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Arbitration Law Memo November 2007
by Ross Runkel at LawMemo
Arbitration Law Memo November 2007
by LawMemo - First in Employment Law
Also by free monthly email.
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Arbitration - Individual Arbitration Agreements ***
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7th - FAA's three month limitations period ends when notice was served.
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6th - Continuation of employment was acceptance of arbitration agreement (2-1).
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Arbitration - Collective Bargaining Agreements ***
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CA - Employee was not required to exhaust CBA remedies prior to filing FEHA claim.
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PA - Arbitrator's award finding just cause to discharge narcotics agent affirmed.
*** Arbitration - Individual Arbitration Agreements ***
US - Supreme Court supplemental briefs on contract agreeing to expand judicial review of an arbitration award.
Hall Street Associates v. Mattel
[Not an employment law case]
Details, all briefs: http://www.lawmemo.com/supreme/case/HallStreet/
After hearing oral argument on November 7, the US Supreme Court requested supplemental briefs on three questions: "(1) Does authority exist outside the Federal Arbitration Act (FAA) under which a party to litigation begun without reliance on the FAA may enforce a provision for judicial review of an arbitration award? (2) If such authority does exist, did the parties, in agreeing to arbitrate, rely in whole or part on that authority? (3) Has petitioner in the course of this litigation waived any reliance on authority outside the FAA for enforcing the judicial review provision of the parties’ arbitration agreement?" In briefs filed November 27, Hall Street argued that the district court had inherent authority and authority under the Federal Rules because the arbitration agreement was part of the trial process and was entered as a court order, and that the agreement was enforceable under the common law of Oregon; Mattel argued the opposite, and also argued that both parties had treated this cases as an FAA case all along. Final reply briefs are due December 3.
7th - FAA's three month limitations period ends when notice was served.
Webster v. A T Kearney (7th Cir 11/02/2007)
http://caselaw.lp.findlaw.com/data2/circs/7th/063094p.pdf
The issue presented for decision was when did the three-month limitations period end for filing a motion to vacate, confirm or modify an arbitration award under the Federal Arbitration Act. The court stated that " [t]o the extent that our use of the term 'filing' in those cases (Olson v. Wexford Clearing Servs. Corp., 397 F3d 488 (2005) and Papapetropoulous v. Milwaukee Transp. Servs., Inc., 795 F2d 591 (1986)) is misleading, we clarify now and for purposes of future cases that service of a motion to vacate is the act that stops the three-month statute of limitations."
1st - Unlike Title VII and the ADA, the FLSA does not require a heightened standard of scrutiny for notice and waiver of the right to a judicial forum.
Skirchak v. Dynamics Research (1st
Cir 11/19/2007)
http://laws.findlaw.com/1st/062136.html
Skirchak sued the employer in a class action, asserting claims for violation of the Fair Labor Standard Act (FLSA). The primary issue on appeal was whether a class action waiver in the employer's arbitration agreement was enforceable. The 1st Circuit held that it was not.
The court observed that under the language of the arbitration agreement the issue on appeal normally would have been a matter for the arbitrator. Moreover, in Green Tree Financial Corp. v. Bazzle, 539 US 444 (2003) the United States Supreme Court indicated that when claims are submitted to arbitration the issue of whether class arbitration is prohibited presents a question for the arbitrator. The 1st Circuit adhered to that view in Anderson v. Comcast Corp., 500 F.3d 66 (1st Cir 2007). The court noted, however, that the parties agreed that the arbitration agreement "should be assumed to be read to waive class claims, and the question of whether the [arbitration agreement], so read, may be enforced under the FAA is for the court."
Skirchak argued that the application of normal state law unconscionability analysis should have been heightened because the FLSA is a federal statute protecting employee rights. The court noted that "[u]nder Title VII and the ADA, we have applied an independent federal scrutiny of the adequacy of the notice and waiver of judicial rights because in the language of these statutes Congress referred to 'appropriate' waivers." The court rejected Skirchak's argument abruptly, however, stating simply "[n]o 'appropriateness' requirement exists in the FLSA." Applying state law unconscionability principles, the court concluded that the class action waiver was unconscionable. The court noted "[w]e do not reach the argument that waivers of class actions themselves violate either the FLSA or public policy."
6th - Continuation of employment was acceptance of arbitration agreement (2-1).
Seawright v. American General (6th
Cir 11/13/2007)
http://caselaw.lp.findlaw.com/data2/circs/6th/075091p.pdf
Seawright sued the employer for violation of Tennessee anti-discrimination law and the Family and Medical Leave Act (FMLA). The trial court denied the employer's motion to compel arbitration. The 6th Circuit reversed. At issue was whether an arbitration agreement existed and, if so, whether the agreement was enforceable. The court held that Seawright's knowing continuation of employment after the effective date of the arbitration program constituted acceptance of a valid and enforceable contract to arbitrate. The DISSENT argued that the arbitration agreement - which was not signed, contained a unilateral working as acceptance provision, and constituted a total waiver of the right to access a court - exceeded the acceptable limit of what employers could force upon their employees without the employees' consent.
*** Arbitration - Collective Bargaining Agreements ***
CA - Employee was not required to exhaust CBA remedies prior to filing FEHA claim.
Ortega v. Contra Costa (California
Ct App 11/09/2007)
http://www.courtinfo.ca.gov/opinions/documents/A113341.PDF
Ortega sued the employer for violation of the Fair Employment and Housing Act (FEHA) challenging his demotion and discharge. The trial court dismissed each complaint for failure to exhaust administrative remedies provided be the collective bargaining agreement (CBA). The California Court of Appeal reversed. Ortega filed grievances under the CBA for both claims, but did not complete the CBA grievance process before filing the FEHA actions in court. The court, applying Camargo v. California Portland Cement Co., 86 Cal App 4th 995 (2001), found that a CBA-mandated arbitration had no preclusive effect on FEHA claims. The court noted that the CBA did not waive the judicial forum in a clear and unmistakable manner and that the record was unclear on the procedures of the arbitration to allow for the full litigation and fair adjudication of the FEHA claim.
PA - Arbitrator set aside employee's discharge.
Allegheny
County v. Construction General (Pennsylvania Cmwlth Ct 11/02/2007)
http://www.courts.state.pa.us/OpPosting/CWealth/out/2050CD06_11-2-07.pdf
The arbitrator set aside the discharge of the employee. The trial court denied the employer's petition to vacate. The Pennsylvania Commonwealth Court affirmed. The employee allegedly sexually harassed a non-employee, where the employer's harassment policy did not cover non-employees. The court stated that the issue submitted to the arbitrator was within the terms (just cause) of the collective bargaining agreement (CBA) and that the award was rationally derived from the CBA.
TX - Impasse arbitration panel exceeded its authority.
City of Beaumont v. IAFF (Texas Ct
App 11/08/2007)
http://www.9thcoa.courts.state.tx.us/opinions/HTMLopinion.asp?OpinionID=9225
The trial court confirmed an arbitration compensation award. The Texas Court of Appeals reversed. The arbitration panel did not follow Article XXXIV Section 3(c) of the collective bargaining agreement (CBA), which required consideration of "[t]he total compensation and terms and conditions of employment of State Civil Service certified, full-time firefighters in all Texas cities." The court held that the arbitration panel exceeded its authority by considering an issue for which proper notice was not given, by arbitrating an issue that was not in dispute, and by proceeding to arbitrate without enforcing all of the provisions which the parties had agreed would apply to their dispute.
PA - Arbitrator's award finding just cause to discharge narcotics agent affirmed.
Narcotics Agents v. OAG
(Pennsylvania Cmwlth 11/15/2007)
http://www.courts.state.pa.us/OpPosting/CWealth/out/394CD07_11-15-07.pdf
The arbitrator entered an award that the employer had just cause to discharge a narcotics agent who had disclosed information to a newspaper about a grand jury. The union petitioned to vacate the award. The Pennsylvania Commonwealth Court affirmed the arbitrator's award. The court concluded that ample evidence in the record supported the arbitrator's finding that the narcotics agent lied to investigators about violating his secrecy oath with respect to grand jury proceedings.
Dist - Request for attorney fees in arbitration case must first be presented to Public Employees Relations Board.
AFGE v. DC WASA (District of
Columbia 11/01/2007)
http://www.dcappeals.gov/dccourts/appeals/pdf/06-CV-35.PDF
The issue was whether the union attorneys could seek attorney fees for representation of a union member in an arbitration by filing suit under the Back Pay Act in the trial court. The trial court held it lacked jurisdiction. The District of Columbia Court of Appeals affirmed. The court concluded that the union had to exhaust its administrative remedies before the Public Employees Relations Board prior to action in the trial court.
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