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Arbitration Law Memo May 2008
by Ross Runkel at LawMemo

Arbitration Law Memo May 2008
by LawMemo - First in Employment Law

*** Arbitration - Individual Arbitration Agreements ***

*** Arbitration - Collective Bargaining Agreements ***

*** Arbitration - Individual Arbitration Agreements ***

CT – Arbitration clause in lost contract enforced.

Host America v. Ramsey (Connecticut Ct App 05/20/2008)
http://www.jud.state.ct.us/external/supapp/Cases/AROap/AP107/107ap295.pdf

Ramsey filed a breach of an employment contract claim with the American Arbitration Association. The employer sought a court injunction to prevent arbitration. The trial court denied injunctive relief; the Connecticut Appellate Court affirmed. The executed employment contract was lost and replaced. The court concluded that the trial court’s findings (the lost contract existed, it was unavailable, and the contents of the lost contract were known) were not clearly erroneous.

OH – Arbitration was required on all claims except employment discrimination.

Marks v. Morgan Stanley (Ohio Ct App 04/17/2008)
http://www.sconet.state.oh.us/rod/docs/pdf/8/2008/2008-ohio-1820.pdf

Marks sued the employer for employment discrimination, breach of contract , and other claims. The trial court denied the employer’s motion to compel arbitration. The Ohio Court of Appeals affirmed in part and reversed in part. The court concluded that the employment agreement required arbitration of customer lists and confidential information only. With respect to the arbitration clause in the Uniform Application for Securities Industry Registration or Transfer (Form U-4), the court concluded that all of the claims against the employer must be arbitrated save one. The court stated Form U-4 did not require arbitration of employment discrimination (as of January 1, 1999, Rule 10201(b) of the NASD’s Code of Arbitration) and that the employment agreement did not cover employment discrimination.

*** Arbitration - Collective Bargaining Agreements ***

CA – School board erred in overturning grievance arbitration award rendered in union's favor.

California School Employees Assoc v. Bonita Unified Sch Dist (California Ct App 05/28/2008)
http://www.courtinfo.ca.gov/opinions/documents/B200141.PDF

The public school district summarily discharged one of its teachers without subjecting him to progressive discipline.  The union filed a grievance, and the employee was reinstated with backpay and benefits by an arbitrator.  The school board overturned that decision, so the union petitioned for confirmation of the arbitration award and a writ of mandate directing the board to comply with that award.  The trial court granted the petition in its entirety.  The court affirmed, concluding that 1) the arbitration award was "final and binding" under the terms of the parties' collective bargaining agreement; and 2) none of the statutory grounds for vacating the award (set forth in California Code Civ. Proc. Section 1286.2) was applicable.

MA - Statute prevailed over CBA.

City of Somerville v. Somerville Municipal Employees Assoc (Massachusetts 05/22/2008)
http://www.lawmemo.com/docs/ma/municipal.htm

The union member grieved the appointment of a nonunion member to the position of municipal veterans' services director. An arbitrator determined that the appointment violated the parties' collective bargaining agreement (CBA). The trial court and the appellate court below affirmed. The court reversed, concluding that MGLA c.115, section 10 granted exclusive authority to the mayor to fill the position (subject to city council approval).  The court discerned a material conflict between the statutory power vested in the mayor and the terms of the CBA.

CA – Requiring discharged employee to share cost of private attorney was unconstitutional.

Soto v. County of Riverside (California Ct App 04/25/2008)
http://www.courtinfo.ca.gov/opinions/documents/E042725.PDF

Soto sued the employer for damages and injunctive relief alleging the unconstitutionality of a requirement of the memorandum of understanding (MOU) that a disciplined employee pay half of the grievance hearing costs if private counsel was retained in place of union representation. The trial court granted Soto’s motion for summary judgment. The California Court of Appeal agreed the provision was unconstitutional in that the employer had a constitutional obligation, as recognized in California Teachers Assn. v. State of California, 20 Cal 4th 327 (1999) and Florio v. City of Ontario, 130 Cal App 4th 1462 (2005), to provide a due process hearing without requiring the payment of one-half the costs of arbitration.

1st – Industrial double jeopardy doctrine did not bar subsequent discipline.

Zayas v. Bacardi (1st Cir 04/18/2008)
http://laws.findlaw.com/1st/071950.html

Zayas was suspended from work without pay and then discharged. The arbitrator ruled in favor of the employer. The trial court upheld the arbitral award. The 1st Circuit affirmed. The issue on appeal was whether the suspension followed by the discharge violated the doctrine of industrial double jeopardy. The court found that the suspension for investigation of Zayas’ conduct did not bar subsequent discipline.

CT – Arbitrator allowed to consider acceptance of accelerated rehabilitation as evidence.

AFSCME v. Dept of Correction (Connecticut Ct App 04/29/2008)
http://www.jud.state.ct.us/external/supapp/Cases/AROap/AP107/107AP228.pdf

The trial court denied the union’s application to vacate an arbitration award upholding an employee’s discharge. The Connecticut Appellate Court affirmed. The union argued that the arbitrator impermissibly relied upon the employee’s acceptance of accelerated rehabilitation for the criminal charges against her. Considering that the Connecticut Supreme Court held that a nolo contendere plea could be considered as evidence in an arbitration proceeding, the court concluded that the arbitrator was not precluded from taking the employee’s acceptance of accelerated rehabilitation into account.

1st – Arbitrator’s award upholding discharge for failure to deliver packages was not in manifest disregard of law.

Ramos-Santiago v. United Parcel (1st Cir 04/24/2008)
http://laws.findlaw.com/1st/071024.html

Ramos-Santiago sued the employer to vacate an arbitration award finding Ramos’ discharge justified under the collective bargaining agreement (CBA). The trial court confirmed the arbitrator’s award. The 1st Circuit affirmed. The arbitrator found that Ramos’ conscious decision not to deliver 37 packages violated Article 11, section 3 of the CBA, which provided for the summary discharge of an employee who declared a strike, work stoppage, slowdown, walkout or other action which interrupted the operations of the employer. Because the text of Article 11, section 3 did not require group action, the court concluded that the arbitrator did not act in manifest disregard of the law.

6th – ADA claim in federal court was not collaterally estopped by prior arbitration award (2-1).

Nance v. Goodyear Tire (6th Cir 05/23/2008)
http://caselaw.findlaw.com/data2/circs/6th/066563pv1.pdf

The arbitrator found that Nance resigned without notice under the collective bargaining agreement (CBA). Nance sued the employer for violation of the Americans with Disabilities Act (ADA) and other federal and state claims. The trial court granted the employer’s motion for summary judgment finding that Nance’s ADA claims were barred by collateral estoppel. The 6th Circuit affirmed on other grounds.

One issue on appeal was whether the arbitration determining that Nance violated the terms of the CBA precluded her from re-litigating that issue in a related suit to vindicate her statutory rights under the ADA. The court said no, finding that Alexander v. Gardner-Denver Co., 415 US 36 (1974) and its progeny reserved to the federal courts the application of facts to anti-discrimination statutes. The court cited McDonald v. City of West Branch, 466 US 284 (1984) which extended Alexander to section 1983 claims and held “that in a section 1983 action, a federal court should not afford res judicata or collateral-estoppel to effect an award in an arbitration proceeding brought pursuant to the terms of a collective-bargaining agreement.” The court affirmed because Nance did not raise a genuine issue of material fact as to any of her claims.

The DISSENT argued that Alexander disallowed the use of claim preclusion (res judicata), but not issue preclusion (collateral estoppel) to bar re-litigation of an issue that was solely dependent on application of the CBA, such as the resignation-under-the-CBA issue in this case.

1st – Arbitrator’s application of continuing violation doctrine drew its essence from CBA.

UMass v. UFCW (1st Cir 05/15/2008)
http://laws.findlaw.com/1st/072527.html

The trial court confirmed the arbitral award. The 1st Circuit affirmed. The employer argued that the arbitrator’s procedural holding applying the continuing violation doctrine contradicted the collective bargaining agreement (CBA) which required a grievance to be filed within seven days. The court found that the arbitrator’s application of the continuing violation doctrine for failure to provide differential pay for holidays not worked, where a prior arbitration award required such payment, drew its essence from the CBA.

7th - Employee's ADEA claim was properly treated as a "minor dispute" under Railway Labor Act.

Miller v. American Airlines (7th Cir 05/05/2008)
http://caselaw.lp.findlaw.com/data2/circs/7th/071518p.pdf

Miller sued his employer (a major airline), asserting a disparate treatment age discrimination claim under the Age Discrimination in Employment Act (ADEA).  His claim arose from the allegations that the employer failed to offer him a job with salary comparable to his previous job of flight engineer, and that a provision in his collective bargaining agreement (CBA) was facially discriminatory.  The trial court deemed the comparable salary matter a "minor dispute" under the Railway Labor Act (RLA) and referred it to arbitration.  An arbitrator determined that Miller was not entitled under his CBA to a position with salary comparable to his flight engineer position.  The trial court adopted that finding, and further concluded that Miller's claim regarding the alleged facially discriminatory CBA provision was not within the scope of his Equal Employment Opportunity Commission (EEOC) charge.  The 7th Circuit affirmed, agreeing with 1) the trial court's characterization of the comparable salary allegation as a minor dispute under the RLA; and 2) the trial court's conclusion that the remaining allegation was not within the scope of Miller's EEOC charge.

 

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