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Arbitration Law Memo August 2005
by Ross Runkel at LawMemo
| Arbitration Law Memo - August 2005 by LawMemo - First in Employment Law |
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Arbitration - Individual Contracts ***
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Arbitration - Collective Bargaining Agreements ***
*** Arbitration - Individual Contracts *** 9th - Arbitration agreement was unconscionable, even after Luce Forward decision.Circuit City Stores v. Mantor (9th Cir
08/03/2005) In a previous decision in this case the 9th Circuit held that the employer could not enforce an arbitration agreement because it was unconscionable under California law. After the 9th Circuit decided EEOC v. Luce Forward, 345 F3d 742 (9th Cir 2003), the employer renewed its motion to compel arbitration, arguing that Luce Forward should change the outcome. The 9th Circuit did not agree, citing the similar case of Ingle v. Circuit City, 408 F3d 592 (9th Cir 2005). ID - Arbitration panel properly declined to award treble damages.Moore v. Omnicare (Idaho 07/22/2005) Moore prevailed at arbitration on his claim that he was discharged in contravention of the terms of his employment agreement. He was awarded about $250,000 in damages, but the arbitration panel declined to award treble damages or attorney fees. The trial court confirmed the award, and the court affirmed. The court opined that the damages awarded were in the nature of liquidated damages rather than unpaid wages, and that the treble damages usually allowable for unpaid wages (under Idaho's wage and hours statute) would have been inappropriate. 8th - Arbitration award didn't evidence "manifest disregard for law."St. John's Mercy Medical v. Delfino (8th
Cir 07/12/2005) Delfino and the employer arbitrated a dispute relating to the employer's failure to defend Delfino pursuant to a clause in Delfino's employment contract. The arbitrator rendered an award in Delfino's favor, and the employer petitioned the trial court seeking to vacate the award. The 8th Circuit confirmed the arbitrator's award in its entirety - based on its conclusion that the award didn't evidence "manifest disregard for law." IL - Arbitrator's assessment of attorney fees confirmed.Yorulmazoglu v. Lake Forest Hospital
(Illinois Ct App 08/05/2005) Three employees arbitrated their breach of contract claims against their employer. The arbitrator allowed some claims and disallowed others, and awarded attorney fees in favor of the employer. The court confirmed the award of attorney fees, having found no gross error. *** Arbitration - Collective Bargaining Agreements ***8th - Arbitrator's decision permitting employee's second medical opinion under FMLA was upheld.Electrolux
v. UAW (8th Cir 08/05/2005) The employer sued to vacate an arbitration award alleging the arbitrator's decision did not draw its essence from the collective bargaining agreement (CBA). The trial court denied the employer's request to vacate the arbitrator's award and granted enforcement of the award. The 8th Circuit Court affirmed. The court noted the CBA expressly incorporated the Family and Medical Leave Act (FMLA). The court found that the arbitrator's decision that it was permissible for an employee to submit a second medical opinion unsolicited by the employer was not such a grave misreading of the FMLA as to comprise a manifest disregard of the law. While the 7th circuit had similarly decided, the court stated it was only deciding that the arbitrator's decision was not a manifest disregard of the FMLA. The court found that the arbitrator's determination that the employee's absence was an FMLA occurrence showed at most an error of judgment which was not a basis for reversal. PA - Arbitrator's award deprived employer from discharging core functions.Southeastern
Pennsylvania Transportation Authority v. Transport Workers (Pennsylvania Cmwlth
Ct 08/11/2005) The trial court confirmed the decision of the arbitrator that there was not just cause for the discharge of an employee. The Pennsylvania Commonwealth Court reversed. The court noted that the arbitrator found that the employee failed to meet his responsibilities to ensure safety-sensitive repairs were made on buses before return to service. The court stated that this misconduct struck at the core function of the employer, which was to provide safe and reliable bus transportation. The court held that the arbitrator's award deprived the employer of its ability to discharge its essential function and was therefore not rational. CA - Defective arbitration demand did not waive arbitration.SEIU Local 715 v. Cupertino Union School
(California Ct App 08/03/2005) The union sued to compel the employer to arbitrate a grievance under their collective bargaining agreement. The trial court ruled that the union forfeited its arbitration rights; the California Court of Appeal reversed. The collective agreement provided that the union "may submit the grievance to arbitration" within 20 working days "by submitting a letter to the State Conciliation Service (SCS) . . . with a copy to the Superintendent." The union sent a letter to the employer demanding arbitration; the letter was timely but was not sent to SCS as the collective agreement contemplated. The court held that the union did not waive its right to arbitrate. The court cited the preference for arbitration and the general rule that forfeitures are not favored. This collective agreement did not "directly and specifically" condition the union's ability to arbitrate upon making a timely and procedurally proper demand. Construing the agreement so as to avoid a forfeiture, the court found that the union did not waive its right to arbitrate. NV - Public employee has no malpractice action against union-provided lawyer.Weiner
v. Beatty (Nevada 08/08/2005) Weiner sued attorney Beatty for legal malpractice. Weiner's public sector union hired Beatty to represent him in a grievance arbitration. Weiner lost the arbitration and claimed that Beatty engaged in misconduct. The Nevada Supreme Court held that a union member cannot bring a legal malpractice action against an attorney provided by his public sector union. By analogy to federal law derived from Labor Management Relations Act Section 301, the union member may bring a claim against the union for breach of the duty of fair representation (DFR), but no action against the attorney (the union's agent) individually. In a DFR suit the union is liable only if its representation is "arbitrary, discriminatory, or in bad faith," whereas in a legal malpractice suit an attorney can be liable for negligence. 2nd - Union did not breach duty of fair representation.Sanozky
v. Intl Assn of Machinists and Aerospace Workers (2nd Cir 07/20/2005) Sanozky sued the union for violation of the duty of fair representation under section 301 of the Labor Management Relations Act (LMRA) and the Railway Labor Act (RLA). The trial court granted the union's motion for summary judgment. The 2nd Circuit Court affirmed. The court noted that the employer filed bankruptcy, that Sanozky obtained other employment in the airline industry without disclosing his discharge by the employer, that Sanozky was able to pursue his remedy individually, and that the union was able to arbitrate only 24 cases involving alleged wrongful discharge under the terms of the bankruptcy disposition. The court found that under the circumstances of this case, the union's failure to pursue Sanozky's claim was not unreasonable. OH - Commission had jurisdiction over layoff issue.Dryden v. New Philadelphia Civil Service
Commn (Ohio Ct App 07/25/2005) Laid off employees were allowed to appeal to the city Civil Service Commission even though they were covered by a collective bargaining agreement that provided for binding arbitration. Their statutory claims provided for specific rights that were not included in the collective agreement. 8th - Employee's contract and DFR claims were a "minor dispute" subject to mandatory arbitration under the RLA.Smith v. American Airlines (8th Cir
07/18/2005) Smith sued her union and the employer, asserting claims under the federal Railway Labor Act (RLA). She claimed that the employer violated its collective bargaining agreement with the union, and that the union breached its duty of fair representation by not vigorously pursuing her grievance. The trial court granted summary judgment in favor of the employer and union. The 8th Circuit affirmed, agreeing with the trial court that the controversy was a "minor dispute" subject to mandatory arbitration under the RLA. |
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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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