*** Arbitration - Individual Arbitration Agreements ***

• US - Supreme Court will decide whether FAA permits arbitrators to impose class arbitration on parties whose arbitration clauses are silent on that issue.

• CA - Wage claim required to be arbitrated.

*** Arbitration - Collective Bargaining Agreements ***

• 4th – Grievances were arbitrable pursuant to provisions of expired CBA.

• MA - Settlement agreement established discrimination in grievance hearing.

• WI –Staffing decision did not fall within the scope of sheriff’s constitutionally protected powers.

• WI – Arbitrator’s interpretation of CBA didn’t constitute a “perverse misconstruction.”

• Dist - Backpay award to DD employees was subject to setoff to allow for interim earnings.

*** Arbitration - Individual Arbitration Agreements ***

US - Supreme Court will decide whether FAA permits arbitrators to impose class arbitration on parties whose arbitration clauses are silent on that issue.

Stolt-Nielsen S.A. v. AnimalFeeds International (certiorari granted 06/15/2009)
Details, briefs: http://www.lawmemo.com/supreme/case/Stolt-Nielsen

[Not an employment case] The parties in this case are parties to international maritime contracts that contain arbitration clauses. The contracts are silent as to whether arbitration is permissible on behalf of a class of contracting parties. A panel of arbitrators, tasked with deciding whether that silence permitted or precluded class arbitration, received evidence and briefing from both sides. The arbitrators issued an award deciding that the contracts permit class arbitration.

Stolt-Nielsen petitioned the United States District Court to vacate the award. That court did vacate the award on the ground that the award was made in manifest disregard of the law. The 2nd Circuit reversed, and applied the rule that courts vacate arbitration awards in the rare instances in which "the arbitrator knew of the relevant [legal] principle, appreciated that this principle controlled the outcome of the disputed issue, and nonetheless willfully flouted the governing law by refusing to apply it." Using this principle, the court found that the arbitration panel did not manifestly disregard a rule of federal maritime law, and did not manifestly disregard New York State law. The US Supreme Court granted certiorari on June 15 to review the 2nd Circuit judgment.

CA - Wage claim required to be arbitrated.

Sonic-Calabasas v. Moreno (California Ct App 05/29/2009)
http://www.courtinfo.ca.gov/opinions/documents/B204902.PDF

Moreno filed an administrative wage claim against the employer. The employer petitioned the trial court to dismiss the administrative proceeding and compel arbitration. The trial court denied the petition. The California Court of Appeal reversed. The court faced the following issues: (1) whether Preston v. Ferrer, 128 SCt 978 (2008), compelled the conclusion that the Labor Commissioner's jurisdiction over Moreno's statutory wage claim was divested by the Federal Arbitration Act (FAA), and, if not, (2) whether Moreno contractually waived the statutory right to pursue his wage claim in an administrative forum, and, if so, (3) whether the waiver was unenforceable for public policy reasons under Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal4th 83 (2000) or Gentry v. Superior Court, 42 Cal4th 443 (2007).

(1) Preston held that "when parties agree to arbitrate all questions arising under a contract, state laws lodging primary jurisdiction in another forum, whether judicial or administrative, are superseded by the FAA." The court found that the parties disagreed whether it would be unconscionable under Armendariz or Gentry to restrict the arbitration clause by invalidating Moreno's right to pursue an administrative wage claim (Berman waiver).

(2) According to the arbitration agreement, Moreno could pursue only those administrative remedies that were listed as exceptions to the agreement, and the court found that neither the Division of Labor Standards Enforcement nor the Labor Commissioner was listed among the stated exceptions. The court concluded that Moreno was barred from pursuing an administrative wage claim (Berman waiver).

(3) The court found that there was nothing in the record to indicate enforcing a Berman waiver will significantly impair Moreno's ability to vindicate his statutory rights. The court concluded that Moreno failed to demonstrate either the inadequacy of arbitral forum provided by his arbitration agreement or the existence of a factual basis to invalidate all Berman waivers as against public policy.

*** Arbitration - Collective Bargaining Agreements ***

4th – Grievances were arbitrable pursuant to provisions of expired CBA.

United Steel Union v. Continental Tire (4th Cir 06/09/2009)
http://caselaw.lp.findlaw.com/data2/circs/4th/081778p.pdf

The union sued the employer under Section 301 of the Labor Management Relations Act (LMRA), seeking to compel grievance arbitration of a dispute over pension and health insurance benefits.  The trial court granted summary judgment in favor of the union.  The 4th Circuit affirmed, concluding that 1) the suit was timely filed; and 2) the grievances were arbitrable under the applicable collective bargaining agreement , even though that agreement had expired before the grievances were filed.

MA - Settlement agreement established discrimination in grievance hearing.

MBTA v. Boston Carmen's Union (Massachusetts 06/04/2009)

http://www.lawmemo.com/docs/ma/mbta.htm

The union moved to confirm two arbitration awards finding the employer violated the collective bargaining agreement (CBA) by remedying perceived illegal discrimination. The trial court confirmed the awards. The Massachusetts Supreme Judicial Court affirmed in part and reversed in part.

(1) The employer refused to allow the prospective employee to wear hearing aids to pass the physical examination. The employee complained to the Massachusetts Commission Against Discrimination (MCAD), which resulted in a settlement agreement and employment. The union grieved for the employee who lost the posted vacancy. The arbitrator's award upheld the grievance. The court reversed, finding the settlement agreement, in these circumstances, sufficed to reliably and substantially establish a violation of the law proscribing discrimination that the arbitrator could not ignore without violating public policy.

(2) The employer decided to implement a new list of "spare inspectors" without bargaining, motivated by concern that the old list discriminated against minorities. The arbitrator concluded the employer violated the CBA. The court affirmed because the employer did not convince the arbitrator that it discriminated against minorities in constructing the old list and no employee came forward with a claim of discrimination.

WI –Staffing decision did not fall within the scope of sheriff’s constitutionally protected powers.

Washington County v. Washington County Dep Sheriffs (Wisconsin Ct App 06/16/2009)
http://tinyurl.com/nr3hlf

The deputy sheriff’s union appealed the trial court’s order determining that the union’s grievance was not subject to arbitration.  The dispute arose from the sheriff’s decision to staff a court security screening station with non-bargaining unit “special deputies.”  The court reversed, concluding that the staffing decision did not fall within the scope of the sheriff’s constitutionally protected powers.  The court reasoned that “staffing  [an] x-ray and metal detector security screening station is not one of those ‘certain immemorial principal, and important duties of the sheriff at common law that are peculiar to the office of sheriff and that characterize and distinguish the office.’” 

WI – Arbitrator’s interpretation of CBA didn’t constitute a “perverse misconstruction.”

Baldwin-Woodville Sch Dist v. West Central Ed Assoc (Wisconsin 06/17/2009)
http://tinyurl.com/kppe7f

A public school teacher was awarded backpay as the result of grievance arbitration. The employer's position was that the grievance was not filed in a timely manner. The award was confirmed by the trial court, but vacated by the appellate court below.  The court reversed, reinstating the award.  The court concluded that “the arbitrator’s construction of the [collective bargaining] agreement had a foundation in reason” and “was not a perverse misconstruction” of the agreement.

Dist - Backpay award to DD employees was subject to setoff to allow for interim earnings.

Fraternal Order of Police v. DC PERB (District of Columbia (06/11/2009)
http://www.dcappeals.gov/dccourts/appeals/pdf/07-CV-1089.PDF

Police officers were awarded backpay as the result of grievance arbitration.  The District of Columbia Public Employee Relations Board (PERB) modified the backpay award to allow a setoff for interim earnings.  The trial court affirmed.  The court affirmed, concluding that the PERB decision was supported by substantial evidence and reflected a “not plainly erroneous” interpretation of the District of Columbia Comprehensive Merit Personnel Act (CMPA).

*** Arbitration - Individual Arbitration Agreements ***

• NY - Arbitration fee-splitting clause was unenforceable (3-2).

• 6th - Arbitration cost-splitting clause enforced where employee can seek waiver.

• OR – Ruling on motion to compel arbitration deferred until after resolution of class certification issues.

*** Arbitration - Collective Bargaining Agreements ***

• NY - Arbitration for uncertificated teacher violated public policy (3-2).

• MO - Purported arbitration award not confirmed, since award was rendered as intermediate step in grievance process.

• 2nd - Employer required to arbitrate changes in employees' benefits plans.

*** Arbitration - Individual Arbitration Agreements ***

NY - Arbitration fee-splitting clause was unenforceable (3-2).

Brady v. Williams Capital (New York App Div 04/30/2009)
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_03458.htm

This appeal raised two questions: first, whether the American Arbitration Association's (AAA) employer pays rule should supersede the fee-splitting provision of the arbitration agreement; second, whether the fee-splitting arbitration provision should be invalidated as violative of public policy. The court found the parties controlled the terms of the arbitration agreement and ruled that the fee-splitting provisions of the arbitration agreement governed over the AAA employer pays rule. Because Brady established that the arbitration fees and costs were so high as to discourage her from vindicating her state and federal statutory rights in the arbitral forum, the court concluded the arbitration clause was unenforceable. The DISSENT argued it was unclear why someone whose income totaled more than $1,500,000 from 1999 through 2004 would be unable to pay $21,450 for her share of the arbitrator's estimated fee.

6th - Arbitration cost-splitting clause enforced where employee can seek waiver.

Mazera v. Varsity Ford (6th Cir 05/19/2009)
http://www.ca6.uscourts.gov/opinions.pdf/09a0178p-06.pdf

Mazera sued the employer, asserting state and federal claims for race and disability discrimination.  Mazera moved for a declaratory judgment that his employer’s arbitration agreement was unenforceable.  The trial court denied Mazera’s motion, and granted the employer’s motion to compel arbitration.  However, the trial court also severed a cost-splitting provision that required Mazera to deposit up to $500 of the arbitration costs.  The 6th Circuit affirmed as to enforceability, but reversed as to the cost-splitting provision.  The Court concluded 1) Mazera was not entitled (pursuant to Section 4 of the Federal Arbitration Act (FAA)) to a jury trial regarding validity of the arbitration agreement; and 2) the presence of a “waiver” option in the agreement, allowing employees to seek waiver of the cost-splitting deposit requirement, merited reversal as to the cost-splitting provision.  The court directed that Mazera seek waiver “if he desires to pursue arbitration without having to comply with the cost-splitting provision.”

OR – Ruling on motion to compel arbitration deferred until after resolution of class certification issues.

Green v. Solomon Smith Barney (Oregon Ct App 05/20/2009)
http://www.publications.ojd.state.or.us/A135348.htm

Green sued the employer in a class action, asserting a claim for violation of ORS 652.140 (which requires employers to timely pay wages owing upon termination of employment).  The employer moved to compel arbitration.  The trial court deferred ruling on that motion until after completion of limited discovery relating to the issue of class certification.  Ultimately, the trial court granted class certification as to some claims and denied the employer’s motion to compel arbitration of those claims.  The trial court also denied class certification as to other claims and granted the employer’s motion to compel as to those claims.  On appeal, the employer argued that the trial court violated ORS 36.625 when it deferred ruling on the motion to compel arbitration.  The court disagreed.

ORS 36.625 requires that a trial court “summarily” decide a dispute regarding the arbitrability of claims.  The court held that ”’summarily,’ as used in ORS 36.625, means that the court must decide the issue of arbitrability expeditiously and without a jury.”  The court noted that this definition is consistent with the comment to Section 7 of the Uniform Arbitration Act.  Applying that definition, the court concluded that the trial court acted expeditiously. The court reasoned that it was undisputed the arbitration agreement did not provide for arbitration of class action claims, and arbitration was thus only proper as to those claims that were denied certification.

*** Arbitration - Collective Bargaining Agreements ***

NY - Arbitration for uncertificated teacher violated public policy (3-2).

New York State  Office of Children v. Lanterman (New York App Div 05/14/2009)
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_03808.htm

Lanterman sought arbitration under the collective bargaining agreement (CBA) for her discharge for not having a teaching certificate. The trial court denied the employer's motion to stay arbitration. The New York Appellate Division reversed. The court held that requiring a public entity to arbitrate regarding the discharge of a teacher who failed to obtain or maintain statutorily-mandated teacher certification violated public policy. The DISSENT argued that the public policy exception should not apply where an arbitrator could, after considering all relevant factors, potentially fashion a remedy other than discharge, for example, a suspension without pay or demotion to another open position for which a teaching certificate was not required or some other possible remedy, which would not violate either the CBA or the public policy assuring the qualifications of teachers.

MO - Purported arbitration award not confirmed, since award was rendered as intermediate step in grievance process.

Kritzer v. University of Missouri (Missouri Ct App 05/12/2009)
http://www.courts.mo.gov/file.asp?id=31587

Kritzer appealed the trial court’s judgment denying confirmation of a purported arbitration award and finding she was not entitled to challenge her discharge under Chapter 536 of the Missouri Administrative Procedure Act.  The court affirmed, concluding that 1) the purported arbitration award was rendered as an intermediate step in the employer’s grievance process, and was not binding; and 2) Kritzer was an “at-will” employee not entitled to review under Chapter 536.

2nd - Employer required to arbitrate changes in employees' benefits plans.

United Steel and Service Workers v. E.I. DuPont (2nd Cir 05/01/2009)
http://caselaw.lp.findlaw.com/data2/circs/2nd/081873p.pdf

*** Arbitration - Individual Arbitration Agreements ***

• 5th - Plaintiff waived her right to arbitration.

• WI - Arbitrator didn't manifestly disregard the law by ordering reinstatement when employee didn't request it.

• CA - Arbitration agreement imposed mutual obligations on employee and employer to arbitrate their claims.

• AK - Court remanded for arbitration, if employer paid arbitration costs.

• 3rd - Explicit agreement is essential to the formation of an arbitration contract.

• CA - Class action waiver clause was unconscionable.

*** Arbitration - Collective Bargaining Agreements ***

• US Supreme Court: A provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law (5-4).

• CA - Interest arbitration violated California Constitution's home rule provisions.

*** Arbitration - Individual Arbitration Agreements ***

5th - Plaintiff waived her right to arbitration.

Nicholas v. KBR (5th Cir 04/15/2009)
http://caselaw.lp.findlaw.com/data2/circs/5th/0820140cv0p.pdf

Nicholas sued the employer, alleging that it breached a severance agreement with her deceased husband when it failed to pay his life insurance benefits.  She amended her complaint after the trial court determined that her claim was completely preempted under 29 USC Section 1132(a)(1)(B) of the Employee Retirement Income Security Act (ERISA).  During discovery, Nicholas moved to compel arbitration pursuant to the severance agreement.  The trial court denied the motion, based on its conclusion that Nicholas waived her right to arbitration.  The 5th Circuit affirmed.

Waiver of arbitration will be found when "the party seeking arbitration substantially invokes the judicial process to the detriment or prejudice of the other party."  The court concluded that "the act of a plaintiff filing suit without asserting an arbitration clause constitutes substantial invocation of the judicial process, unless an exception applies."  The court noted, "[w]e emphasize that the legal standard for waiver is the same regardless of which party is the party alleged to have waived arbitration."  Applying that standard, the court determined ultimately that no exception was applicable in this case, that the employer had been prejudiced, and that Nicholas waived her right to arbitration.

WI - Arbitrator didn't manifestly disregard the law by ordering reinstatement when employee didn't request it.

Sands v. Menard (Wisconsin Ct App 04/14/2009)
http://tinyurl.com/c5ttll

An arbitrator found that the employer violated the Equal Pay Act (EPA), Title VII, and state law by paying Sands (a female attorney) less than male comparators and then discharging her in retaliation for exercising her statutory rights.  The arbitrator awarded damages and reinstatement.  The employer sought to vacate the portion of the award ordering reinstatement, arguing that the arbitrator manifestly disregarded the law.  The trial court denied the motion to vacate.  The court affirmed, concluding that the arbitrator didn't manifestly disregard the law by ordering reinstatement in spite of the fact Sands didn't request it.

CA - Arbitration agreement imposed mutual obligations on employee and employer to arbitrate their claims.

Roman v. Superior Court (California Ct App 04/13/2009)
http://www.courtinfo.ca.gov/opinions/documents/B209855.PDF

Roman sued the employer, asserting disability discrimination and retaliation claims under California's Fair Employment and Housing Act (FEHA), as well as a common law claim for wrongful discharge in violation of public policy.  The trial court granted the employer's motion to compel arbitration, so Roman petitioned for a writ of mandate.  The court denied the petition, based principally on its conclusion that the arbitration agreement was not substantively unconscionable.  The arbitration agreement stated in relevant part, "I agree, in the event that I am hired by the company, that all disputes and claims that might arise out of my employment with the company will be submitted to binding arbitration."  The court determined that this provision obligated both the employer and its employees to arbitrate their claims.  The court thus rejected Roman's argument that the agreement imposed a unilateral obligation upon employees to arbitrate their claims.

AK - Court remanded for arbitration, if employer paid arbitration costs.

Gibson v. Nye Frontier Ford (Alaska 04/03/2009)
http://www.state.ak.us/courts/ops/sp-6355.pdf

Gibson sued the employer for overtime compensation under the Alaska Wage and Hour Act (AWHA). The trial court granted the employer's motion to compel arbitration. The Alaska Supreme Court reversed and remanded, giving the employer the option to pay for the arbitration. After finding that the employer could not unilaterally change the arbitration agreement and after severing the unconscionable $50,000.00 appellate threshold provision, the court concluded that requiring Gibson to pay half the costs of arbitration was inconsistent with the AWHA. The court stated the objective of the AWHA was to protect the health, efficiency, and general well-being of workers; and to achieve this end, the AWHA contained provisions that were designed to deter employers from violating the act and to encourage employees to take action to remedy violations. The court opined that imposing substantial forum costs would run counter to the latter strategy.

3rd - Explicit agreement is essential to the formation of an arbitration contract.

Kirlies v. Dickie, McCamey & Chilcote (3rd Cir 03/24/2009)
http://www.ca3.uscourts.gov/opinarch/073504p.pdf

Kirlies sued the employer, asserting various claims under Title VII, the Pennsylvania Human Relations Act, and the Fair Labor Standards Act (FLSA).  The employer moved to compel arbitration, but the trial court denied the motion.  The 3rd Circuit affirmed, concluding that Kirlies did not agree under Pennsylvania law to arbitrate her claims.  The employer argued that arbitration provisions were present in its corporate bylaws, and that Kirlies was properly charged with knowledge of those as a shareholder/director.  The court rejected that argument, noting that "under Pennsylvania law, explicit agreement is essential to the formation of an enforceable arbitration contract."

CA - Class action waiver clause was unconscionable.

Olvera v. El Pollo Loco (California Ct App 04/27/2009)
http://www.courtinfo.ca.gov/opinions/documents/B205343.PDF

Olvera sued the employer in a class action, asserting various state law wage and hour claims.  The employer moved to compel arbitration, but the trial court denied the motion.  The court affirmed, concluding that the employer's arbitration agreement - which contained a class action waiver clause - was unconscionable. The court said it did not need to decide whether the class action waiver was unenforceable under the framework of Gentry v. Superior Court 42 Cal.4th 443 (2007).

*** Arbitration - Collective Bargaining Agreements ***

US Supreme Court: A provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law (5-4).

14 Penn Plaza v. Pyett (US Supreme Court 04/01/2009)
http://www.supremecourtus.gov/opinions/08pdf/07-581.pdf

The relevant collective bargaining agreement requires union members to submit all claims of employment discrimination to binding arbitration under the CBA's grievance and dispute resolution procedures. A number of employees asked the union to file grievances alleging, among other things, that the employers violated the CBA's ban on workplace discrimination by reassigning them on the basis of their age in violation of Age Discrimination in Employment Act of 1967 (ADEA). The union requested arbitration under the CBA, but later withdrew the age-discrimination claims. The employees then filed suit claiming a violation of the ADEA; the district court denied the employers' motion to compel arbitration; the 2nd Circuit affirmed.

The US Supreme Court reversed, holding that a provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law. The Court found that employment-related discrimination claims are "conditions of employment" under the National Labor Relations Act and thus subject to mandatory bargaining. The CBA's arbitration provision must be honored unless the ADEA itself removes this class of grievances from the NLRA's broad sweep. The Court has already held (Gilmer v. Interstate/Johnson Lane (1991)) that the ADEA does not preclude arbitration of ADEA claims. The Court rejected the argument that Alexander v. Gardner-Denver (1974) held that a CBA arbitration clause cannot waive an individual employee's right to litigate.

The DISSENT relied on Alexander v. Gardner-Denver, saying that that case held that rights conferred by Title VII cannot be waived as part of the collective bargaining process. This applies equally to the ADEA, and includes the right to a judicial forum.

CA - Interest arbitration violated California Constitution's home rule provisions.

County of Sonoma v. Superior Court (California Ct App 04/24/2009)
http://www.courtinfo.ca.gov/opinions/documents/A122450.PDF

The County of Sonoma sought relief from the trial court's order compelling interest arbitration with the Sonoma County Law Enforcement Association (SCLEA). The California Court of Appeal reversed. The issue was whether (after County of Riverside v. Superior Court, 30 Cal 4th 278 (2003)) the amended version of Code of Civil Procedure section 1299 et seq continued to intrude upon Sonoma County's constitutional authority to establish compensation and terms of employment for county employees. The court found that home rule powers reserved to local government under the Cal Const, art XI, section 1, subd (b) were violated by the amended version of section 1299 of the Code of Civil Procedure by affecting the legislative function to set employee salaries and by establishing a unanimity requirement for the governing body to reject the arbitration panel's decision. Additionally, the court found the amended version of section 1299 violated Cal Const, art XI, section 11, subd (a) by impermissibly delegating to a private body - the arbitration panel - the power to interfere with county money (by potentially requiring the county to pay higher salaries than it chose) and to perform municipal functions determining compensation for county employees.

*** Arbitration - Individual Arbitration Agreements ***

• CA - Class arbitration waiver was contrary to public policy.

• CA – Class arbitration waiver was unconscionable as to meal and rest period claims.

*** Arbitration - Collective Bargaining Agreements ***

• NE – Court recognizes public policy as grounds for vacating arbitration awards in Nebraska.

• IL – Court recognizes a public policy in favor of the safety of school children.

• WA –Employer sanctioned for seeking to enjoin grievance arbitration.

• 9th - Trial court lacked subject matter jurisdiction under LMRA.

• 7th – Court confirmed award finding lack of just cause.

• OH - Call-in triggered call-in pay for SWAT team under CBA.

• 1st - Arbitrator's remedy of reinstatement was not affected by wrongful discharge statute.

*** Arbitration - Individual Arbitration Agreements ***

CA - Class arbitration waiver was contrary to public policy.

Sanchez v. Western Pizza (California Ct App 03/17/2009)
http://www.courtinfo.ca.gov/opinions/documents/B203961.PDF

Sanchez sued the employer in a putative class action, asserting various claims under California wage-and-hour laws.  The employer moved to compel arbitration, but the trial court denied the motion.  The court affirmed, concluding that 1) the enforceability of the employer’s arbitration agreement was a matter for the court (not the arbitrator) to decide; 2) the arbitration agreement’s class arbitration waiver was contrary to public policy and hence unenforceable; and 3) the arbitration agreement as a whole was unconscionable.

CA – Class arbitration waiver was unconscionable as to meal and rest period claims.

Franco v. Athens Disposal (California Ct App 03/10/2009)
http://www.courtinfo.ca.gov/opinions/documents/B203317.PDF

Franco sued the employer in a class action, asserting claims for violation of several provisions of state wage-and-hour laws.  The employer petitioned to compel arbitration, which was granted by the trial court.  The court reversed.

The employer’s arbitration agreement contained a provision waiving class-wide arbitration and precluding employees from acting in “a private attorney general capacity.”  The court concluded that the arbitration provision was “unconscionable with respect to the alleged violations of the meal and rest period laws given ‘the modest size of the potential individual recovery, the potential for retaliation against members of the class, [and] the fact that absent members of the class may be ill informed about their rights.’”  The court further concluded, “because the arbitration agreement prevents plaintiff from acting as private attorney general, it conflicts with the Labor Code Private Attorneys General Act of 2004...”  With respect to the first conclusion, the court relied primarily upon application of the analysis set forth in Gentry v. Superior Court (2007) 42 Cal.4th 443. 

*** Arbitration - Collective Bargaining Agreements ***

NE – Court recognizes public policy as grounds for vacating arbitration awards in Nebraska.

State v. Henderson (Nebraska 02/27/2009)
http://court.nol.org/opinions/2009/february/feb27/s07-010.pdf

Henderson was discharged from his job as a state police officer after it was learned he belonged to a group related to the Ku Klux Klan.   Grievance arbitration resulted in his reinstatement .  The trial court reversed on the basis that the arbitration award violated public policy.  The court affirmed.

The court had not previously addressed whether Nebraska law allows an arbitration award to be vacated on public policy grounds.  Taking the opportunity to address that issue here, the court held “a court may refuse to enforce an arbitration award that is contrary to a public policy that is explicit, well defined, and dominant.”  The court explained, “such a public policy must be ascertained by reference to laws and legal precedents, not from general considerations of supposed public interests, but the arbitration award need not itself violate positive law to be unenforceable as against public policy.”

The court concluded that “an explicit, well-defined, and dominant public policy of Nebraska” is that “the laws of Nebraska should be enforced without racial or religious discrimination.”  The court also concluded that “more importantly, this public policy incorporates, and depends upon, the public’s reasonable perception that the laws are being enforced without discrimination.”  The court determined ultimately that this public policy was violated by the arbitration award reinstating Henderson.

IL – Court recognizes a public policy in favor of the safety of school children.

Central Community School v. IELRB (Illinois Ct App 02/27/2009)
http://www.lawmemo.com/docs/il/community.pdf

The employer discharged a custodian for losing his temper in front of students on several occasions.  An arbitrator ordered the employee reinstated, but the employer refused to comply with that.  The Illinois Educational Labor Relations Board (IELRB) found the employer in violation of the Illinois Educational Labor Relations Act (IELRA) based on its refusal to comply with the arbitration award.  The court reversed the IELRB’s order, with directions to remand the matter for reconsideration by the arbitrator.  The court noted, “we find support for the proposition there is a general policy in favor of the safety of school children in section 24-24 of the School Code.”  The court determined that this public policy provided a basis sufficient to yield an arbitration award unenforceable.  The court remanded for consideration by the arbitrator of certain conduct relevant to this public policy.

WA –Employer sanctioned for seeking to enjoin grievance arbitration.

Highland School Dist v. Racy (Washington Ct App 03/17/2009)
http://www.courts.wa.gov/opinions/pdf/270157.opn.doc.pdf

The public employer appealed the trial court’s order imposing sanctions, based on the trial court’s determination that the employer’s action was frivolous.  The court affirmed.   The employer had filed this action seeking to enjoin arbitration of grievances relating to non-renewal of two teachers’ coaching contracts.   The trial court concluded that the relief sought by the employer was precluded by Mount Adams School District v. Cook, 81 P3d 111 (2003).  The court agreed with the trial court’s conclusion, and found that the trial court didn’t abuse its discretion in sanctioning the employer.

9th - Trial court lacked subject matter jurisdiction under LMRA.

Int'l Union Of Engineers v. County of Plumas (9th Cir 03/20/2009)
http://caselaw.lp.findlaw.com/data2/circs/9th/0716001p.pdf

The union sued to compel arbitration in state court. The employer removed the case to federal court. The trial court ordered arbitration. The 9th Circuit reversed. The court stated that the employer could raise jurisdictional challenges at any time. Because the county was not an employer under the Labor Management Relations Act (LMRA) and the claims did not arise under the Constitution or federal law, the court concluded that the trial court lacked subject matter jurisdiction.

7th – Court confirmed award finding lack of just cause.

Clear Channel v Int'l Unions of Painters (7th Cir 03/12/2009)
http://www.lawmemo.com/docs/7/clear.pdf

The employer appealed the trial court’s order that confirmed a grievance arbitration award reinstating an employee.  The 7th Circuit affirmed.  The employer discharged the employee for committing a serious safety violation, but the arbitrator concluded that the employer lacked “just cause” to support the discharge.  The arbitrator found that the employee committed the violation, but reduced the penalty to a six-month suspension without pay. 

The court concluded that the arbitrator’s decision “drew its essence” from the parties’ collective bargaining agreement.  The court explained that the arbitrator’s decision “was tethered to the language of the agreement, ...set forth an arguable construction of the agreement, and...applied that interpretation to the facts that the parties submitted.”  The court observed that the employer “relies on a line of cases from other circuits holding that once an arbitrator finds that a violation has occurred for which the contract language authorizes discipline up to and including termination at the employer’s discretion, the arbitrator necessarily may not review the propriety of the employer’s decision to fire the offending employee rather than imposing lesser discipline.”  The court also observed, however, that “this circuit has never embraced that line of authority.”  The court noted that this was a case where the arbitrator had found just cause to be lacking, not a case where the arbitrator had found just cause but decided upon a lesser form of discipline.

OH - Call-in triggered call-in pay for SWAT team under CBA.

City of Cleveland v. Cleveland Police Assoc (Ohio Ct App 03/12/2009)
http://www.sconet.state.oh.us/rod/docs/pdf/8/2009/2009-ohio-1087.pdf

The employer appealed the trial court's order confirming an arbitration award for call-in pay. The Ohio Court of Appeals affirmed. Special Weapons and Tactical Unit (SWAT) employees were called in to respond to an emergency which was cancelled within ten minutes. The collective bargaining agreement's (CBA) provision for call-in pay required four hours of pay at one and one-half the regular rate of pay. The court found that the record was clear that the arbitrator applied the clear terms of the CBA to the facts in this case. The court noted that if the employer did not want the call-in to trigger the call-in pay, the employer must negotiate new terms in the CBA.

1st - Arbitrator's remedy of reinstatement was not affected by wrongful discharge statute.

Asociacion de Empleados v. Union Internacional (1st Cir 03/06/2009)
http://laws.findlaw.com/1st/072636.html

The trial court vacated that portion of an arbitration award which awarded five discharged employees back pay and reinstatement. The 1st Circuit affirmed. The employees were discharged for erasing records of loans made to themselves. The arbitrator found the employees were unjustly discharged. The issue on appeal was whether Puerto Rico Law 80, which limited damages in wrongful discharge cases to severance pay and attorney fees only, applied to a collective bargaining agreement (CBA) which explicitly provided for reinstatement. The court had previously ruled that when an arbitrator found a violation of the CBA which was independent of Law 80, reinstatement was appropriate under the CBA. Since it was not clear whether the arbitrator was applying the CBA or Law 80 in this case, the court concluded it was constrained from overturning the remedy.

*** Arbitration - Individual Arbitration Agreements ***

• IN - NASD arbitration panel didn’t exceed its authority when it awarded vacation pay, unreimbursed business expenses, and attorney fees.

• 8th – Trial court should have severed provisions of arbitration agreement that were unlawful under ERISA, and then compelled arbitration.

*** Arbitration - Collective Bargaining Agreements ***

• US - Supreme Court will decide Railway arbitration issue.

• WA – Grievances could be brought under expired CBA, where successor CBA contained retroactivity provision.

• CA – School district’s decision not to re-hire probationary teacher wasn’t subject to grievance arbitration.

• MI - Severance of Act 312 mixed bargaining unit upheld.

*** Arbitration - Individual Arbitration Agreements ***

IN - NASD arbitration panel didn’t exceed its authority when it awarded vacation pay, unreimbursed business expenses, and attorney fees.

Fiducial Investment v. Patton (Indiana Ct App 01/29/2009)
http://www.in.gov/judiciary/opinions/pdf/01290902ewn.pdf

The employer appealed from the trial court’s order confirming an arbitration award rendered in Patton’s favor.  The court affirmed, concluding that the National Association of Securities Dealers (NASD) arbitration panel didn’t exceed its authority when it awarded Patton vacation pay, unreimbursed business expenses, and attorney fees.

8th – Trial court should have severed provisions of arbitration agreement that were unlawful under ERISA, and then compelled arbitration.

Franke v. Poly-America (8th Cir 02/05/2009)
http://www.lawmemo.com/docs/8/james.pdf

Franke sued his employer’s health plan under the Employee Retirement Income Security Act (ERISA), challenging the plan’s denial of benefits.  The trial court denied the plan’s motion to compel arbitration.  The 8th Circuit reversed.  The plan’s arbitration agreement contained provisions that were admittedly in violation of ERISA.  The trial court declined to enforce the arbitration agreement, based on those provisions.  The court concluded that the trial court erred by not severing the offending provisions and then compelling arbitration.

*** Arbitration - Collective Bargaining Agreements ***

US - Supreme Court will decide Railway arbitration issue.

Union Pacific v. Brhd of Locomotive Engineers (cert granted 02/23/2009)
Decision below: Brhd of Locomotive Engineers v. Union Pacific (7th Cir 04/09/2008 http://www.lawmemo.com/docs/7/unionpacific.pdf

Five railway employees filed claims through their union, contesting discipline imposed by the employer. Rather than resolving the dispute over the propriety of the discipline, the National Railroad Adjustment Board concluded that the Union failed to submit conclusive evidence that the parties had held a conference to attempt to resolve the dispute - a procedural prerequisite to arbitration.  As a result, the Board determined that it was required to dismiss the claim for lack of jurisdiction. The district court agreed. The 7th Circuit reversed. Although the 7th Circuit agreed with the district court that it has always been clear that parties must conference and submit evidence of that fact, it has not been clear when and how that evidence must be presented. The court found that the Board denied the Union due process by requiring the evidence to be presented in the “on-property” record, a requirement not clearly enunciated in the statutes, regulations, or the parties’ collective bargaining agreement.  Consequently, the 7th Circuit reversed. The US Supreme Court granted certiorari on February 23, 2009 to review the 7th Circuit judgment.

WA – Grievances could be brought under expired CBA, where successor CBA contained retroactivity provision.

Kitsap County Sheriff's v. Kitsap County (Washington Ct App 02/18/2009)
http://www.courts.wa.gov/opinions/pdf/37173-1.09.doc.pdf

The police officers’ union appealed the trial court’s decision that grievances could not be brought under collective bargaining agreements (CBAs) the trial court found had lapsed.  The court reversed.  The trial court relied upon Maple Valley Professional Fire Fighters Local 3062 v. King County Fire Protection District No. 43, 146 P.3d 1247 (2006) to conclude that a grievance can not be brought under an expired CBA.    The court determined that the trial court erred in relying upon Maple Valley, because (in contrast to the present case) there was in Maple Valley no retroactive CBA replacing the expired CBA.

CA – School district’s decision not to re-hire probationary teacher wasn’t subject to grievance arbitration.

Sunnyvale Unified School v. Jacobs (California Ct App 02/18/2009)
http://www.courtinfo.ca.gov/opinions/documents/H031721.PDF

Jacobs, a probationary public school teacher, was not “re-elected” for his second year of teaching.  His union filed a grievance, and the matter proceeded to arbitration.  An arbitrator found that Jacobs’ non-rehire constituted retaliation in violation of the parties’ collective bargaining agreement and the Educational Employment Relations Act (EERA), and ordered reinstatement.  The trial court denied the union’s petition for confirmation of the arbitration award.  The court affirmed, concluding that, pursuant to Board of Education v. Round Valley Teachers Assn. (1996) 13 Cal.4th 269, the school district’s non-rehire decision was not subject to grievance arbitration.  The court reasoned, “[w]here, as here, the decision is alleged to be a violation of the [EERA] ... the remedy lies with the Public Employee Relations Board (PERB).”

MI - Severance of Act 312 mixed bargaining unit upheld.

Oakland County v. Oakland County Sheriffs (Michigan Ct App 02//03/2009)
Majority: http://www.lawmemo.com/docs/mi/oakland.pdf
Dissent: http://www.lawmemo.com/docs/mi/oakland1.pdf

The union petitioned for Act 312 compulsory arbitration of police labor disputes. The Michigan Employment Relations Commission (MERC) severed the union's existing bargaining unit into two units, one eligible for Act 312 arbitration (Patrol Services Division) and one not eligible (Corrections Division). The Michigan Court of Appeal affirmed. MERC broke from past practice of avoiding severance of preexisting mixed units. The court stated that MERC could break from past precedent when rationally explained. The court noted that the employer will be able to bargain separate agreements with the two units without having issues that should properly be limited to one group impinging on negotiations involving the other. The court found it appropriate to direct the severing of the existing unit in order to foster more productive bargaining and to thereby effectuate the purposes of the Act. The DISSENT argued that an evidentiary hearing was required to determine whether the correction division employees were eligible for binding arbitration under Act 312.

*** Arbitration - Individual Arbitration Agreements ***

• 6th – “Manifest disregard of the law” was not a basis for modification of arbitration award.

• 3rd – Plaintiffs weren’t obligated under FAA to arbitrate their claims, even though co-plaintiffs were.

• DC - Employee failed to exhaust elected remedy for wrongful discharge.

*** Arbitration - Collective Bargaining Agreements ***

• WA - Arbitrator exceeded his authority under last chance agreement.

• NY - Arbitrator exceeded his authority by finding public employee guilty of assault but reducing his penalty from discharge to reinstatement without back pay.

• DC - Probationary employee was not properly discharged during her probationary period.

• CA - "Make whole" award remanded to arbitrator for resolution.

• MA - Arbitrator's award of back wages stemming from concessions during financial crisis upheld.

• DC - Arbitration award was unambiguous.

• 9th – Complete preemption doctrine doesn’t apply to Railway Labor Act.

• 5th - Trial court required to defer to SBA decision under RLA.

*** Arbitration - Individual Arbitration Agreements ***

6th – “Manifest disregard of the law” was not a basis for modification of arbitration award.

Grain v. Trinity Health (6th Cir 12/23/2008)
http://caselaw.lp.findlaw.com/data2/circs/6th/081410p.pdf

Grain sued his former employer, asserting claims for race discrimination under 42 USC Section 1981.  The trial court ordered the parties to arbitration, where Grain prevailed and was awarded substantial damages.  He moved for confirmation of the award as to liability, but sought modification as to damages and attorney fees.  The trial court confirmed the award in total.  The 6th Circuit affirmed. 

9 USC Section 11 of the Federal Arbitration Act (FAA) provides various bases for modification of arbitration awards.  The court rejected Grain’s attempt to characterize the arbitrator’s damages award as “an evident material miscalculation of figures” meriting modification under Section 11.  The court applied the 4th Circuit’s definition of “evident material miscalculation of figures” as a “mathematical error appear[ing] on the face of the award” and dismissed Grain’s attempt as an argument on the merits.  Similarly, the court rejected Grain’s attempt to characterize purported error in the arbitrator’s attorney fee award as an ‘imperfect[ion] in matter of form not affecting the merits of the controversy” under Section 11.

More significantly, the court rejected Grain’s attempt to modify the award on the basis that it arose from a “manifest disregard of the law.”  The court reasoned, “[w]e have used the ‘manifest disregard’ standard only to vacate arbitration awards, not to modify them.”  The court noted that it previously held, in NCR Corp. v. Sac.-Co., Inc., 43 F3d 1076 (6th Cir 1995), that “[a] court’s power to modify an arbitration award is confined to the grounds specified in [FAA] Section 11.”    The court further noted that the grounds specified in Section 11 do not include “manifest disregard of the law.”  The court clarified that NCR remains the law of the 6th Circuit, and rejected Grain’s argument to the contrary.

3rd – Plaintiffs weren’t obligated under FAA to arbitrate their claims, even though co-plaintiffs were.

Mendez v. Puerto Rican International (3rd Cir 01/26/2009)
http://caselaw.lp.findlaw.com/data2/circs/3rd/074053p.pdf

Mendez and almost fifty co-workers sued the employer, asserting what was described in the opinion as “employment discrimination and retaliation” claims.  The employer moved to compel arbitration as to all employees, based on written arbitration agreements between the employer and eight of them.  The trial court granted the motion with respect to those eight, but denied the motion with respect to the rest.  The 3rd Circuit affirmed.

The court concluded that Section 3 of the Federal Arbitration Act (FAA) “was not intended to mandate curtailment of the litigation rights of anyone who has not agreed to arbitrate any of the issues before the court.”  The court observed that, under a contrary approach, Section 3 would impose “a mandatory stay on a party’s right to litigate a claim it is free to litigate depending on the fortuity of whether there happens to be other parties to the suit who have agreed to arbitrate a different claim, whether it be related or unrelated.”  The court noted that support for its approach can be found in decisions rendered in the 2nd, 6th, 7th, and 10th Circuits.  The court also noted that the 5th Circuit has adopted a contrary approach.

DC - Employee failed to exhaust elected remedy for wrongful discharge.

Johnson v. District of Columbia (DC Cir 12/23/2008)
http://caselaw.lp.findlaw.com/data2/circs/dc/077121p.pdf

Johnson sued the employer for wrongful discharge and denial of due process in violation of the Fifth Amendment to the United States Constitution. The trial court granted the employer's motion to dismiss. The DC Circuit affirmed. Johnson initiated a grievance under her collective bargaining agreement (CBA), but the matter was placed "on hold."  Two years later Johnson filed this action, arguing it was futile to pursue arbitration or appeal to the District Public Employee Relations Board (PERB).  The court rejected that argument.  The court found that it was not futile to seek a remedy from the PERB, where the PERB had authority to determine whether the failure to arbitrate under a CBA was an unfair labor practice and to fashion a remedy. The court concluded that Johnson failed to exhaust the remedy she elected (the CBA grievance procedure) - which became her exclusive remedy.

*** Arbitration - Collective Bargaining Agreements ***

WA - Arbitrator exceeded his authority under last chance agreement.

City of Yakima v. Yakima Police Assoc (Washington Ct App 01/08/2009)
http://www.courts.wa.gov/opinions/pdf/267997.opn.doc.pdf

The trial court vacated an arbitration award ordering reinstatement of a discharged employee. The Washington Court of Appeals affirmed. The issue on appeal was whether the arbitrator exceeded his authority under the last chance agreement (LCA), which limited the employee's right to grieve/appeal the employer's determination to the issue that he did not comply with the terms and conditions of the LCA. The court stated that the arbitrator went beyond the agreement and tried to determine whether the discharge was justified, and, in doing so, the arbitrator exceeded his authority.

NY - Arbitrator exceeded his authority by finding public employee guilty of assault but reducing his penalty from discharge to reinstatement without back pay.

New York City Transit v. Transport Workers (New York App Div 12/30/2008)
http://www.courts.state.ny.us/reporter/3dseries/2008/2008_10631.htm

A transit authority employee was discharged for allegedly assaulting a customer.   An arbitrator determined that the employee had committed the assault, but reduced the penalty to reinstatement without back pay.  The employer commenced proceedings pursuant to CPLR article 75, seeking to vacate the arbitrator’s reduction in penalty.  The trial court reinstated the original penalty of discharge.  The court affirmed, concluding that  the arbitrator exceeded his authority in reducing the penalty. 

DC - Probationary employee was not properly discharged during her probationary period.

USPS v. American Postal Workers (DC Cir 01/23/2009)
http://caselaw.lp.findlaw.com/data2/circs/dc/085056p.pdf

The trial court vacated an arbitration award reinstating an employee. The DC Circuit reversed. The arbitrator found that the probationary employee did not receive proper notice of separation, as required by the United States Postal Service (USPS) employee and labor relations manual (ELM), during her probationary period. The court held that the arbitrator's decision drew its essence from the parties' collective bargaining agreement (CBA). The court found that the arbitrator properly determined whether the employee was discharged during her probationary period.

CA - "Make whole" award remanded to arbitrator for resolution.

Mossman v. City of Oakdale (California Ct App 01/14/2009)
http://www.courtinfo.ca.gov/opinions/documents/F054983.PDF

The employer appealed the trial court's order denying the employer's motion to vacate an arbitration award favorable to the employee. The California Court of Appeal reversed. The issue on appeal was whether the arbitrator's award was enforceable where the arbitrator concluded that the employer violated its own rules regarding seniority bumping rights and awarded the employee be made whole. The court stated that the award contemplated, at the very least, reinstatement of the employee to one of the positions that had been vacant at the time she lost her position due to budget cuts and the payment of lost wages and other lost benefits attributable to the employer's conduct. The court agreed that the award as written could not be enforced and remanded to the trial court with instructions to remand to the original arbitrator for resolution of the make whole remedy.

MA - Arbitrator's award of back wages stemming from concessions during financial crisis upheld.

City of Lynn v. Lynn Police Assoc (Massachusetts Ct App 01/09/2009)
http://www.lawmemo.com/docs/ma/lynn.htm

The trial court confirmed an arbitrator's award requiring the employer to pay certain back wages stemming from a 1985 bailout statute of the employer and a 2004 financial emergency resulting in a memorandum of understanding (MOU). The Massachusetts Court of Appeals affirmed. The court concluded that the bailout statutory language did not provide a defense to the union's claim for back wages under the MOU and that statutory prohibitions on payment were no bar to an award of damages for breach of contract.

DC - Arbitration award was unambiguous.

American Postal Workers v. USPS (DC Cir 12/23/2008)
http://caselaw.lp.findlaw.com/data2/circs/dc/075316p.pdf

The union sued the employer, seeking to compel enforcement of an arbitrator's award. The trial court granted the employer's motion for summary judgment. The DC Circuit reversed. The court found that the arbitrator's discussion amply supported the award’s finding that the collective bargaining agreement would be violated if the disputed work were excluded from the bargaining unit. The court remanded to the trial court, for a determination whether that finding was enforceable as to certain issues relating to the transfer of duties to the bargaining unit.

9th – Complete preemption doctrine doesn’t apply to Railway Labor Act.

Moore-Thomas v. Alaska Airlines (9th Cir 01/27/2009)
http://www.lawmemo.com/docs/9/moore.pdf

Moore sued the employer/airline in a class action in state court, asserting a state statutory claim for failure to timely pay wages upon termination of employment.  The employer removed the case to federal court, whether it was dismissed on the basis that the claim was preempted by the Railway Labor Act (RLA).  The 9th Circuit reversed.

The trial court determined that the RLA completely preempted Moore’s action because resolution of her claim required interpretation of the parties’ collective bargaining agreement (CBA).  The court concluded that was error, and held that the complete preemption doctrine does not apply to the RLA.  The court agreed with the 2nd Circuit that the United States Supreme Court’s decision in Beneficial National Bank v. Anderson, 539 US 1 (2003) clarified that complete preemption does not apply to the RLA.  The court noted that there has been conflicting precedent on this issue in the 9th Circuit, and clarified “to the extent this court’s prior decision in Grote v. Trans World Airlines, Inc., 905 F.2d 1307 (9th Cir 1990), ruled that the RLA is subject to complete pre-emption, that holding is clearly irreconcilable with Beneficial National Bank, and is effectively overruled.”

5th - Trial court required to defer to SBA decision under RLA.

Continental Airlines v. Air Line Pilots Assoc (5th Cir 01/13/2009)
http://caselaw.lp.findlaw.com/data2/circs/5th/0720835cv0p.pdf

McWhirter, a member of the Air Line Pilots Association (ALPA), refused to take a no-notice alcohol test. ALPA appealed the trial court's reversal of a reinstatement order of the System Board of Adjustment (SBA). The 5th Circuit reversed the trial court. ALPA argued that the trial court failed to defer to the SBA decision as required by the Railway Labor Act (RLA). The court found that the SBA's decision that considered McWhirter's non-medical excuse for refusing to be tested drew its essence from the parties agreement and that the SBA had authority to order reinstatement.

*** Arbitration - Individual Arbitration Agreements ***

• 6th – “Manifest disregard of the law” didn’t provide a basis for modification of arbitration award.

• AR - FAA applied rather than state arbitration law which excluded torts and employment disputes (5-3).

• 1st - Employer’s arbitration agreement was enforceable.

• OH – Employer’s arbitration agreement was not unconscionable.

• TX – Securities employee was obligated under Form U-4 to arbitrate common law claim against employer.

• 4th – Language of arbitration agreement was sufficient to authorize trial court to enter judgment confirming arbitration award.

• TX – Trial court should have compelled arbitration, based on application of the doctrine of equitable estoppel.

• 2nd - Section 7 of FAA did not authorize pre-hearing discovery from non-parties.

*** Arbitration - Collective Bargaining Agreements ***

• 9th - Union had standing to arbitrate reduced retirement benefits without consent of retirees.

• MN – Employee’s state law claims were preempted by Section 301 of the Labor Management Relations Act.

• 6th - Six month time limit to compel arbitration began with unequivocal refusal to arbitrate rather than rejection of formal request.

• RI – Union’s appeal of trial court’s order vacating grievance arbitration award was moot.

• DC - Arbitration award was unambiguous.

*** Arbitration - Individual Arbitration Agreements ***

6th – “Manifest disregard of the law” didn’t provide a basis for modification of arbitration award.

Grain v. Trinity Health (6th Cir 12/23/2008)
http://caselaw.lp.findlaw.com/data2/circs/6th/081410p.pdf

Grain sued his former employer, asserting claims for race discrimination under 42 USC Section 1981.  The trial court ordered the parties to arbitration, where Grain prevailed and was awarded substantial damages.  He moved for confirmation of the award as to liability, but sought modification as to damages and attorney fees.  The trial court confirmed the award in total.  The 6th Circuit affirmed. 

9 USC Section 11 of the Federal Arbitration Act (FAA) provides various bases for modification of arbitration awards.  The court rejected Grain’s attempt to characterize the arbitrator’s damages award as “an evident material miscalculation of figures” meriting modification under Section 11.  The court applied the 4th Circuit’s definition of “evident material miscalculation of figures” as a “mathematical error appear[ing] on the face of the award” and dismissed Grain’s attempt as an argument on the merits.  Similarly, the court rejected Grain’s attempt to characterize purported error in the arbitrator’s attorney fee award as an ‘imperfect[ion] in matter of form not affecting the merits of the controversy” under Section 11.

More significantly, the court rejected Grain’s attempt to modify the award on the basis that it arose from a “manifest disregard of the law.”  The court reasoned, “[w]e have used the ‘manifest disregard’ standard only to vacate arbitration awards, not to modify them.”  The court noted that it previously held, in NCR Corp. v. Sac.-Co., Inc., 43 F3d 1076 (6th Cir 1995), that “[a] court’s power to modify an arbitration award is confined to the grounds specified in [FAA] Section 11.”    The court further noted that the grounds specified in Section 11 do not include “manifest disregard of the law.”  The court clarified that NCR remains the law of the 6th Circuit, and rejected Grain’s argument to the contrary.

AR - FAA applied rather than state arbitration law which excluded torts and employment disputes (5-3).

Terminix v. Trivitt (Arkansas Ct App 12/10/2008)
http://www.lawmemo.com/docs/ar/trivitt.pdf

Trivitt sued the employer for defamation and outrage. The trial court denied the employer's motion to compel arbitration. The Arkansas Court of Appeals reversed. Trivitt was discharged for allegedly stealing money from the employer. The employment agreement contained provisions to arbitrate any and all disputes to the fullest extent provided by law and to construe the agreement in accordance with the Federal Arbitration Act (FAA). Trivitt argued that the Arkansas Uniform Arbitration Act (AUAA) applied, which excluded tort matters and employer-employee disputes. The majority concluded that the FAA was controlling because the parties chose it and there was a connection to interstate commerce. The DISSENT argued that state law unequivocally declared that torts and employment disputes were not subject to arbitration and that publication of defamatory statements did not meet the FAA requirement for interstate commerce.

1st - Employer’s arbitration agreement was enforceable.

Pelliter v. Yellow Transportation (1st Cir 12/10/2008)
http://laws.findlaw.com/1st/072627.html

Pelliter sued the employer, asserting state and federal claims for age discrimination, gender discrimination, and retaliation.  The trial court granted the employer’s motion to compel arbitration (via motion for summary judgment).  The 1st Circuit affirmed, concluding that the employer’s arbitration agreement was enforceable. The court rejected Pelliter's argument that a merger clause in his employment application excluded consideration of a separate arbitration agreement.

OH – Employer’s arbitration agreement was not unconscionable.

Mattox v. Dillard's (Ohio Ct App 12/11/2008)
http://www.sconet.state.oh.us/rod/docs/pdf/8/2008/2008-ohio-6488.pdf

Mattox sued the employer, asserting state law claims for wrongful discharge in violation of public policy and race discrimination.  The trial court granted the employer’s motion to compel arbitration.  The court affirmed, rejecting Mattox’s argument that the employer’s arbitration agreement was unconscionable.

TX – Securities employee was obligated under Form U-4 to arbitrate common law claim against employer.

In re Stanford Group (Texas Ct App 12/09/2008)
http://www.lawmemo.com/docs/tx/stanford.htm

A financial adviser sued his employer, asserting what was purported to be a claim for violation of the Texas Labor Code.  The employer moved to compel arbitration pursuant to a Uniform Application for Securities Industry Registration or Transfer (Form U-4), which is used to register securities professionals with various securities exchanges and organizations.  The trial court denied the employer’s motion, so the employer (among other things) petitioned for writ of mandamus.  The court granted the writ.  The court concluded that the employee’s claim constituted a common law claim for wrongful discharge in violation of public policy, and was thus not exempt from the scope of Form U-4’s arbitration provision as a statutory employment claim under National Association of Securities Dealers (NASD) Rule 13201.

4th – Language of arbitration agreement was sufficient to authorize trial court to enter judgment confirming arbitration award.

Qorvis Communications v. Wilson (4th Cir 12/03/2008)
http://caselaw.lp.findlaw.com/data2/circs/4th/071967p.pdf

Wilson appealed the trial court’s judgment confirming an arbitration award rendered in the employer’s favor on its claims for violation of Wilson’s employment agreement.  The 4th Circuit affirmed.  Wilson’s principal argument was that the trial court lacked  authority under the Federal Arbitration Act (FAA) to confirm the award through entry of judgment.  The court rejected that argument.  The FAA authorizes a court to enter judgment on an arbitration award “[i]f the parties in the agreement have agreed that a judgment of the court shall be entered upon the award.”  9 USC Section 9.  The court noted that no “magic language” is required to manifest such an agreement, and concluded that the language of the agreement was sufficient to satisfy Section 9.

TX – Trial court should have compelled arbitration, based on application of the doctrine of equitable estoppel.

In re Polymerica (Texas Ct App 11/25/2008)
http://www.lawmemo.com/docs/tx/polymerica.htm

Angela Soltero sued the employer, asserting state law claims for sexual harassment and retaliation.  The trial court denied the employer’s motion to compel arbitration, so the employer petitioned for writ of mandamus.  The court granted the writ in part, concluding that the trial court should have compelled arbitration based on the doctrine of equitable estoppel.  The court noted, however, that Soltero was obligated to arbitrate only those claims that arose while the arbitration agreements at issue were in effect.

2nd - Section 7 of FAA did not authorize pre-hearing discovery from non-parties.

Life Receivables v. Syndicate (2nd Cir 11/25/2008)
http://caselaw.lp.findlaw.com/data2/circs/2nd/071197p.pdf

In a non-employment law case, the 2nd Circuit held that section 7 of the Federal Arbitration Act, 9 USC Section 7, did not authorize an arbitrator to compel pre-hearing discovery from non-parties to the arbitration. Accord, 3rd Circuit; contra, 8th Circuit and 4th Circuit.

*** Arbitration - Collective Bargaining Agreements ***

9th - Union had standing to arbitrate reduced retirement benefits without consent of retirees.

IBEW v. Citizens Telecommunications (9th Cir 12/05/2008)
http://caselaw.lp.findlaw.com/data2/circs/9th/0616189p.pdf

The union sought an order compelling the employer to arbitrate the union's claim that the employer unilaterally reduced retirement benefits for retired employees. The trial court granted the union's motion to compel arbitration under the terms of the collective bargaining agreement (CBA). The 9th Circuit affirmed.

The employer argued that the union lacked standing to represent the interests of former employees who were no longer members of the union without the consent of the retired employees, which was the opinion of the 5th, 6th, and 7th Circuits. The court stated that the employer's argument ignored the fact that (1) reductions in retiree benefits may also affect current employees who were undisputedly still represented by the union under an extant CBA, and (2) it was based on unsound assumptions about the preclusive effect of arbitration involving retiree benefits. Noting that retirement benefits of active workers were part and parcel of their overall compensation, the court concluded that the union sought an arbitration order, at least in part, on behalf of current employees. While the court could not definitively state that there were no circumstances in which a union's arbitration would have some preclusive effect on a subsequent suit by a former member no longer represented by the union, the result in Meza v. Gen. Battery Corp., 908 F2d 1262, 1273 (5th Cir 1990) (no preclusion) suggested that such preclusion would occur rarely, if at all; the court concluded it seemed extremely unlikely that a court would apply claim preclusion against  an individual retiree based on an arbitration to which the retiree was not a party, nor represented by a party. The court opined that the fact the employer may be exposed to allegedly duplicative proceedings was a result of its own bargaining.

MN – Employee’s state law claims were preempted by Section 301 of the Labor Management Relations Act.

Karnewie-Tuah v. Frazier (Minnesota Ct App 12/02/2008)
http://www.lawlibrary.state.mn.us/archive/ctappub/0812/opa071869-1202.pdf

Karnewie-Tuah sued the employer, asserting state law claims for tortious interference with contractual relations and defamation.  The trial court dismissed, based on its determination that the claims were preempted by Section 301 of the Labor Management Relations Act (LMRA).  The court affirmed, concluding that 1) an employee’s state law claim for tortious interference with contractual relations against her supervisor is preempted by Section 301 when the contract at issue is a collective bargaining agreement (CBA); and 2) Section 301 preempts an employee’s state law claim for defamation against her supervisor, when the statements at issue are made in the course of a disciplinary or grievance arbitration procedure established by a CBA.

6th - Six month time limit to compel arbitration began with unequivocal refusal to arbitrate rather than rejection of formal request.

Warehouse Union v. Kroger (6th Cir 12/23/2008)
http://caselaw.lp.findlaw.com/data2/circs/6th/083267p.pdf

The union sought to compel Kroger's participation in an arbitration pursuant to an arbitration agreement with another company which leased the warehouse space from Kroger and hired former Kroger warehouse workers. The trial court granted Kroger's motion for summary judgment. The 6th Circuit affirmed. The court focused on Kroger's letter of April 24, 2006, which contained an unequivocal refusal to arbitrate, rather than a later rejection of a union's formal request. The court agreed with the trial court that the complaint was filed outside the applicable six month statute of limitations.

RI – Union’s appeal of trial court’s order vacating grievance arbitration award was moot.

City of Cranston v. Rhode Island Laborers' (Rhode Island 12/08/2008)
http://www.lawmemo.com/docs/ri/cranston.pdf

The union appealed the trial court’s order vacating a grievance arbitration award rendered in the union’s favor.  The dispute arose from the public employer’s alleged violation of a job security clause in the parties’ collective bargaining agreement (CBA).  The court dismissed the appeal as moot, since union members experienced no job losses during the term of the job security clause and that clause had already expired.  The court reasoned that “the parties no longer have a continuing stake in the outcome.  As it stands today, the case is presented to us in the form of a hypothetical question that may or may not recur.”

DC - Arbitration award was unambiguous.

American Postal Workers v. USPS (DC Cir 12/23/2008)
http://caselaw.lp.findlaw.com/data2/circs/dc/075316p.pdf

The union sued the employer, seeking to compel enforcement of an arbitrator's award. The trial court granted the employer's motion for summary judgment. The DC Circuit reversed. The court found that the arbitrator's discussion amply supported the award’s finding that the collective bargaining agreement (CBA) would be violated if the disputed work were excluded from the bargaining unit. The court remanded to the trial court, for a determination whether that finding was enforceable as to certain issues relating to the transfer of duties to the bargaining unit.

*** Arbitration - Individual Arbitration Agreements ***

• TX - Sabine Pilot claim was not excepted from NASD arbitration as employment discrimination claim.

*** Arbitration - Collective Bargaining Agreements ***

• US - Oral argument on whether CBA waives employee's right to sue for violation of anti-discrimination statutes.

• 5th – NRAB acted within the scope of its jurisdiction when it ordered railway/employer to produce documents.

*** 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)
http://www.supreme.courts.state.tx.us/historical/2008/nov/080192.pdf

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.

14 Penn Plaza LLC v. Pyett (oral argument 12/01/2008)
Decision below: Pyett v. Pennsylvania Building Company (2nd Cir 08/01/2007): http://caselaw.findlaw.com/data2/circs/2nd/063047p.pdf
Details, briefs: http://www.lawmemo.com/supreme/case/Pyett

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)
http://caselaw.lp.findlaw.com/data2/circs/5th/0711251cv0p.pdf

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.

*** Arbitration - Individual Arbitration Agreements ***

• 2nd - Sarbanes-Oxley Act whistleblower claims are subject to arbitration.

• 11th – Employer’s promise to engage in arbitration wasn’t illusory, so arbitration agreement didn’t fail for lack of consideration.

*** Arbitration - Collective Bargaining Agreements ***

• 9th – Employer’s tortious interference claim against international union wasn’t cognizable under LMRA Section 301(a).

• ME – Prior arbitration pursuant to collective bargaining agreement precluded employee from challenging discharge decision.

*** Arbitration - Individual Arbitration Agreements ***

2nd - Sarbanes-Oxley Act whistleblower claims are subject to arbitration. 

Guyden v. Aetna (2nd Cir 10/02/2008)
http://www.lawmemo.com/docs/2/guyden.pdf

Guyden sued the employer, asserting a whistleblower claim under the Sarbanes-Oxley Act (SOX).  The trial court dismissed, based on the parties' arbitration agreement. The 2nd Circuit affirmed.

The court held that SOX claims are subject to arbitration.  The court rejected Guyden's argument that there exists an "inherent conflict" between SOX's underlying purpose (the public dissemination of information about a corporate employer's fraudulent activities) and arbitration.  The court observed that "[t]ellingly ... both Houses of Congress, acting separately, rejected versions of SOX that would have prohibited mandatory arbitration of whistleblower claims."  Guyden made a similar argument regarding a confidentiality clause in the arbitration agreement, but the court rejected that as well.  With respect to that conclusion, the court stated "[w]e agree ... with the Fifth Circuit's observation that confidentiality clauses are so common in the arbitration context that Guyden's 'attack on the confidentiality provision is, in part, an attack on the character of arbitration itself.'"

11th – Employer’s promise to engage in arbitration wasn’t illusory, so arbitration agreement didn’t fail for lack of consideration.

Lambert v. Austin (11th Cir 10/07/2008)
http://caselaw.lp.findlaw.com/data2/circs/11th/0710651p.pdf

Lambert sued the employer, asserting age discrimination, race discrimination, and retaliation claims under the Age Discrimination in Employment Act (ADEA) and Title VII.  The trial court denied the employer’s motion to compel arbitration.  The 11th Circuit reversed, concluding that Lambert’s claims fell within the scope of a valid arbitration agreement.  The court rejected the argument that the arbitration agreement was invalid for lack of consideration, which was based on the argument that the employer’s promise to engage in arbitration under the agreement was illusory. The agreement provided, in part: "You should consult your Open Door facilitator to determine if your workplace dispute is appropriate for presentation to an arbitrator. If so, the facilitator will contact the AAA to initiate the process." The court found that this language did not mean that the employer's facilitator had ultimate authority to deny arbitration.

*** Arbitration - Collective Bargaining Agreements ***

9th – Employer’s tortious interference claim against international union wasn’t cognizable under LMRA Section 301(a).

Granite Rock v. Intl Brotherhood (9th Cir 10/22/2008)
http://caselaw.lp.findlaw.com/data2/circs/9th/0715040p.pdf

The employer sued the local union and its international, asserting claims for violation of Section 301(a) of the Labor Management Relations Act (LMRA).  The employer alleged that the local breached the parties’ collective bargaining agreement (CBA), and the international tortiously interfered with that agreement.  The trial court dismissed for “failure to state a claim” under Fed.R.Civ.P. 12(b)(6).  The 9th Circuit affirmed as to the international, but reversed as to the local.

The court held that the employer’s tortious interference claim against the international did not “arise under” the CBA between the employer and the local, and thus affirmed dismissal as to the international.  The court reasoned that because the international “has no rights or duties under the agreement … [the employer’s] tortious interference claim … does not meet the requirements of section 301(a).”  The court noted that “[t]he majority of our sister circuits to have considered the question have declined to find a section 301(a) cause of action against parties not governed by the relevant agreement.”  The court also noted that “the circuits are almost unanimous in rejecting LMRA jurisdiction over a claim such as [the employer’s claim against the international].”  The court reversed as to the employer’s claim against the local union, based on its determination that the trial court should have compelled arbitration of that claim.

ME – Prior arbitration pursuant to collective bargaining agreement precluded employee from challenging discharge decision.

Quintal v. City of Hallowell (Maine 10/07/2008)
http://www.lawmemo.com/docs/me/quintal.pdf

Quintal sued the municipal employer, challenging (pursuant to M.R.Civ.P. 80B) its decision to terminate his employment, and asserting a 1st Amendment retaliation (free speech) claim.  The trial court granted summary judgment in favor of the employer.  The court affirmed, concluding that 1) binding arbitration pursuant to the parties’ collective bargaining agreement precluded Quintal from pursuing his Rule 80B appeal; and 2) Quintal’s 1st Amendment claim failed because the speech at issue did not touch on a matter of public concern.

*** Arbitration - Individual Arbitration Agreements ***

• TX - Arbitration agreement limiting was unconscionable; arbitrator to decide whether cost provisions and discovery limitations were unconscionable (7-1).

• TX - Employer did not waive right to arbitration on arbitrable claims.

*** Arbitration - Collective Bargaining Agreements ***

• OR - Omnibus Transportation Employee Testing Act's express preemption clause didn't preempt enforcement of arbitration award.

• 7th - Changes to retirees' medical benefits were arbitrable.

• PA – Award reinstating employee who engaged in sexual harassment violated public policy.

• Fed - Suspension consisting of "credit for time served" was arbitrary.

• MA - Court confirms award reinstating teachers who were discharged for "failure to demonstrate fluency in English."

• TX - Back-pay award under Civil Service Act subject to offsets.

• 7th - Employer was entitled under Fed.R.Civ.P. 60(b) to relief from judgment inconsistent with subsequent grievance arbitration award.

*** Arbitration - Individual Arbitration Agreements ***

TX - Arbitration agreement limiting was unconscionable; arbitrator to decide whether cost provisions and discovery limitations were unconscionable (7-1).

In re Poly-America (Texas 08/29/2008)
Majority: http://www.supreme.courts.state.tx.us/historical/2008/aug/041049.pdf
Dissent: http://www.supreme.courts.state.tx.us/historical/2008/aug/041049d.pdf

The employee sued the employer for violation of the retaliatory discharge provision of the Workers' Compensation Act (WCA) and sought a declaratory judgment that the arbitration agreement was unenforceable. The trial court granted the employer's motion to compel arbitration. The Texas Court of Appeals granted the employee's writ of mandamus and held the arbitration agreement unconscionable. The Texas Supreme Court affirmed in part and reversed in part.

The arbitration agreement required the employee to spilt arbitration costs up to a capped amount, limited discovery, eliminated punitive damages and reinstatement remedies available under the WCA, and imposed other conditions on the arbitration process. The court concluded that permitting an employer to contractually absolve itself of the WCA statutory remedies of reinstatement and punitive damages would undermine the deterrent purpose of the WCA's anti-retaliation provisions. Because the arbitration agreement specifically provided that the arbitrator could modify unconscionable terms, the court opined that the arbitrator was better situated to determine whether the cost provisions and the discovery limitations were unconscionable as the case unfolds. The court determined under the severability provisions of the arbitration agreement that the remedies provision was easily excised from the arbitration agreement without defeating its underlying purpose.

The DISSENT argued that mandamus relief was neither prudent nor appropriate.

TX - Employer did not waive right to arbitration on arbitrable claims.

Wee Tots v. Morohunfola (Texas Ct App 09/18/2008)
http://www.lawmemo.com/docs/tx/weetots.htm

The employer sued Morohunfola for breach of the covenant not to compete and other claims. The trial court denied the employer's motion to compel arbitration of Morohunfola's counterclaims and third party claims. The Texas Court of Appeals reversed. The court stated that while the arbitration agreement did not specifically cite the Federal Arbitration Act (FAA), the express acknowledgement by Morohunfola that employment duties affect interstate commerce unambiguously implicated the FAA. The court found that the arbitration agreement required arbitration of Morohunfola's counterclaims, but did not cover the employer's claims for breach of the covenant not to compete and breach of confidentiality agreement. The court found that the actions by the employer in filing the lawsuit, engaging in discovery, and moving for partial summary judgment involved only the nonarbitrable claims. Based on these facts, the court concluded that the employer did not waive its right to compel arbitration.

*** Arbitration - Collective Bargaining Agreements ***

OR - Omnibus Transportation Employee Testing Act's express preemption clause didn't preempt enforcement of arbitration award.

Amalgamated Transit Union v. Tri Met (Oregon Ct App 09/09/2008)
http://www.publications.ojd.state.or.us/A133236.htm

The employer (a metropolitan transit district) discharged one of its bus drivers for failing to produce sufficient urine for a drug test.  An arbitrator determined that the test was flawed and should have been cancelled, and ordered the employee reinstated.  The employer refused to reinstate the employee until she passed an evaluation by a substance abuse professional, so the union filed an unfair labor practice complaint with the Employment Relations Board (ERB).  ERB concluded that the employer violated ORS 243.672(1)(g) by refusing to comply fully with the arbitration award.  The court affirmed, concluding that ERB "did not err in determining that 49 USC Section 5331 [the express preemption clause of the Omnibus Transportation Employee Testing Act] does not preempt enforcement of the arbitration order .... "

7th - Changes to retirees' medical benefits were arbitrable.

Exelon v. IBEW (7th Cir 09/02/2008)
http://caselaw.lp.findlaw.com/data2/circs/7th/074065p.pdf

The employer sought a declaration that changes to retirees' medical benefits were not covered by the collective bargaining agreement (CBA). The trial court granted the union's motion for summary judgment, finding the dispute to be arbitrable. The 7th Circuit affirmed. The CBA's grievance procedure applied to "any dispute or difference ... between the Company and the Union or its members as to the interpretation or application of any of the provisions of this Agreement ...." The court noted the grievance procedure was not limited to employees. The court concluded that any doubt about whether the employer agreed to arbitrate disputes on behalf of retirees was resolved by application of the presumption of arbitrability.

PA – Award reinstating employee who engaged in sexual harassment violated public policy.

Philadelphia Housing Authority v. AFSCME (Pennsylvania Cmwlth 09/15/2008)
http://www.courts.state.pa.us/OpPosting/CWealth/out/2405CD04_9-15-08.pdf

The public employer appealed the trial court’s decision affirming a grievance arbitration award.  The award reinstated an employee discharged for engaging in sexual harassment, based on the conclusion that the employee was discharged without “just cause.”  On remand from the Pennsylvania Supreme Court, the court reversed.  The court reasoned that the arbitration award violated the public policy against sexual harassment in the workplace, and “so undermine[d] the stated public policy that it cannot be enforced.”  The court noted that the Arbitrator determined the employee “repeatedly and egregiously sexually harassed” his co-worker – but found “just cause” lacking anyway.

Fed - Suspension consisting of "credit for time served" was arbitrary.

Greenstreet v. Social Security (Fed Cir 09/24/2008)
http://caselaw.lp.findlaw.com/data2/circs/fed/073312p.pdf

Greenstreet was discharged from his federal job.  An arbitrator ordered him reinstated without backpay, which essentially amounted to a suspension consisting only of "credit for time served."  Greenstreet appealed, arguing that the length of the suspension was arbitrarily determined by the amount of time the arbitrator took to issue a decision.  The Federal Circuit vacated in part and remanded for consideration of the appropriate length of Greenstreet's suspension.  Consistent with the approach taken by the Merit Systems Protection Board (MSPB), the court held that "the length of a suspension is arbitrary when it is based solely on the suspended employee's 'time served' awaiting decision."

MA - Court confirms award reinstating teachers who were discharged for "failure to demonstrate fluency in English."

School Committee v. Oung (Massachusetts Ct App 09/25/2008)
http://www.lawmemo.com/docs/ma/oung.htm

The employer (a public school district) appealed the trial court's judgment confirming an arbitration award reinstating three employees (teachers) with backpay.  The employees had been discharged for "failure to demonstrate fluency in English."  The court affirmed, concluding that (among other things) the arbitrator's exclusion of English-fluency test results "did not constitute a refusal to receive material information."  The court reasoned that exclusion of the test results "did not constitute an arbitrary refusal but rather a reasonable precaution against unreliability."

TX - Back-pay award under Civil Service Act subject to offsets.

City of Temple v. Taylor (Texas Ct App 08/27/2008)
http://www.lawmemo.com/docs/tx/taylor.htm

Taylor sued the employer seeking the full amount of back pay during the time he was suspended. The trial court granted Taylor's motion for summary judgment. The Texas Court of Appeals reversed. The sole issue on appeal was whether the arbitrator's award of back pay to Taylor under the Civil Service Act (CSA) should be reduced by the amount he earned from other sources. The court noted that section 143.053(f) of the CSA did not specifically address whether back-pay awards were to be offset by income earned from other sources during suspension, but merely stated that the officer was "entitled to ... full compensation" for the time lost. Finding that allowing Taylor to keep income earned from outside sources would result in a windfall recovery that violated the purpose of subsection (f), the court held that a calculation of "full compensation" under section 143.053(f) necessarily included offsets.

7th - Employer was entitled under Fed.R.Civ.P. 60(b) to relief from judgment inconsistent with subsequent grievance arbitration award.

Ameritech v. IBEW (7th Cir 09/10/2008)
http://caselaw.findlaw.com/data2/circs/7th/052574p.pdf

The employer and union submitted to grievance arbitration a dispute that had already resulted in two inconsistent arbitration awards (the first in favor of the employer and the second in favor of the union) and subsequent pending litigation.  The latest arbitration arose from a settlement agreement, whereby the parties agreed to submit their dispute to arbitration a third time for "final resolution" of the conflict.  The arbitrator ruled in the employer's favor, and the employer moved to vacate the earlier adverse judgment pursuant to Fed.R.Civ.P. 60(b).  The trial court denied the motion because the appeals arising from the two prior arbitration awards were still pending.  The 7th Circuit dismissed those two pending appeals, based on the parties' settlement, and concluded that the employer was entitled to relief under Rule 60(b) based on that settlement and the fact that the third award was inconsistent with the second.

*** Arbitration - Individual Arbitration Agreements ***

• CA - Court allows review of arbitrator's legal reasoning.

• 3rd - Employee's inability to understand English was immaterial as to whether he assented to arbitration agreement.

• 6th - USERRA claims are subject to arbitration.

• OH - Trial court erred in finding arbitration agreement to be unconscionable without first finding it to be substantively unconscionable.

• CA - One-year arbitrable limitation period upheld in FEHA claim.

• TX - Arbitrator didn't refuse to hear material evidence.

• OH - Dismissal of arbitration allowed employee to file discrimination claims in court.

• TX - Trial court was without authority to modify arbitration award.

• CA - Trial court lacked discretion to deny arbitration of covered claims, but had discretion to delay its order to arbitrate.

• OR - Appeal of an order denying arbitration must be via interlocutory appeal of that order - not via appeal of a final judgment.

• NJ - Employee was not equitably estopped to arbitrate violation of stock agreement without arbitration clause where employment agreement had arbitration clause.

*** Arbitration - Collective Bargaining Agreements ***

• OH - Arbitrator exceeded her authority when she ignored the parties' stipulation that public employee was afforded a pre-termination hearing.

• AK - Sovereign immunity waived for prejudgment interest in suits to confirm arbitration awards under CBA.

• OH - Arbitrator exceeded his authority when he considered untimely grievance.

• PA - Arbitration award didn't fail "essence test."

*** Arbitration - Individual Arbitration Agreements ***

CA - Court allows review of arbitrator's legal reasoning.

Cable Connections, Inc. v. DirecTV, Inc. (California 08/25/2008)
http://www.courtinfo.ca.gov/opinions/documents/S147767.PDF

The California Supreme Court has ruled that parties to an arbitration agreement may obtain court review of the arbitrators' award on the ground that they committed legal error. The arbitration agreement provided: "The arbitrator shall not have the power to commit errors of law or legal reasoning, and the award may be vacated or corrected on appeal to a court of competent jurisdiction for any such error." The California recognized that the US Supreme Court recently held that such review is not available under the Federal Arbitration Act, but held that it is available under California's Arbitration Act. California's statute allows a court to vacate an award if "the arbitrators exceeded their powers." Therefore, committing legal error was acting in excess of the arbitrator's power, and that opens up review under the California statute.

3rd - Employee's inability to understand English was immaterial as to whether he assented to arbitration agreement.

Morales v. Sun Constructers (3rd Cir 08/28/2008)
http://www.lawmemo.com/docs/3/morales.pdf

Morales sued the employer, asserting various claims arising from his discharge from employment.  The employer moved to compel arbitration, but the trial court denied the motion.  The 3rd Circuit reversed.

The trial court determined that Morales didn't assent to the written arbitration agreement and thus declined to enforce it, based on its finding that the agreement was in English and Morales (who spoke only Spanish) didn't understand it.  The court concluded that the trial court erred.  The court cited Upton v. Tribilcock, 91 US 45 (1875) for the proposition that "[i]t will not do for a man to enter into a contract, and, when called upon to respond to its obligations, to say that he did not read it when he signed it, or did not know what it contained."  The court noted that, under the "objective theory" of contract formation, "what is essential is not assent, but rather what the person to whom a manifestation is made is justified as regarding as assent."  The court concluded that, absent a showing of fraud, "the fact that an offeree cannot read, write, speak, or understand the English language is immaterial to whether an English-language agreement the offeree executes is enforceable."

6th - USERRA claims are subject to arbitration.

Landis v. Pinnacle Eye Care (6th Cir 08/11/2008)
http://caselaw.lp.findlaw.com/data2/circs/6th/076204p.pdf

Landis sued the employer, asserting (among other things) a claim for violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA).  The trial court granted the employer's motion to stay the case and compel arbitration.  The 6th Circuit affirmed, holding that USERRA claims are subject to arbitration.  The court noted that the 5th Circuit has come to the same conclusion, and cited with approval that circuit's decision in Garrett v. Circuit City Stores, Inc., 449 F3d 672 (5th Cir 2006).  The court reasoned that 1) nothing in USERRA's statutory language or legislative history demonstrates a Congressional intent to preclude arbitration; and 2) there is no inherent conflict between arbitration and USERRA's underlying structure and purpose.

OH - Trial court erred in finding arbitration agreement to be unconscionable without first finding it to be substantively unconscionable.

Roe v. Rent-A-Center (Ohio Ct App 08/25/2008)
http://www.sconet.state.oh.us/rod/docs/pdf/12/2008/2008-ohio-4307.pdf

Roe sued the employer, asserting various state law claims.  The employer moved to compel arbitration, but the trial court denied the motion on the ground that the employer's arbitration agreement was unconscionable and hence unenforceable.  The court reversed, concluding that the trial court 1) failed to determine whether the arbitration agreement was substantively unconscionable; and 2) failed to adequately support its determination that the arbitration agreement was procedurally unconscionable.  The court noted that Ohio law requires an arbitration agreement to be both substantively and procedurally unconscionable in order to be unconscionable as a whole.

CA - One-year arbitrable limitation period upheld in FEHA claim.

Pearson Dental v. Superior Court (California Ct App 08/21/2008)
http://www.courtinfo.ca.gov/opinions/documents/B206740.PDF

Turcios sued the employer for violation of the Fair Employment and Housing Act (FEHA) alleging wrongful discharge based on age and other claims. The employer moved to compel arbitration which the trial court granted. The arbitrator granted the employer's motion for summary judgment on the ground that arbitration was not requested within one year. The trial court granted Turcios's motion to vacate the arbitration award. The California Court of Appeal reversed.

The issue on appeal was whether the one year limitation period in the arbitration agreement violated Turcios's unwaivable FEHA rights to a two year statute of limitations. The court found that the FEHA did not have a true two-year limitation period, but rather a hybrid period for the right to sue letter; that state law did not hold that a shorter arbitral period was per se unenforceable; that 9th Circuit decisions finding that one-year arbitral limitation periods were unenforceable involved continuing violation cases, not discrete acts; that Turcios did not raise the arbitral limitation issue at the motion to compel arbitration stage but at the motion to vacate the arbitration award stage; and that the post-arbitration record demonstrated that the one-year arbitral limitation period was more than adequate for Turcios to vindicate his FEHA rights had he timely submitted to arbitration. In the unusual posture of this case, the court concluded that the trial court erred in finding that the arbitrator, by granting summary judgment to the employer based on the one-year limitation period, exceeded his powers.

TX - Arbitrator didn't refuse to hear material evidence.

Affiliated Pathologists v. McKee (Texas Ct App 08/25/2008)
http://www.5thcoa.courts.state.tx.us/cgi-bin/as_web.exe?c05topin.ask+D+884930

The employer appealed the trial court's order confirming an arbitration award rendered in McKee's favor in 2004, and vacating an earlier arbitration award rendered in 1998. Both awards arose from the employer's claim for alleged violation of a non-compete agreement and McKee's counterclaim for alleged breach of an agreement regarding severance pay.  The court affirmed, concluding that 1) a motion to vacate the 1998 arbitration award was timely submitted under Tex. Civ. Prac. & Rem. Code Section 171.088(b); and 2) the arbitrator did not refuse to hear material evidence in the 2004 arbitration proceeding.

OH - Dismissal of arbitration allowed employee to file discrimination claims in court.

Cercone v. Merrill Lynch (Ohio Ct App 08/21/2008)
http://www.sconet.state.oh.us/rod/docs/pdf/8/2008/2008-ohio-4229.pdf

The employer commenced arbitration before the NASD requiring Cercone to repay a promissory note for a "forgivable loan." Cercone counterclaimed contending he was not obligated to repay because he was not discharged "for cause" and alleging claims for disability discrimination, constructive discharge, retaliation, and other claims. The parties settled and informed NASD to dismiss the case, but were unable to agree on how to structure repayment without tax consequences within the time period to reopen the arbitration proceeding. Cercone sued the employer for disability discrimination, wrongful discharge in violation of public policy, and other claims. The trial court granted the employer's motion to compel arbitration. The Ohio Court of Appeals reversed. Applying a de novo standard of review to interpret the arbitration agreement, the court concluded that discrimination claims under the agreement were specifically exempt from mandatory arbitration and that Cercone did not waive his right to pursue discrimination claims in court by agreeing to an arbitration which was dismissed. The court concluded that dismissal of an arbitration left the parties as they were at the beginning of the process, and they were entitled to begin anew.

TX - Trial court was without authority to modify arbitration award.

Garza v. Phelps Dodge (Texas Ct App 08/21/2008)
http://www.lawmemo.com/docs/tx/garza.htm

Garza moved to confirm an arbitration award in a suit Garza filed against the employer alleging national origin discrimination. The trial court confirmed the arbitration award by awarding back pay reduced by Garza's interim earnings and dismissed the lawsuit based on res judicata. The Texas Court of Appeals reversed in part and rendered judgment confirming the arbitration award as written. The arbitration award ordered reinstatement after a 30-day leave without pay. Because neither party sought clarification of the award from the arbitrator and neither party sought adjudication of the back pay and offset questions until well after the ninety-day deadline for modification of the award, the trial court was without authority to consider the back pay and offset questions.

CA - Trial court lacked discretion to deny arbitration of covered claims, but had discretion to delay its order to arbitrate.

RN Solutions v. Catholic Healthcare (California Ct App 08/15/2008)
http://www.courtinfo.ca.gov/opinions/documents/A118077.PDF

RN Solution (RNS) contracted to recruit nurses for Catholic Healthcare (CHW). RNS sued CHW alleging a series of interrelated contract, business torts, and personal injury claims. The trial court denied the motion to compel arbitration where the contract contained an arbitration provision. The California Court of Appeal reversed.

The court determined that the third party provisions of the Code of Civil Procedure section 1281.2(c) did not apply where all the parties in the lawsuit were bound by the arbitration agreement, but no action or proceeding existed between a party to the arbitration agreement and a third party. Rowe v. Exline, 153 Cal App4th 1276 (2007). The court explained that the mere fact that some claims were arbitrable under the arbitration clause in the contract and the battery-related tort claims were not, did not produce third parties for the purposes of section 1281.2. The court concluded that the trial court lacked discretion under section 1280 et seq. to deny arbitration of causes of action covered by the arbitration clause. The court ordered the trial court to enter an order compelling arbitration of the arbitrable causes of action and to decide pursuant to the third paragraph of section 1281.2(c) whether a determination of the nonarbitrable issues would make the arbitration unnecessary and, if so, whether the arbitration order should be delayed.

OR - Appeal of an order denying arbitration must be via interlocutory appeal of that order - not via appeal of a final judgment.

Snider v. Production Chemical (Oregon Ct App 08/13/2008)
http://www.publications.ojd.state.or.us/A131621.htm

Snider sued the employer, asserting claims for breach of contract and violation of state wage and hour laws.  The employer petitioned to compel arbitration, but the petition was denied by the trial court.  The matter proceeded to a jury trial, where Snider prevailed.  Judgment was entered in Snider's favor, and the employer appealed.  

The appeal was timely filed with respect to the final judgment, but not with respect to the order denying the petition to compel arbitration.  The court held that pursuant to ORS 36.730 "an appeal from an order denying a petition to compel arbitration ... must be commenced within 30 days after the order is entered in the trial court register."  Since the employer's appeal was untimely as to the trial court's order denying the petition to compel arbitration, the court concluded it lacked jurisdiction to consider that issue.  The court rejected other issues as unpreserved.

NJ - Employee was not equitably estopped to arbitrate violation of stock agreement without arbitration clause where employment agreement had arbitration clause.

Angrisani v. Financial Technology (New Jersey App Div 08/07/2008)
http://www.judiciary.state.nj.us/opinions/a5477-06.pdf

Angrisani sued the employer for violation of the employment agreement and other claims and Financial Technology (FT) for violation of the stock agreement. The trial court granted the employer's and FT's motions to compel arbitration. The New Jersey Appellate Division affirmed in part and reversed in part. The primary issue was whether FT could compel arbitration where its agreement did not contain an arbitration clause, but the employer's employment agreement did. FT argued that Angrisani was equitably estopped from refusing to arbitrate his claims against FT, which were intertwined with and dependant upon his employment agreement. The court found that Angrisani did not engage in any course of action that could support a finding of equitable estoppel; he simply entered into two contracts, one of which did not contain an arbitration provision, and when a dispute arose, he asserted claims in a judicial forum as he was permitted to do under the stock agreement.

*** Arbitration - Collective Bargaining Agreements ***

OH - Arbitrator exceeded her authority when she ignored the parties' stipulation that public employee was afforded a pre-termination hearing.

City of Akron v. Civil Service Personnel Ass'n (Ohio Ct App 08/27/2008)
http://www.sconet.state.oh.us/rod/docs/pdf/9/2008/2008-ohio-4331.pdf

The municipal employer appealed the trial court's judgment confirming a grievance arbitration award rendered in the union's favor.  The court reversed, concluding that the arbitrator exceeded her authority when she ignored the parties' stipulation that the employee at issue was afforded a pre-termination hearing.

AK - Sovereign immunity waived for prejudgment interest in suits to confirm arbitration awards under CBA.

State of Alaska v. ASEA (Alaska 08/22/2008)
http://www.state.ak.us/courts/ops/sp-6298.pdf

The issue on appeal was whether the State was protected by sovereign immunity from payment of prejudgment interest on an award made by an arbitrator under a collective bargaining agreement (CBA). The arbitrator's award did not discuss nor award interest on the back pay award. The trial court awarded prejudgment interest . The Alaska Supreme Court affirmed. The State argued that confirmation of an arbitrator's award arose under the Public Employment Relations Act (PERA) for which sovereign immunity was not waived. ASEA argued that confirming an arbitration award was a contract claim where sovereign immunity was waived under Alaska Statute 09.50.250. The court found that confirmation of an arbitrator's award was properly characterized as a contract claim recognized at common law and encompassed by AS 09.50.250 which authorized prejudgment interest.

OH - Arbitrator exceeded his authority when he considered untimely grievance.

Fairfield v. AFSCME (Ohio Ct Appeals 08/04/2008)
http://www.sconet.state.oh.us/rod/docs/pdf/12/2008/2008-ohio-3891.pdf

The municipal employer appealed the trial court's decision confirming a grievance arbitration award rendered in the union's favor.  The court reversed, concluding that the grievance was untimely filed under the terms of the collective bargaining agreement, and that the arbitrator was not authorized to consider the grievance under the "continuing violation" theory.

PA - Arbitration award didn't fail "essence test."

NW School Dist v. Ed Association (Pennsylvania Cmwlth Ct 08/05/2008)
http://www.courts.state.pa.us/OpPosting/CWealth/out/1334CD07_8-5-08.pdf

The public employer appealed from the trial court's decision confirming a grievance arbitration award rendered in the union's favor.  The court affirmed, rejecting the employer's arguments that 1) the award failed to "draw its essence" from the collective bargaining agreement (CBA); 2) the award was contrary to law; and 3) the remedy awarded improperly extended beyond the CBA's expiration date.

*** Arbitration - Individual Arbitration Agreements ***

• MO - Continued at-will employment does not constitute legal consideration for a contract to arbitrate.

• CA - Provision in adhesive arbitration agreement, giving arbitrator exclusive authority to decide enforceability, was unconscionable.

• 9th - Employer neither breached arbitration agreement nor waived its right to arbitration.

*** Arbitration - Collective Bargaining Agreements ***

• 2nd - CBA's election-of-remedies provision didn't violate Title VII.

• CT - Trial court improperly vacated arbitration award.

• 6th - Supplemental award exceeded authority of arbitrator (2-1).

• PA - Employer could not unilaterally eliminate past practice of overtime.

• 7th - Dispute between union and employer fell within neutrality agreement's arbitration clause.

• 2nd - CBA covering a one-person bargaining unit was a valid contract enforceable under Section 301 of the LMRA.

*** 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)
http://www.lawmemo.com/docs/mo/morrow.htm

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)
http://www.courtinfo.ca.gov/opinions/documents/A114848.PDF

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)
http://caselaw.lp.findlaw.com/data2/circs/9th/0615903p.pdf

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)
http://caselaw.findlaw.com/data2/circs/2nd/060474p.pdf

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)
http://www.jud.state.ct.us/external/supapp/Cases/AROcr/CR288/288CR115.pdf

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)
http://caselaw.lp.findlaw.com/data2/circs/6th/073577p.pdf

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)
http://www.aopc.org/OpPosting/CWealth/out/1904CD07_7-17-08.pdf

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)
http://caselaw.findlaw.com/data2/circs/7th/071688p.pdf

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)
http://caselaw.findlaw.com/data2/circs/2nd/071155p.pdf

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).

*** Arbitration - Individual Arbitration Agreements ***

• FL - Arbitration agreement was valid and enforceable.

*** Arbitration - Collective Bargaining Agreements ***

• WI - By ignoring statutory law, arbitrator exceeded her authority (4-3).

• 9th - Receipt of "no match" letter from Social Security Administration didn't constitute knowledge that employees were undocumented.

• NY - Arbitrator's award was irrational.

• CT – Employer was unable to establish arbitration award violated public policy.

• PA – Employer's managerial prerogative trumped past practices.

*** Arbitration - Individual Arbitration Agreements ***

FL - Arbitration agreement was valid and enforceable.

Santos v. General Dynamics (Florida Ct App 06/25/2008)
http://www.4dca.org/June%202008/06-25-08/4D07-5067.op.pdf

Santos sued the employer, asserting claims for national origin discrimination and retaliation under the Florida Civil Rights Act (FCRA).  The trial court granted the employer's motion to compel arbitration.  The court affirmed, concluding that the employer's arbitration agreement was valid and enforceable. Although Santos did not sign the arbitration agreement, it was mailed to him and he continued to work for the employer.

*** Arbitration - Collective Bargaining Agreements ***

WI - By ignoring statutory law, arbitrator exceeded her authority (4-3).

Racine v. International Assn of Machinists (Wisconsin 06/26/2008)
http://www.lawmemo.com/docs/wi/racine.pdf

The arbitrator found the employer violated the collective bargaining agreement (CBA) by entering into service agreements with retired employees. The trial court vacated the arbitration award which the Wisconsin Court of Appeals reversed. The Wisconsin Supreme Court held the trial court properly vacated the arbitration award. The arbitrator stated in the award that she made no attempt to either interpret or apply statutory law. The court found that the retired employees were employed by the judicial branch pursuant Wis Stat section 767.405, which implicated separation of powers principles. The court concluded that the arbitrator exceeded her authority by not considering Wis Stat section 767.405 and the relevant case law. The DISSENT argued that by failing to address the process by which the county eliminated the positions, the majority ignored the standard of review and the determinations of the arbitrator.

9th - Receipt of "no match" letter from Social Security Administration didn't constitute knowledge that employees were undocumented.

Aramark v. Service Employees (9th Cir 07/16/2008)
http://caselaw.lp.findlaw.com/data2/circs/9th/0656662p.pdf

The employer received a "no match" letter from the Social Security Administration (SSA), indicating that the employer had reported information on some of its employees that did not match the SSA's records.  The employer gave the affected employees three days to correct the mismatches.  When the employees failed to comply, they were discharged.   At grievance arbitration, an arbitrator concluded that the employees were discharged without just cause under the parties' collective bargaining agreement.  He ordered them reinstated with backpay.  The trial court vacated the arbitration award on the basis that it violated public policy.  The 9th Circuit reversed the trial court and confirmed the arbitration award.

The employer argued that the arbitration award violated the public policy expressed in the Immigration Reform and Control Act of 1986 (IRCA).  Under IRCA, employers are subject to civil and criminal liability if they knowingly employ undocumented workers.  Under IRCA, the "knowing" element can be satisfied by "constructive knowledge."  The court observed that IRCA provided a sufficient public policy basis for vacating an arbitration award, but concluded that receipt of the "no match" letters did not constitute knowledge (or constructive knowledge) that the employees were undocumented.  The court noted that "[a social security number] discrepancy does not automatically mean than an employee is undocumented....In fact, the SSA tells employers that the information it provides them 'does not make any statement about ... immigration status' and 'is not a basis, in and of itself, to take any adverse action against the employee.'"  The court thus concluded that the arbitrator did not err in determining that the employees were discharged without just cause.

NY - Arbitrator's award was irrational.

In the Matter of Local 342 v. Town (New York App Div 06/17/2008)
http://www.courts.state.ny.us/reporter/3dseries/2008/2008_05702.htm

The arbitrator found that the employer had just cause to suspend the employee. The trial court vacated the award and directed reinstatement with back pay and lost benefits. The New York Appellate Division affirmed. The employee, a heavy equipment operator for the employer, was suspended after a building he owned was cited for numerous code violations. The court agreed the award was irrational because the employee's position was completely unrelated to the off-duty misconduct of which he was accused.

CT – Employer was unable to establish arbitration award violated public policy.

State v. Connecticut State Employees (Connecticut 06/10/2008)
http://www.jud.state.ct.us/external/supapp/Cases/AROcr/CR287/287CR97.pdf

The arbitrator sustained the employee’s grievance that he was unilaterally removed from the voluntary transfer list to another correctional facility. The trial court denied the employer’s motion to vacate the award. The Connecticut Supreme Court affirmed. The employee had been involved in a romantic relationship in 1994 which turned violent with another employee now at the transfer requested correction facility. The employer argued that the arbitration award violated the public policy against violence in the workplace. The court concluded that an executive order and two statutes established clearly defined and dominant public policy against workplace violence and sexual harassment. The court noted that the employer was unable to establish any negative workplace interaction between the two employees or proof that they were unable to work together and, thus, the employer did not meet its burden of demonstrating that the arbitration award violated public policy.

PA – Employer's managerial prerogative trumped past practices.

McCandless v. McCandless Police (Pennsylvania Cmnwlth Ct 06/18/2008)
http://www.aopc.org/OpPosting/CWealth/out/1795CD07_6-18-08.pdf

The police officers' union appealed the trial court's order vacating a grievance arbitration award rendered in its favor.  The court affirmed, concluding that the employer was exercising management prerogative when it adjusted one police officer's schedule in order to accommodate the military obligations of another.  The court noted that although the arbitrator had relied upon "past practices" in support of his decision that the scheduling change violated the parties' collective bargaining agreement (CBA), "managerial prerogative cannot be abridged by a past practice."