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Arbitration Law Memo July 2008
by Ross Runkel at LawMemo
| Arbitration Law Memo - July 2008 LawMemo First in Employment Law Arbitrator biographies and awards: National Arbitration Center |
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Arbitration - Individual Arbitration Agreements *** ***
Arbitration - Collective Bargaining Agreements ***
*** Arbitration - Individual Arbitration Agreements ***MO - Continued at-will employment does not constitute legal consideration for a contract to arbitrate.Morrow v. Hallmark Cards (Missouri Ct App 06/30/2008) Morrow sued the employer, asserting state law claims for age discrimination and retaliation. The trial court granted the employer's motion to compel arbitration, and ultimately dismissed the case. The court reversed. The employer's arbitration agreement was presented to employees as a condition of continued employment. Employees were deemed to have accepted the agreement by continuing to work after being notified of its existence. The agreement was one-sided, in that the employer was not obligated to arbitrate any of its potential claims. The court held that "the arbitration program is not a contract but a term or condition of employment-at-will that terminates when the employment terminates." The court concluded that "the purported 'contract' lacks mutuality in the absence of some...legal consideration to support an agreement requiring that the employees unilaterally give up their right of access to the courts." Significantly, the court also concluded that "continued at-will employment...cannot constitute legal consideration for a contract to arbitrate." Since Morrow was no longer an employee at the time she filed suit, and thus not subject to the employer's arbitration agreement, the court reversed. CA - Provision in
adhesive arbitration agreement, giving arbitrator exclusive authority to
decide enforceability, was unconscionable.
Ontiveros v. DHL (California Ct App 06/30/2008) Ontiveros sued the employer, asserting various claims under California's Fair Employment and Housing Act (FEHA). The trial court denied the employer's motion to compel arbitration, based on its determination that the employer's arbitration agreement was a contract of adhesion, unconscionable, and unenforceable. The court affirmed. The arbitration agreement provided that issues of unconscionability and enforceability were to be determined by an arbitrator (rather than a judge). The primary issue on appeal was whether that provision was enforceable. The court held that, at least where (as here) an employer's arbitration agreement is a contract of adhesion, such a provision is not enforceable. The court reasoned, "[w]e have a genuine concern about the potential for the inequitable use of such arbitration provisions in areas, such as employment, where the parties are not at arm's length and do not have equal bargaining power. In such situations, in which one party tends to be a repeat player, the arbitrator has a unique self-interest in deciding that a dispute is arbitrable." The court concluded ultimately that the trial court didn't err in deciding the issue of enforceability and determining the agreement to be unenforceable. 9th - Employer neither breached arbitration agreement nor waived its right to arbitration.Cox v. Ocean View Hotel (9th Cir 07/23/2008) Cox sued the employer in state court, asserting a state law discrimination claim. The employer removed the case to federal court and moved to compel arbitration. The trial court denied that (via partial summary judgment in Cox's favor), based on its determination that the employer breached the parties' arbitration agreement and waived its right to arbitration by rebuffing Cox's earlier attempt to initiate arbitration. The 9th Circuit reversed, concluding that 1) Cox's earlier attempt to initiate arbitration was defective, so the employer didn't breach the arbitration agreement when it rebuffed that attempt; and 2) under the relevant factors set forth in St. Agnes Med. Ctr. v. PacifiCare of Cal., 82 P3d 727 (Cal. 2003), the trial court erred in determining that the employer waived its right to arbitration. *** Arbitration - Collective Bargaining Agreements ***2nd - CBA's election-of-remedies provision didn't violate Title VII.Richardson v. Commn on Human Rights (2nd Cir
07/07/2008) The primary issue on appeal was whether an election-of-remedies provision in a collective bargaining agreement (CBA) between Richardson's union and public employer violated Title VII. The provision stated that a grievance was not subject to arbitration under the CBA's grievance procedure if it arose from the same nucleus of operative facts as a complaint filed with Connecticut's Commission on Human Rights and Opportunities (CHRO). Richardson argued that the provision violated Title VII's prohibition against retaliation, because it resulted in his grievance being dropped as the result of a discrimination charge he filed with the CHRO. The 2nd Circuit rejected that argument. Under Alexander v. Gardner-Denver Co., 415 US 36 (1974) and its progeny, a collective bargaining agreement may not waive an employee's right to a judicial forum for causes of action created by Congress. The Gardner-Denver doctrine thus provides a form of protection from policies that violate Title VII. Similarly, the doctrine protects the Equal Employment Opportunity Commission's (EEOC's) ability to investigate and prosecute cases. In contrast, Title VII's anti-retaliation provision generally protects employees from individual acts of retaliation. The court held that neither the Gardner-Denver doctrine nor Title VII were violated by the CBA's election-of-remedies provision, reasoning 1) employees were free under the provision to elect to file charges with the EEOC or CHRO and then file suit - they were simply denied the ability to avail themselves of the CBA's grievance procedure once that election was made; and 2) Richardson failed to establish that agreeing (or adhering) to the election-of-remedies provision constituted an adverse employment action under Title VII. CT - Trial court
improperly vacated arbitration award.
McCann v. Dept of Environmental Protection
(Connecticut 07/25/2008) The arbitrator rendered an award in favor of the
employer's discharge of McCann, which the trial court vacated. The Supreme
Court of Connecticut reversed the trial court. McCann was discharged for
personal use of his employer-issued computer. The court determined that
(1) the arbitrator's refusal to accept stipulated agreements as evidence
the employer did not have a zero tolerance policy, (2) the factual errors
made by the arbitrator, and (3) the arbitrator's finding of just cause for
discharge under the collective bargaining agreement (CBA) did not provide
sufficient support to vacate the arbitration award. 6th - Supplemental award exceeded authority of arbitrator (2-1).Totos Isotoner v. Intl Chemical Workers (6th Cir
07/18/2008) The employer unilaterally increased the costs of health care premiums under the 1998 collective bargaining agreement (CBA) for which the union filed a refusal to bargain in good faith. The arbitrator found in favor of the union and the employer complied up to the beginning date of the 2002 CBA. The union complained to the arbitrator that the employer was not in compliance with the original award. The arbitrator agreed with the union. The trial court vacated the supplemental award. The 6th Circuit affirmed. The issue on appeal was whether the arbitrator had authority to interpret the 2002 CBA in enforcing the original award during the supplemental compliance proceedings. The court found that the parties did not submit a grievance for resolution under the 2002 CBA and that the arbitrator acted outside his authority in opining that "if Management's decision was violative of the 1998-2001 agreement it is violative of the 2002-2007 agreement." The court rejected the union's argument that the employer's statutory duties to bargain in good faith were incorporated into a contractual recognition clause where the arbitrator did not rest his decision on the contractual recognition clause. The DISSENT framed the issue as whether the supplemental award drew its essence from the 1998 CBA or the original award; concluding that any forward-looking, quasi-injunctive relief in the original award dated March of 2004 must have had life beyond the April 26,2002 expiration date of the 1998 CBA. PA - Employer could not unilaterally eliminate past practice of overtime.Penns Manor School v. Educational Support
(Pennsylvania Cmwlth 07/17/2008) The employer petitioned to vacate an arbitration award. The trial court denied the petition. The Pennsylvania Commonwealth Court affirmed. The union grieved the loss of overtime work by custodians on weekends for scheduled events at schools. The arbitrator's award found that "past practices" of offering overtime work to custodians had developed and that the employer could not eliminate "after-hours overtime" unilaterally. The employer argued that the collective bargaining agreement (CBA) made the employer "the sole judge of the necessity of overtime." The court concluded that the arbitrator's interpretation was rationally derived from the CBA, viewed in light of its language, its content, and evidence of the parties' long standing practice and intention regarding overtime. 7th - Dispute between union and employer fell within neutrality agreement's arbitration clause.United Steel Union v. TriMas Corp (7th Cir
07/03/2008) The union filed suit under the Labor-Management Relations Act (LMRA), seeking to compel arbitration of a dispute relating to a "neutrality agreement" between the parties. The trial court granted summary judgment in favor of the union. The 7th Circuit affirmed, concluding that "the district court was correct in finding that the dispute was covered by the language of the [neutrality agreement's] arbitration clause and in leaving consideration of ... extrinsic evidence to the arbitrator." 2nd - CBA covering a one-person bargaining unit was a valid contract enforceable under Section 301 of the LMRA.Local 337 v. 1864 Tenants Assoc (2nd Cir 07/08/2008) The employer appealed from the trial court's judgment confirming an interest arbitration award rendered in the union's favor. The 2nd Circuit affirmed, rejecting the employer's argument that a collective bargaining agreement covering a bargaining unit composed of a single employee was not a valid contract enforceable under Section 301 of the Labor Management Relations Act (LMRA).
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Employment Law Editor: Ross Runkel,
Professor of Law Emeritus.
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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
