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Arbitration Law Memo April 2006
by Ross Runkel at LawMemo
Arbitration Law Memo - April 2006
by LawMemo - World's Best
Also available by free monthly email.
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Arbitration - Individual Contracts ***
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2nd - Arbitrator to decide whether Sarbanes-Oxley whistleblower claim is to be arbitrated.
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1st - Some clauses prevented plaintiffs from vindicating their statutory rights.
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Arbitration - Collective Bargaining Agreements ***
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NH - Union cannot assign right to get judicial review of arbitration award.
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NV - Common law grounds for vacating arbitration awards clarified.
*** Arbitration - Individual Contracts ***
2nd - Arbitrator to decide whether Sarbanes-Oxley whistleblower claim is to be arbitrated.
Alliance Bernstein Investment v.
Schaffran (2nd Cir 04/12/2006)
http://www.lawmemo.com/docs/2/alliance.pdf
Schaffran and his employer had agreed to arbitrate certain disputes under the National Association of Securities Dealers (NASD) rules. Schaffran claimed he was discharged in violation of the Sarbanes-Oxley Act's whistleblower provision. The employer claimed Schaffran quit his job. Schaffran commenced arbitration proceedings by filing a claim with NASD; the employer requested that he withdraw his arbitration claim and proceed in court; and Schaffran refused. Schaffran then sued to compel the employer to arbitrate.
Schaffran's position was that NASD rules required employment disputes to be arbitrated. The employer's position was that this case fit an exception for "employment discrimination" cases, which could be arbitrated only if both parties agreed. The issue for the court was whether the question of arbitrability was to be decided by the court or by an arbitrator. The court held that it was for the arbitrator to decide the question of arbitrability because the NASD rules provide that the arbitrator shall "interpret and determine the applicability of all provisions" of the NASD rules, including, in this case, whether the claim was subject to arbitration.
1st - Some clauses prevented plaintiffs from vindicating their statutory rights.
Kristian v. Comcast Corp (1st Cir
04/20/2006)
http://laws.findlaw.com/1st/042619.html
This case did not involve employment, yet could have an impact on employment cases.
Cable TV customers sued the cable provider alleging federal and state antitrust claims. The court enforced arbitration agreements after holding that some of the provisions in the agreement could not be enforced. Five clauses were at issue. The court severed three clauses, as a matter of federal law, on the ground that they would not permit the plaintiffs to vindicate their statutory rights.
(1) A clause prohibiting class-action and consolidated arbitration was severed. (2) A clause imposing a contractual one-year limitation period was left for the arbitrator to decide. (3) A clause prohibiting treble damages was severed as to the federal antitrust claims, and allowed as to the state antitrust claims. (4) A clause making plaintiffs responsible for their own costs and attorney fees was severed. (5) A clause limiting discovery was allowed.
*** Arbitration - Collective Bargaining Agreements ***
NH - Union cannot assign right to get judicial review of arbitration award.
Dillman v. Town of Hooksett (New
Hampshire 04/07/2006)
http://www.courts.state.nh.us/supreme/opinions/2006/dillm027.pdf
The employer discharged Dillman. His
union took the matter to arbitration and lost. The union then assigned to
Dillman the right to seek judicial review of the arbitration award. The court
held that this right was non-assignable both as a matter of public policy and by
applying the Restatement of Contracts rules on assignability of rights.
NV - Common law grounds for vacating arbitration awards clarified.
Clark County
Education Assn v. Clark County School (Nevada 03/30/2006)
http://www.leg.state.nv.us/scd/122NevAdvOpNo30.pdf
The union appealed a grievance arbitration award rendered in the public employer's favor. The grievance involved the discharge of a public school teacher. The trial court affirmed the award. The court affirmed, taking the opportunity to "clarify the common-law grounds available for a court to review a private arbitration award." The court had previously recognized that an arbitration award may be vacated under two grounds: 1) where the award is "arbitrary, capricious, or unsupported by the arbitration agreement;" or 2) where "the arbitrator manifestly disregarded the law." The court stated that "[u]nder the first ground, we clarify that the reviewing court may only concern itself with the arbitrator's findings and whether they are supported by substantial evidence or whether the subject matter of the arbitration is within the arbitration agreement." The court stated additionally that "[u]nder the second ground, we conclude that the reviewing court may only concern itself with whether the arbitrator knew of the law and, if so, consciously disregarded it, not whether the ... arbitrator's interpretation of the law was correct."
OH - Arbitrator's conclusion that appointments made by employer didn't violate CBA "drew its essence from the contract."
Fraternal Order of Police v. Columbus
(Ohio Ct App 03/30/2006)
http://www.sconet.state.oh.us/rod/newpdf/10/2006/2006-ohio-1520.pdf
The police officer's union moved to vacate a grievance arbitration award rendered in favor of the employer. The trial court denied the motion and confirmed the award. The court affirmed. The arbitrator determined that certain "limited appointments" made by the employer did not violate the parties' collective bargaining agreement. The court concluded that this determination "draws its essence from the contract."
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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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