)
http://laws.findlaw.com/6th/04a0037p.html
The
arbitrator issued an award, and then issued a clarification of the award more
than two years later. The court found neither the Ohio three month time
limitation to modify an award nor the Ohio one year time limitation to confirm
an award applied to the union's request to clarify an award. The doctrine of
functus officio (having fulfilled the function, the arbitrator had no further
authority) did not apply where an award was susceptible to more than one
interpretation. The court affirmed the trial court in granting the union's
motion for summary judgment enforcing the arbitrator's supplemental award.
Fed
- Award vacated; Arbitrator substituted his own charge for the employer's.
James
v. Dale (Fed Cir 01/26/2004)
http://laws.findlaw.com/fed/033030.html
Dale
was discharged from his job as a border patrol agent, for "associating with
a known or suspected law violator." The
charge stemmed from his association with a woman who was charged (but never
convicted) of a felony narcotics charge. An arbitrator reversed Dale's dismissal, largely on the
ground that the woman was never convicted (the charge was eventually dismissed
pursuant to successful completion of a diversion program).
The court reversed, concluding that the arbitrator abused his discretion
by substituting his own charge for the employer's.
The court reasoned that the arbitrator erred in relying too heavily on
the fact that the woman was never convicted, and that the federal employer had
carried its burden of proving that the woman was a "suspected" law
violator. The court noted
that it was not required that the woman be convicted of a crime in order to be
"suspected" of committing a crime.
PA
- "Misspeaking" during Med-Arb was not enough to vacate award.
Local
85 Amalgamated Transit Union v. Port Authority (Pennsylvania Cmwlth 01/08/2004) The
union and employer entered into binding interest arbitration in an effort to
reach agreement on a new collective bargaining agreement. By agreement, the arbitrator engaged in mediation after the
hearing. After the award was entered, the union claimed that the arbitrator had
misled the union into believing he would accept a specific proposal, that the
union then made that proposal, and that the arbitrator rejected it. Although it
appeared that the arbitrator "misspoke" while he was mediating, the
court refused to vacate the award because there was no showing that the
arbitrator intended to deceive, engaged in collusion, or failed to provide a
fair hearing. Pennsylvania
State Police v. Pennsylvania State Troopers Assn (Pennsylvania Cmwlth
01/08/2004) The
public employer (Pennsylvania State Police) appealed from an Act 111 arbitration
award sustaining a union grievance and holding that the employer lacked just
cause to transfer a trooper. The
employer argued that the arbitrator exceeded his power and jurisdiction since
the transfer or removal of members from "specialized" positions is a
protected managerial prerogative and unrestricted by the parties' collective
bargaining agreement. The court
stated "[b]ecause these arguments do not assert grounds for reversal within
the confines of our restricted scope of review, we affirm." AFSCME
v. City of New Haven (Connecticut Ct App 01/17/2004) During
arbitration arising out of a discharge, the arbitration panel refused to
authorize a subpoena for the personnel records of other employees who allegedly
engaged in conduct similar to that of the discharged employee but who were not
discharged. On appeal, the court concluded that the arbitration panel did not
violate its statutory duties. Canavan
v. Civil Service Commn (Massachusetts Ct App 01/22/2004) The
employee arbitrated his discharge under the terms of the collective bargaining
agreement. The employee then appealed his discharge to the civil service
commission which dismissed the appeal. The court affirmed the commission. State
statute provided that the employee was required to elect to pursue either an
arbitration under the collective bargaining agreement or a hearing before the
civil service commission. Local
1287 AFSCME v. Wisconsin Empl Rel Commn (Wisconsin Ct App 01/21/2004) A
transferred union member reduced the seniority of three union members. The three
union members filed a grievance which resulted in a settlement requiring the
transferred union member's seniority be subjugated to the three union members'
seniority. The transferred union member filed a grievance which the union
declined to arbitrate. The Wisconsin Employment Commission determined that the
union acted in bad faith. The court reversed stating that bad faith required
evidence that the union acted with an improper motive and there was no evidence
of an improper motive. Ganton Technologies
v. United Autoworkers Union (7th Cir 02/12/2004) The employer did not raise the
issue of company ownership to the arbitrator in a hearing involving outsourcing
work within the company. The arbitrator decided in favor of the union that the
company had outsourced work in violation of the collective bargaining agreement.
The employer raised the issue of company ownership when the union sought to
enforce the arbitrator's award. The court held that the failure to pose the
issue before the arbitrator waived the issue in collateral proceedings to
enforce the arbitration award.
http://www.courts.state.pa.us/OpPosting/CWealth/out/858CD03_1-8-04.pdfPA
- Arbitrator did not exceed powers in overturning transfer.
http://www.courts.state.pa.us/OpPosting/CWealth/out/1815CD03_1-8-04.pdfCT
- Refusal to issue subpoena is approved.
http://www.jud.state.ct.us/external/supapp/Cases/AROap/AP81/81ap169.pdfMA
- Employee must elect between arbitration and appeal to civil service
commission.
http://www.socialaw.com/appslip/appJan04o.htmlWI
- Finding that union acted in bad faith was not supported by evidence of
improper motive.
http://www.courts.state.wi.us/html/ca/03/03-1102.htm7th - Employer waived argument of ownership of company in
arbitration hearing.
http://caselaw.lp.findlaw.com/data2/circs/7th/032952p.pdf
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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
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