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Arbitration Law Memo January 2007
by Ross Runkel at LawMemo
Arbitration Law Memo January 2007
by LawMemo - World's Best
Also available by free monthly email.
*** Arbitration - Individual Contracts ***
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CA - Class action waiver wasn't substantively unconscionable.
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TX - Appellate court has jurisdiction to review denial of confirmation of award.
*** Arbitration - Collective Bargaining Agreements ***
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PA - Interest arbitrators acted illegally and exceeded authority (2-1).
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NJ - Court confirms award that applied continuing violation doctrine (5-1).
*** Arbitration - Individual Contracts ***
CA - Class action waiver wasn't substantively unconscionable.
Konig
v. U-Haul (California Ct App 12/19/2006)
http://caselaw.lp.findlaw.com/data2/californiastatecases/b190547.pdf
Konig sued the employer in a class action, asserting various claims under the California Labor Code and the California Business and Professions Code. The trial court granted the employer's motion to compel arbitration and dismiss the claim action claims. The court affirmed, concluding that Konig failed to establish that the class action waiver in the employer's arbitration agreement was substantively unconscionable because he failed to prove this action involves “predictably ... small amount of damages” per class member as is his burden under Discover Bank v. Superior Court 36 Cal.4th 148 (2005).
TX - Appellate court has jurisdiction to review denial of confirmation of award.
Werline v. East Texas Salt Water
Disposal (Texas Ct App 12/18/2006)
http://www.6thcoa.courts.state.tx.us/opinions/htmlopinion.asp?OpinionId=8539
Werline appealed the trial court's denial of his application to confirm an arbitration award rendered in his favor. The employer argued on appeal that the court lacked jurisdiction to hear the appeal, because in addition to denying Werline's application to confirm the award, the trial court vacated the award and directed a rehearing. The court rejected that argument.
Section (a)(3) of the Texas Arbitration Act (TAA) provides that "[a] party may appeal a judgment or decree entered under this chapter or an order … confirming or denying confirmation of an award." In Prudential Secs., Inc. v. Vondergoltz, 14 S.W. 3d 329 (Tex Ct App 2000), a Texas appellate court held that it lacked jurisdiction over an appeal of a denial of an application to confirm an arbitration award because the trial court ordered a rehearing. The court disagreed with Vondergoltz, stating "[t]he plain language of the statute should control." The court opined that the Vondergoltz decision in essence rewrote the statute, and concluded that it had jurisdiction to hear the appeal.
*** Arbitration - Collective Bargaining Agreements ***
PA - Interest arbitrators acted illegally and exceeded authority (2-1).
Schuylkill Haven Borough v.
Schuylkill Haven Police Officers Assn (Pennsylvania Cmwlth 12/22/2006)
http://www.courts.state.pa.us/OpPosting/CWealth/out/2489CD05_12-22-06.pdf
The union appealed the trial court's order vacating an "Act 111" interest arbitration award. The Pennsylvania Commonwealth Court affirmed in part and reversed in part. The court agreed that the Board of Arbitrators acted illegally by requiring the employer to match employees' contributions to a deferred compensation plan where the employer had no legal authority to match contributions. Because the number of police officers was a management prerogative, the court concluded the no lay off portion of the award was properly vacated. The court reversed that portion of the trial court's order with respect to limiting the maximum employee contribution to the pension fund to 5% of wages because the subject was bargainable and not illegal. The DISSENT argued that refund of contributions under the prior collective bargaining agreement was illegal.
NJ - Court confirms award that applied continuing violation doctrine (5-1).
Bd
of Educ v. Alpha Educ Assn (New Jersey 12/21/2006)
http://www.judiciary.state.nj.us/opinions/supreme/A-79-05.pdf
The trial court confirmed the arbitrator's award requiring the employer to provide health insurance coverage to less than full-time employees working twenty hours or more. The Appellate Division reversed, and the New Jersey Supreme Court reversed the Appellate Division. The issue was whether the arbitrator exceeded his authority in applying the continuing violation doctrine where the union waited two years before filing a grievance. The court was convinced that the continuing violation doctrine that had been approved by the New Jersey Appellate Division and in the federal courts was a viable doctrine to be applied by an arbitrator when appropriate. Because the arbitrator made a reasonably debatable procedural decision, the court concluded it was obligated to accept the arbitrator's award. The DISSENT argued that the continuing violation doctrine applied only in employment discrimination cases.
MD - Award requiring promotions based on rank alone upheld.
Prince George's County v. Fraternal
Order of Police (Maryland Ct App 01/04/2007)
http://www.courts.state.md.us/opinions/cosa/2007/2660s05.pdf
The trial court affirmed the arbitrator's decision ordering promotions on the basis of rank alone. The Maryland Court of Special Appeals affirmed. Because the language of the arbitration clause clearly mandated arbitration for disputes arising from the interpretation of the collective bargaining agreement (CBA) and the dispute regarding promotions arose from conflicting interpretations of the CBA, the court concluded that the arbitrator had jurisdiction to arbitrate the dispute. The court found nothing apparent on the face of the award to support the contention that the award involved a mistake so gross as to work a manifest injustice and contained a palpable mistake of law or fact, nor to support a conclusion that the arbitrator's decision was completely irrational.
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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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