« Arbitration Law Memo February 2004 | Main | Arbitration Law Memo May 2004 »
Arbitration Law Memo March 2004
by Ross Runkel at LawMemo
*** Arbitration - Individual contracts ***
-
5th - FAA Section 10 doesn't provide an independent basis for federal jurisdiction.
-
5th - Individually executed arbitration agreements are enforceable with respect to FLSA claims.
-
WA - Court establishes prima facie burden for employers seeking to compel arbitration under FAA.
*** Arbitration - Collective bargaining agreements ***
-
3rd - Arbitrator's determination of substantive arbitrability upheld (2-1).
-
7th - Employer's argument on ownership of company was waived.
-
8th - Arbitrator decides whether one party failed to follow procedural steps.
-
CT - Employee must submit to fitness for duty examination before returning to work.
-
WI - Parties' conduct considered in determining whether grievance was settled.
***
Arbitrator Decision ***
Arb - Police officer's discharge for altercation with citizen was for just cause.
City of Tampa and
West Central Florida Police Benev Assoc (O'Connor, Arb., 2003)
http://www.lawmemo.com/arb/award/2003/115.htm
A police office with six years of service was discharged following an altercation with a citizen. The officer was driving a paddy wagon, and his entry into a parking lot was blocked by a citizen's car. The citizen was the wife or girl friend of a prisoner the officer was sent to pick up, but the citizen was not a suspect or involved in the prisoner's alleged offense. The officer honked his horn two or three times, yelled at the citizen in a loud and angry voice, got out and poked her in the chest with his finger, threatened to take her to jail, and began to handcuff her.
At the arbitration hearing the Union objected to the introduction of evidence of prior incidents that manifested an anger management problem. The arbitrator held that the Union was estopped from objecting because the grievance had recited that this sort of behavior was not standard behavior for the officer. The evidence was admitted for the purpose of assessing the appropriate penalty. The arbitrator ruled that the officer's conduct was "outrageous" and that the discharge was for just cause.
***
Arbitration - Individual contracts ***
5th - FAA Section 10 doesn't provide an independent basis for federal jurisdiction.
Smith
v. Rush Retail Centers (5th Cir 03/03/2004)
http://caselaw.lp.findlaw.com/data2/circs/5th/0350897p.pdf
Smith filed suit in federal court seeking to vacate an arbitration award entered in favor of the employer. The trial court dismissed the case for lack of subject matter jurisdiction. The 5th Circuit affirmed.
Section 10 of the Federal Arbitration Act (FAA) provides that "the United States court in and for the district wherein the [arbitration] award was made may make an order vacating the award upon the application of any party to the arbitration .... " Smith argued that Section 10 provides an independent basis for federal jurisdiction. The court disagreed. The court joined the 2nd, 6th, 7th, 9th, 11th, and DC Circuits, which have all held that Section 10 does not confer federal jurisdiction, and that there must be an independent basis for federal jurisdiction (such as diversity of citizenship or allegation of a federal question) before a federal district court may entertain a petition to vacate an arbitration award. Since no such independent basis for jurisdiction existed in Smith's case, the court affirmed dismissal of his case.
5th - Individually executed arbitration agreements are enforceable with respect to FLSA claims.
Carter
v. Countrywide Credit Industries (5th Cir 03/05/2004)
http://caselaw.lp.findlaw.com/data2/circs/5th/0310484p.pdf
Employees
sued the employer seeking unpaid overtime under the Fair Labor Standards Act (FLSA).
The trial court granted the employer's motion to compel arbitration.
The 5th Circuit affirmed. The
court found that FLSA claims are subject to arbitration.
The court noted that, under Gilmer v. Interstate/Johnson Lane Corp., 500
US 20 (1991), "a court is required to enforce a party's commitment to
arbitrate his federal statutory claims unless he can show that Congress intended
to preclude arbitration or any other nonjudicial resolution of those
claims." The court found that
the employees had failed to make such a showing, and that there is "nothing
in the FLSA text or legislative history" supporting the proposition that
Congress had intended to preclude arbitration of FLSA claims.
IN - Employer's shareholders could insist on arbitration.
Polinsky
v. Violi (Indiana Ct App 02/19/2004)
http://www.in.gov/judiciary/opinions/archive/02180402.jgb.html
The
employee sued the employer and the employer's shareholders for breach of
contract and breach of fiduciary duty. The trial court denied the employer's
shareholders' motion to compel arbitration. The Indiana Court of Appeals
reversed. The employment agreement between the employee and the employer
provided for arbitration of disputes. The court found that the shareholders,
owners of 72% of the shares, were in privity with the employer and that artful
pleading did not circumvent the right to arbitrate against a closely-held
employer. Therefore, the shareholders could insist on arbitration.
WA - Court establishes prima facie burden for employers seeking to compel arbitration under FAA.
Walters
v. A.A.A. Waterproofing (Washington Ct App 03/01/2004)
http://www.courts.wa.gov/opinions/?fa=opinions.opindisp&docid=522949MAJ
Walters sued the employer asserting a state law overtime claim. The trial court granted the employer's motion to compel arbitration pursuant to the Federal Arbitration Act (FAA), based on an arbitration agreement between Walters and the employer. The Washington Court of Appeals affirmed. On an issue of particular significance, the court found that the employer had a prima facie burden of showing 1) the existence of a written arbitration agreement; and 2) that the contract at issue involved interstate commerce. In this case, the terms of the contract evidenced an undertaking involving interstate commerce in that it required Walters to participate in expanding the employer's business into new geographic markets in the Northwestern United States.
NY - Personal service agreement's arbitration clause was not superseded by collective bargaining agreement's arbitration clause.
DiBello
v. Salkowitz (New York App Div 02/24/2004)
http://www.courts.state.ny.us/reporter/3dseries/2004/2004_01209.htm
DiBello
sued claiming tortious interference, defamation, and racial discrimination. The
personal service agreement (PSA) provided that the CBA's process for arbitration
would be followed rather than the American Arbitration Association's rules.
DiBello argued that he should not be compelled to arbitrate under the PSA. The
court held that the PSA did not provide for displacement of its arbitration
clause by the collective bargaining agreement (CBA). The PSA merely adopted the
CBA's procedures. Therefore, DiBello was compelled to arbitrate.
***
Arbitration - Collective bargaining agreements ***
3rd - Arbitrator's determination of substantive arbitrability upheld (2-1).
The Major League Umpires Assn v.
The American League of Professional Baseball Clubs (3rd Cir 02/17/2004)
http://caselaw.lp.findlaw.com/data2/circs/3rd/021103p.pdf
The employer conceded that the
issue of substantive arbitrability was submitted to the arbitrator. The court
found that the arbitrator's decision on arbitrability drew its essence from the
collective bargaining agreement and, thus, affirmed the trial court's
confirmation of the award. The DISSENT argued the dispute was never arbitrable.
7th - Employer's argument on ownership of company was waived.
Ganton Technologies
v. Automobile Workers Union (7th Cir 02/12/2004)
http://caselaw.lp.findlaw.com/data2/circs/7th/032952p.pdf
The arbitrator decided in favor
of the union that the company had outsourced work in violation of the collective
bargaining agreement. The employer sued to vacate the award, arguing that the
arbitrator disregarded the definition of "Company" contained in the
collective agreement. The court held that the failure to pose the issue before
the arbitrator waived the issue in collateral proceedings to enforce the
arbitration award.
8th - Arbitrator decides whether one party failed to follow procedural steps.
Intl Assn of Ironworkers v. EFCO
Corp (8th Cir 03/01/2004)
http://caselaw.lp.findlaw.com/data2/circs/8th/031583p.pdf
The union filed suit under the
Labor Management Relations Act (LMRA) to compel arbitration of a grievance.
The employer claimed that the matter was not arbitrable because the
union's arbitration demand was not in writing and was untimely. The trial court
granted summary judgment in favor of the employer.
The 8th Circuit reversed. The
trial court based its grant of summary judgment on its conclusion that the issue
of arbitrability underlying the case was an issue of substantive arbitrability.
The court disagreed, stating "a party's failure to comply with the
procedural prerequisites for arbitration is a matter of procedural, and not
substantive, arbitrability .... " Therefore, the issue was for the
arbitrator to decide.
CT - Employee must submit to fitness for duty examination before returning to work.
Intl Brotherhood of Police
Officers v. Town of New Milford (Connecticut Ct App 03/02/2004)
http://www.jud.state.ct.us/external/supapp/Cases/AROap/AP81/81ap194.pdf
The arbitration panel denied the
grievance on the ground that the employer had just cause to suspend the employee
indefinitely. The employee had been on paid medical leave for depression. The
employee did not provide medical records and did not submit to a medical
examination. The court upheld the arbitration award noting that the panel did
not justify the indefinite suspension on the basis of the requirement of further
treatment, but on the basis that the employee either submit to a fitness for
duty examination or permit the employer's physician to review relevant medical
records.
WI - Parties' conduct considered in determining whether grievance was settled.
Madison Teachers Inc. v. Madison
Metropolitan School District (Wisconsin Ct App 02/26/2004)
http://www.courts.state.wi.us/html/ca/03/03-0443.htm
The issue before the arbitrator
was whether a memorandum of understanding (MOU) settled a grievance. The
arbitrator held that the MOU settled the grievance and he was without
jurisdiction to address the grievance further. The trial court vacated the award
on the ground that the arbitrator misconstrued the facts, which resulted in
misapplication of the law. The Wisconsin Court of Appeals reversed. The court
concluded that the arbitrator could consider the parties' conduct in deciding
whether the grievance had been settled, and that the arbitrator's findings were
supported by the evidence.
|
|
|
Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
|
