« Arbitration Law Memo July 2006 | Main | Arbitration Law Memo September 2006 »
Arbitration Law Memo August 2006
by Ross Runkel at LawMemo
Arbitration Law Memo August 2006
by LawMemo - World's Best
Also available by free monthly email.
***
Arbitration - Individual Contracts ***
***
Arbitration - Collective Bargaining Agreements ***
-
WA - Personnel Board wasn't performing a judicial function when it conducted arbitration.
-
PA - Arbitrator's decision regarding mootness wasn't subject to judicial review.
*** Arbitration - Individual Contracts ***
NJ - Anti-class-action clause may or may not be unconscionable.
Muhammad v. County Bank of Rehoboth
Beach (New Jersey 08/09/2006)
http://www.judiciary.state.nj.us/opinions/supreme/a-39-05.pdf
Delta Funding Corp v. Harris (New Jersey 08/09/2006)
http://www.judiciary.state.nj.us/opinions/supreme/a-44-05.pdf
The New Jersey Supreme Court decided two cases (not employment cases)
on the issue of whether it is unconscionable for a consumer contract to include an arbitration provision that prohibits class-action arbitration. The cases reached opposite conclusions.
(1) The Muhammad case involved a payday loan agreement; a consumer brought a fraud claim that involved a small amount of money. The court found that because the case involved a small amount of money, individual enforcement of the plaintiff's claim would be difficult if not impossible. A bar on class-arbitration would preclude any realistic challenge to the statutory loan agreement. Therefore, the anti-class-action clause was unconscionable. The court severed the unconscionable provision from the contract, and then enforced the agreement to arbitrate.
(2) The Delta Funding case involved a mortgage loan, and the court said an anti-class-action clause would be permissible because the case involved a substantial amount of damages and that would give the plaintiff enough incentive to bring the claim as an individual action.
NJ - Consumer cannot be required to pay for arbitration.
Delta Funding Corp v. Harris (New Jersey
08/09/2006)
http://www.judiciary.state.nj.us/opinions/supreme/a-44-05.pdf
A consumer mortgage loan contract had an arbitration clause that included some provisions that the New Jersey Supreme Court found ambiguous. The court said that it is the role of the arbitrator - not the courts - to interpret these ambiguous provisions. However, the court said that certain provisions would be unconscionable if interpreted by the arbitrator to (a) require the consumer to pay the costs of arbitration, (b) strip the arbitrator of power to award attorney fees and costs to the prevailing party, or (c) require that a consumer who appeals from the arbitration must bear the costs of the appeal "regardless of the outcome of the appeal." If these provisions were interpreted by the arbitrator in a manner that would render them unconscionable, then they can be severed and the remainder of the agreement can be enforced.
2nd - Continued
employment created a presumption that employee's contract (including arbitration
clause) was renewed.
George v. Lebeau (2nd Cir 07/10/2006)
http://caselaw.lp.findlaw.com/data2/circs/2nd/054241p.pdf
The employer appealed from the trial court’s order denying its motion to stay arbitration. The 2nd Circuit affirmed. Lebeau’s employment contract (which contained an arbitration clause) expired prior to the date of her termination. The trial court determined that Lebeau’s continued employment created a presumption that her initial contract, including its arbitration clause, was renewed from year to year. Applying New York law, the court agreed.
*** Arbitration - Collective Bargaining Agreements ***
WA - Personnel Board wasn't performing a judicial function when it conducted arbitration.
Jones v. Personnel Resources Bd
(Washington Ct App 08/08/2006)
http://www.courts.wa.gov/opinions/?fa=opinions.opindisp&docid=335832MAJ
Jones (a state employee covered by a collective bargaining agreement) appealed from the denial of her petition for writ of certiorari. The writ would have allowed Jones to appeal an unfavorable Personnel Resources Board (PRB) grievance arbitration decision. The trial court determined that the PRB does not exercise a judicial function when it conducts arbitrations such as these, and that a statutory writ of certiorari was thus not available. The court affirmed, concluding that the PRB was performing an administrative (rather than judicial) function.
PA - Arbitrator's award rationally derived from CBA.
Scranton v. EB Jermyn Lodge
(Pennsylvania Cmwlth 07/20/2006)
http://www.courts.state.pa.us/OpPosting/CWealth/out/1442CD05_7-20-06.pdf
The arbitrator's award granted additional pay to the union members. The trial court denied the employer's petition to vacate. The Pennsylvania Commonwealth Court affirmed. The court noted that review of an Act 111 arbitration award must be conducted under the narrow certiorari scope of review, and that the Pennsylvania Supreme Court rejected the use of the essence test as inconsistent with this scope of review. The court concluded the arbitrator's award was rationally derived from the collective bargaining agreement (CBA).
NJ - Arbitrator reasonably interpreted CBA.
New Jersey Transit Bus Operations v.
Amalgamated Transit Union (New Jersey 07/18/2006)
http://www.judiciary.state.nj.us/opinions/supreme/A-82-05.pdf
The public employees' union appealed a decision by the appellate court below vacating grievance arbitration awards (concerning payment to part-time bus drivers) rendered in the union's favor. The court reversed, reasoning "[w]e find that the arbitrator gave the contract's various sections a reasonable interpretation and that in doing so he did not exceed the limits of his authority."
PA - Arbitrator's decision regarding mootness wasn't subject to judicial review.
Town of McCandless v. McCandless Police
Officers Assn (Pennsylvania 07/18/2006)
Majority: http://www.courts.state.pa.us/OpPosting/Supreme/out/J-90-2005mo.pdf
Concurring: http://www.courts.state.pa.us/OpPosting/Supreme/out/J-90-2005co.pdf
In this grievance arbitration appeal (arising from the discharge of a municipal police officer), the court considered whether a pending grievance filed in opposition to an Act 111 (which applies to police and fire personnel) employee's discharge is rendered moot where the employee failed to grieve a separate set of charges supporting his discharge. During grievance arbitration, the arbitrator rejected the employer's mootness argument. The court held that "in light of our narrow certiorari scope of review, the arbitrator's decision on mootness is not subject to judicial review."
11th - Railway arbitration award upheld.
Brotherhood v. CSX Transportation
(11th Cir 07/14/2006)
http://caselaw.lp.findlaw.com/data2/circs/11th/0514959p.pdf
The arbitration by the National Railway Adjustment Board resulted in an award resolving seniority claims of three pools of applicants seeking selection to engine crews of the employer. The trial court vacated the award. The 11th Circuit reversed. The court stated that the trial court's recitation of the proper standard of review did not transform its substantive disagreement with the arbitrator into a sustainable decision. Noting that it was apparent that no solution to the seniority dispute could have satisfied both unions, the court found that arbitration law wisely relied upon the experience, perspective, understanding of industrial practice, and knowledge of logistics and economics, of the officer chosen as arbitrator. Because the parties contracted to have disputes settled by arbitration rather than a judge; under the present circumstances, the court concluded the arbitrator's award was within the statutory scope of the arbitration and within the Board's jurisdiction.
|
|
|
Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
|
