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Arbitration Law Memo November 2008
by Ross Runkel at LawMemo
| Arbitration Law Memo - November 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 ***TX - Sabine Pilot claim was not excepted from NASD arbitration as employment discrimination claim.In re Next Financial Group (Texas
11/14/2008) Employee Clements sued the employer (Next Financial Group) for wrongful discharge alleging he was discharged for refusing to conceal a trader's fraudulent "churning" transactions. The trial court denied the employer's motion to compel arbitration under the National Association of Securities Dealers (NASD) rules. The Texas Supreme Court reversed. The issue on appeal was whether Clements must arbitrate a claim that his employer wrongfully discharged him for refusing to commit an illegal act. The court held that Clements Sabine Pilot claim (Sabine Pilot Serv., Inc. v. Hauck, 687 SW2d 733, (1985)) fell within the scope of his arbitration agreement and was not subject to an exception limited to statutory employment discrimination claims. Under the current language of NASD rules, claims arising out of employment and employment termination were subject to arbitration except for claims for employment discrimination and sexual harassment. The court did not find the change to "arising out of" narrower than the previous language "arising out of or in connection with." The court rejected Clements argument that a claim alleging employment discrimination in violation of a statute was excepted from compelled arbitration. The court did not view a Sabine Pilot claim as a discrimination claim. *** Arbitration - Collective Bargaining Agreements ***US - Oral argument on whether
CBA waives employee's right to sue for violation of anti-discrimination
statutes.
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Penn Plaza LLC v. Pyett (oral argument 12/01/2008) When employees sued claiming age discrimination, the employer filed a motion to compel them to take the case to arbitration. The employees were covered by a collective bargaining agreement which prohibited age discrimination and also said "All such claims shall be subject to the grievance and arbitration procedure [in the collective bargaining agreement] as the sole and exclusive remedy for violations." The trial court denied the motion to compel arbitration, and the 2nd Circuit affirmed. The 2nd Circuit held that "arbitration provisions contained in a [collective bargaining agreement], which purport to waive employees' rights to a federal forum with respect to statutory claims, are unenforceable." The US Supreme Court is reviewing the 2nd Circuit judgment. 5th – NRAB acted within the scope of its jurisdiction when it ordered railway/employer to produce documents.BNSF Railway v. Brotherhood of
Maintenance (5th Cir 11/24/2008) The union and railway/employer were parties to a multi-employer collective bargaining agreement containing certain protections for workers displaced by subcontracting. The union filed claims based on those protections, which were submitted to the National Railroad Adjustment Board (NRAB) for arbitration as a minor dispute. The employer failed to comply with the NRAB’s discovery order, so the NRAB made an “adverse inference” that the facts not disclosed by the employer were favorable to the union. Based on that adverse inference, the NRAB rendered an award in the union’s favor. The trial court vacated the award, finding that the NRAB acted outside its authority in directing production of the documents at issue. The 5th Circuit affirmed the order vacating the award, based on its conclusion that the NRAB failed to carry out a critical element of the required analysis. The court also concluded, however, that the NRAB acted within the scope of its jurisdiction in ordering production of the documents, and remanded the case to the board for consideration of the missing element in its analysis.
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Employment Law Editor: Ross Runkel,
Professor of Law Emeritus.
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