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Arbitration Law Memo March 2007
by Ross Runkel at LawMemo
Arbitration Law Memo March 2007
by LawMemo - World's Best
Also available by free monthly email.
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Arbitration - Individual Contracts ***
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Arbitration - Collective Bargaining Agreements ***
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CT - Record of properly considered evidence was sufficient for arbitrator's award.
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IA – Award affirmed; derived from the collective bargaining agreement.
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5th – Individual employees lacked standing to attack grievance award.
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Fed - Reasonable cause not required for indefinite suspension (2-1).
*** Arbitration - Individual Contracts ***
8th - Employee intervenor in EEOC enforcement action compelled to arbitrate individual discrimination claims.
EEOC
v. Woodmen of the World life Ins (8th Cir 03/09/2007)
http://caselaw.lp.findlaw.com/data2/circs/8th/061522p.pdf
The Equal Employment Opportunity Commission (EEOC) sued the employer for violation of Title VII, and employee Rollins intervened. The trial court denied the employer's motion to compel Rollins to arbitrate. The 8th Circuit reversed.
The issue on appeal was whether the trial court properly excused Rollins from arbitrating her individual discrimination claims and allowed her to proceed in the EEOC's enforcement action as an intervenor. The court concluded, where Nebraska state law determined that adhesion contracts were not automatically unconscionable or void, that this arbitration agreement was not unconscionable where the employer agreed to waive the fee-splitting provision and pay the arbitrator's fees in full. The court held the arbitration agreement was valid. The court noted that the EEOC was able to continue its enforcement action. Considering the Title VII enforcement regime as well as case law, the court concluded neither Title VII nor case law precluded Rollins from arbitrating her dispute with the employer, and that the Federal Arbitration Act (FAA) compelled her to arbitrate the dispute.
5th – EEOC barred from seeking make-whole relief, under the doctrine of res judicata and Waffle House.
EEOC v Jefferson Dental Clinics (5th Cir 02/12/2007)
http://www.ca5.uscourts.gov/opinions/pub/06/06-10090-CV0.wpd.pdf
Four employees filed discrimination charges with the Equal Employment Opportunity Commission (EEOC). They also filed suit in Texas state court, asserting state common law claims. Meanwhile, the EEOC filed suit against the employer in federal court based on the employees’ discrimination charges. The employer prevailed in the state suit, and then moved for summary judgment in the federal suit on the basis of res judicata. The trial court denied the motion, but then stayed the proceedings pending interlocutory appeal. The 5th Circuit affirmed in part and reversed in part.
In EEOC v. Waffle House, 534 US 279 (2002) the United States Supreme Court held that the EEOC was not bound by an arbitration agreement signed by the employee/charging party and the employer. The Waffle House Court noted, however, that “[i]t is an open question whether a settlement or arbitration judgment would affect the validity of the EEOC’s claim or the character of the relief the EEOC may seek. The only issue before this Court is whether the fact that [the individual] has signed a mandatory arbitration agreement limits the remedies available to the EEOC.” The Waffle House Court also noted that if an employee had accepted a monetary settlement, “any recovery by the EEOC would be limited accordingly.” Similarly, the Court stated “it goes without saying that the courts can and should preclude double recovery by an individual.”
The employer argued that under Waffle House, once the charging parties have had an opportunity to litigate their case, the EEOC’s ability to recover should be “limited accordingly” via a bar to a second action under the doctrine of res judicata. The court declined to read Waffle House so broadly, stating “[t]he Waffle House majority would likely have permitted the EEOC to bring a claim for injunctive relief, had this issue been before the Court.” The court concluded, “[g]iven the divergence of interests between the charging parties and the EEOC when it seeks injunctive relief, this court will permit the injunctive relief claims by the EEOC.” The court also determined, however, “[i]n the context of make-whole relief … the interests of the EEOC stack up poorly against the principle of res judicata.” Noting the Waffle House Court’s observation regarding double recovery, and observing “[t]he EEOC’s public interest does not justify giving the plaintiffs two chances to receive make-whole relief[,]” the court precluded that form of relief (finding the EEOC interests “not sufficiently independent to avoid being in privity with the charging parties” under Texas law).
KS - Arbitration agreement did not cover post-discharge claim of tortious interference.
Anderson v. Dillard's (Kansas
03/16/2007)
http://www.kscourts.org/kscases/supct/2007/20070316/94334.htm
After Dillard's discharged Anderson, he sued claiming tortious interference with contractual relations, alleging that Dillard's told his two other employers he had been arrested for shoplifting. The Anderson-Dillard's arbitration agreement covered disputes "resulting from termination of employment." The Kansas Supreme Court concluded Anderson had not agreed to arbitrate this dispute because it was based on events that occurred after his discharge and did not result from termination of his employment.
*** Arbitration - Collective Bargaining Agreements ***
4th - National Railroad Adjustment Board had jurisdiction to resolve dispute between railroad carrier and union.
CSX
v. Transportation Communications Intl Union (4th Cir 03/28/2007)
http://caselaw.lp.findlaw.com/data2/circs/4th/061414p.pdf
The employer (a railroad carrier) sued the union, seeking to vacate several arbitration awards issued in the union’s favor by the National Railroad Adjustment Board (NRAB). The trial court granted summary judgment in favor of the union. The 4th Circuit affirmed, rejecting the employer’s argument that the Surface Transportation Board (STB) had exclusive jurisdiction over the matter. The court stated, “we hold that because the disputed NRAB decisions drew their essence from the interpretation and enforcement of the collective bargaining agreement between the parties, rather than from the Implementing Agreement, the NRAB had jurisdiction to resolve the claims.”
PA – Arbitrator had authority to decide whether CBA applied to employees added after date CBA was executed.
Indiana School District v Indiana
Educ Assn (Pennsylvania Cmwlth 02/20/2007)
http://www.courts.state.pa.us/OpPosting/CWealth/out/2222CD05_2-20-07.pdf
The public school employees’ union appealed from the trial court’s order vacating a grievance arbitration award rendered in the union’s favor. The court reversed, concluding that 1) the arbitrator had authority to decide whether the parties’ collective bargaining agreement (CBA) applied to employees added to the bargaining unit pursuant to an order by the Pennsylvania Labor Relations Board (PLRB), where those employees were added after the CBA was executed; and 2) the trial court exceeded its limited scope of review.
CT - Record of properly considered evidence was sufficient for arbitrator's award.
Krassner v. City of Ansonia
(Connecticut Ct App 03/27/2007)
http://www.jud.state.ct.us/external/supapp/Cases/AROap/AP100/100AP202.pdf
The arbitrator concluded the employer had just cause to discharge Krassner. The trial court vacated the award. The Connecticut Appellate Court reversed. The court found that the admission of unsworn written statements by the arbitrator violated Section 31-91-39(a) of the Regulations of Connecticut State Agencies. The court concluded that the record of properly considered evidence was nevertheless sufficient to support the award.
IA – Award affirmed; derived from the collective bargaining agreement.
AFSCME Iowa Council v. Dept of
Personnel (Iowa Ct App 03/14/2007)
http://www.lawmemo.com/docs/ia/afscme.pdf
The state employees’ union petitioned the trial court to vacate a grievance arbitration award rendered in favor of the employer. The trial court denied the petition. The court affirmed, concluding that the arbitrator’s decision “can in some rational manner be derived from the [collective bargaining] agreement, ‘viewed in the light of its language, its context, and any other indicia of the parties intention …. ’“
5th – Individual employees lacked standing to attack grievance award.
Mitchell v. Continental Airlines
(5th Cir 03/07/2007)
http://caselaw.lp.findlaw.com/data2/circs/5th/0520791cv0p.pdf
Airline employees petitioned the trial court, seeking to vacate a grievance arbitration award under the Railway Labor Act (RLA). The trial court granted summary judgment, concluding that one of the employees failed to exhaust her administrative remedies under the parties’ collective bargaining agreement (CBA) and the others lacked standing under the RLA to bring the petition. The 5th Circuit affirmed. The court stated, “we conclude that, when a CBA formed pursuant to the RLA establishes a mandatory, binding grievance procedure and vests the union with the exclusive right to pursue claims on behalf of aggrieved employees, an aggrieved employee whose employment is governed by the CBA lacks standing to attack the results of the grievance process in court …. “ The court noted that “the sole exception … [is the ability] of an aggrieved employee to
bring an unfair representation claim.”
5th – CBA was ambiguous on the issue of subcontracting, so arbitrator didn’t err in considering past interpretations.
Resolution Performance v. Paper
Allied Industrial Union (5th Cir 03/06/2007)
http://caselaw.lp.findlaw.com/data2/circs/5th/0530813cv0p.pdf
The employer petitioned the trial court, seeking to vacate a grievance arbitration award rendered in favor of the union. The dispute related to the employer’s use of subcontractors (rather than bargaining unit members) for certain work. The trial court vacated the arbitration award, and the 5th Circuit reversed. The court reasoned that the arbitrator did not err in considering past interpretations of the collective bargaining agreement (CBA) after concluding that the agreement was ambiguous on the issue of subcontracting. The court observed that its decision was consistent with Folger Coffee Co. v. Int’l Union, 905 F2d 108 (5th Cir 1990).
Fed - Reasonable cause not required for indefinite suspension (2-1).
Perez v. Department of Justice (Fed
Cir 03/16/2007)
http://caselaw.lp.findlaw.com/data2/circs/fed/063144p.pdf
Perez challenged an arbitrator's decision that the employer was not required to show reasonable cause for a suspension if a thirty-days notice of its proposed action was given. The Federal Circuit affirmed. The Civil Service Reform Act provided an employee against whom an action was proposed was entitled to at least 30 days' advance written notice, unless there was reasonable cause to believe the employee had committed a crime for which a sentence of imprisonment may be imposed. Because 31 days notice was given, the court concluded that the reasonable cause requirement was not applicable before suspending him. The DISSENT argued that reasonable cause was required for all indefinite suspensions.
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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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