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Arbitration Law Memo September 2005
by Ross Runkel at LawMemo
Arbitration Law Memo - September 2005
by LawMemo- First in Employment Law
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Arbitration - Individual Contracts ***
CO
- Arbitration agreement covered actions of management employees.
AL
- Health plan arbitration provision was not unconscionable.
1st
- Employer forfeited its arbitration argument by not filing an interlocutory
appeal.
8th
- Arbitration panel's interpretation of contract was reasonable.
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Arbitration - Collective Bargaining Agreements ***
7th
- Grievances under expired CBAs must be brought within a
"reasonable" time.
7th
- Employer wasn't subject to "withdrawal liability" under MPPAA.
***
Arbitration - Individual Contracts ***
CO
- Arbitration agreement covered actions of management employees.
Galbraith
v. Clark (Colorado Ct App 09/08/2005)
http://www.courts.state.co.us/coa/opinion/2005/2005q3/04CA1317.pdf
Galbraith
sued the employer's management employees individually for intentional
interference with contract, civil conspiracy, and outrageous conduct. The trial
court granted the employer's motion to compel arbitration. The Colorado Court of
Appeals affirmed. The court found that the parties agreed to have an arbitrator
decide issues of arbitrability. Without the parties' objection, the court
decided the scope of the arbitration provision. The court held that the
arbitration agreement covered management employees when they were acting as
managers of the employer.
AL
- Health plan arbitration provision was not unconscionable.
Blue
Cross Blue Shield v. Rigas (Alabama 09/09/2005)
(Link not available)
Rigas
was the beneficiary of a health care plan, enrolled as her father's dependent
under a plan administered by Blue Cross under an agreement between Blue Cross
and the father's employer. The plan contained a clause requiring arbitration of
disputed medical claims. When Rigas' disputed claim went to court, Blue Cross
moved to compel arbitration. The trial court refused to compel arbitration; the
Supreme Court of Alabama reversed. The court rejected Rigas' main argument,
which was that the agreement to arbitrate was unconscionable. There was no
"procedural unconscionability" because Rigas could not prove that
either she nor the employer lacked a meaningful choice in entering into their
respective contracts. There was no "substantive unconscionability"
because she would have to pay arbitration costs only if she "asked for
arbitration without a good reason." The court also said that the
arbitration could proceed even though the American Arbitration Association (AAA)
refuses to administer cases like this one.
1st
- Employee waived right to arbitrate.
Tyco
Intl v. Swartz (1st Cir 09/07/2005)
http://laws.findlaw.com/1st/041848.html
Swartz
and his employer entered into a severance agreement which contained an
arbitration clause. The employer submitted a demand for arbitration with the
American Arbitration Association (AAA) claiming damages for allegedly abusing
his position. The arbitration clause did not specify the arbitrator or the
governing rules, and Swartz refused to consent to using the AAA unless the
employer agreed to postpone any arbitration until a pending criminal proceeded
was finished. The employer eventually sued Swartz, and Swartz moved to compel
arbitration. The trial court denied the motion. The 1st Circuit affirmed on the
ground that Swartz waived his right to arbitrate because he did not propose an
arbitrator, insisted on indefinite postponement of arbitration, failed to appeal
from a denial of his motion, and failed to file a timely answer to the
employer's complaint.
1st
- Employer forfeited its arbitration argument by not filing an interlocutory
appeal.
Franceschi v. Hospital General San
Carlos (1st Cir 08/24/2005)
http://www.ca1.uscourts.gov/cgi-bin/getopn.pl?OPINION=04-2104.01A
Franceschi sued the employer for breach
of contract. The trial court denied
the employer's motion to dismiss the case pursuant to an arbitration clause in
Franceschi's employment agreement. The
case proceeded to a jury trial, and Franceschi prevailed.
The 1st Circuit affirmed. The employer did not pursue an interlocutory
appeal challenging the trial court's rejection of its arbitration argument.
The court held that "the [employer] forfeited its arbitration
argument by failing to pursue an interlocutory appeal when that argument was
first denied by the district court in a summary judgment ruling." Reasoning
that "it would prejudice plaintiffs 'to have a full trial and then
determine by a post-trial appeal that the whole matter should have been
arbitrated and so start again,'" the court concluded that the employer
forfeited its arbitration argument by not filing an interlocutory appeal.
8th - Arbitration panel's interpretation of contract was
reasonable.
McGrann v. First Albany Corp (8th Cir
09/14/2005)
http://caselaw.lp.findlaw.com/data2/circs/8th/043602p.pdf
McGrann sued the employer, seeking to
enforce an arbitration award rendered in his favor on his breach of contract
claim. The trial court confirmed
the arbitration award in its entirety. The
8th Circuit affirmed, concluding that the arbitration panel's interpretation of
McGrann's contract was reasonable.
AR - Teacher's claim was barred by res judicata.
Davis v. Little Rock School Dist
(Arkansas 08/31/2005)
http://courts.state.ar.us/opinions/2005b/20050831/ca04-987.html
Davis sued the public employer, alleging
that it violated Arkansas' Teacher Fair Dismissal Act when it discharged him.
The trial court granted summary judgment in favor of the employer.
The court affirmed. The
court agreed with the trial court's conclusion that Davis' claim was barred by
res judicata arising from a prior arbitration of his discharge. The previous
arbitration was pursuant to a post-discharge agreement to use arbitration in
lieu of the proceedings required by the Teacher
Fair Dismissal Act.
***
Arbitration - Collective Bargaining Agreements ***
7th
- Grievances under expired CBAs must be brought within a "reasonable"
time.
RJ
Corman Derailment v. Intl Union of Operating Engineers (7th Cir 09/02/2005)
http://caselaw.lp.findlaw.com/data2/circs/7th/042482p.pdf
The
employer filed suit under Section 301 of the Labor Management Relations Act (LMRA),
seeking declaratory and injunctive relief from the union's demand for
arbitration of wage grievances under an expired collective bargaining agreement
(CBA). After expiration of the CBA,
the union suspected that the employer had not complied with the wage provisions
of the CBA while it was still in effect. The
trial court granted summary judgment in favor of the employer, concluding that
the union's demand for arbitration (18 months after discovery of the relevant
facts) was untimely. The 7th
Circuit affirmed.
In
Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionary Workers Union,
430 US 243 (1977), the United States Supreme Court concluded that a party's
obligation to arbitrate under a CBA can survive expiration of that CBA.
The Nolde Court held that "where the dispute is over a provision of
[an] expired agreement, the presumptions favoring arbitrability must be negated
expressly or by clear implication." The
7th Circuit has declined, however, to "read the Nolde presumption of
arbitrability to persist indefinitely after expiration."
The 7th Circuit has observed, moreover, that "the presumption
weakens as the time between expiration and grievance events increases." Local 703, Int'l Bhd. of Teamsters v. Kennicott Bros. Co.,
771 F.2d 300 (7th Cir 1985). The
court concluded that, absent some evidence that one party has taken action to
abuse the grievance process, "a post-expiration grievance must be asserted
within a reasonable time after its discovery - within the time, as we put it in
Kennicott, when it is still logical to apply the Nolde presumption."
The court noted that "[o]ne factor that sheds some light on the time
period that is reasonable is the language of the CBA itself."
The court also noted that "there are powerful reasons to avoid a
rigid limitations period and to require only action within a reasonable
time." Applying that analysis,
the court concluded that the trial court hadn't erred in concluding that the
union's grievance was untimely.
11th
- Norris-Laguardia Act provisions clarified.
Triangle
Construction & Maintenance v. Our Virgin Island Labor Union (11th Cir
09/14/2005)
http://caselaw.lp.findlaw.com/data2/circs/11th/0413234p.pdf
The
employer filed suit, seeking an injunction to prevent arbitration of an unfair
labor practice charge that was dismissed by the National Labor Relations Board
(NLRB). The trial court granted the
injunction. The 11th Circuit
reversed.
1)
The Norris-LaGuardia Act sharply limits the power of trial courts to
issue injunctive relief in cases "involving or growing out of a labor
dispute." 29 USC Section 104
of that act sets forth a list of disputes covered by the Norris-LaGuardia Act.
The court held that the list set forth in Section 104 is not exhaustive,
agreeing with the 7th and DC Circuits.
2)
There are three established exceptions to the Norris-LaGuardia Act under
which courts may compel arbitration, enjoin strikes undertaken in violation of
an obligation to arbitrate, and enforce duties imposed by other labor statutes.
The court refused to recognize an additional exception, under which a
court could issue an anti-arbitration injunction. The court noted that every other circuit to consider the
issue has come to the same conclusion (1st, 3rd, 7th, 9th, and 10th Circuits).
7th - Compliance with grievance arbitration award wouldn't
necessarily cause employer to violate CBA.
Dexter Axle Co v. Intl Assoc of
Machinists (7th Cir 08/15/2005)
http://caselaw.lp.findlaw.com/data2/circs/7th/044206p.pdf
The employer brought an action seeking
to vacate a grievance arbitration award rendered in favor of the union. The trial court granted summary judgment in favor of the
union. The 7th Circuit affirmed,
rejecting the employer's arguments that the arbitrator exceeded his authority in
awarding lost wages and that compliance with the award would cause the employer
to violate its collective bargaining agreement with the union.
7th - Employer wasn't subject to
"withdrawal liability" under MPPAA.
Central States Pension v. Schilli Corp
(7th Cir 08/23/2005)
http://caselaw.lp.findlaw.com/data2/circs/7th/044217p.pdf
The multiemployer pension plan, governed
by the Employee Retirement Income Security Act (ERISA) and the Multiemployer
Pension Plan Amendments Act (MPPAA), filed suit under 29 USC Section 1401(b)(2).
The pension plan sought to vacate an arbitration award setting aside a
"withdrawal liability" assessment made by the plan against an
employer. The trial court affirmed
the arbitration award, and the 7th Circuit affirmed.
The court concluded that the employer had not partially withdrawn from
the plan, and was hence not subject to withdrawal liability.
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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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