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NLRB seeks briefs on class action arbitration issue
June 21, 2011 by Ross Runkel at LawMemo
The NLRB is inviting briefs [link to Invitation] on the following issue:
Did the respondent violate Section 8(a)(1) of the [National Labor Relations Act] by maintaining and enforcing its Mutual Arbitration Agreement, under which employees are required, as a condition of employment, to agree to submit all employment disputes to individual arbitration, waiving all rights to a judicial forum, where the arbitration agreement further provides that arbitrators will have no authority to consolidate claims or to fashion a proceeding as a class or collective action?
Briefs are due July 20.
My view:
This is a case of extraordinary importance because -
(1) The US Supreme Court has held that an arbitration agreement containing a class action waiver is enforceable under the Federal Arbitration Act even if such a provision would be considered unconscionable under the laws of a particular state. AT&T Mobility LLC v. Concepcion (US Supreme Court 04/27/2011).(2) If the NLRB holds that such an agreement violates the National Labor Relations Act, then employers who maintain such agreements will be subject to unfair labor practice charges. So, employers would not be able to implement such an agreement in spite of the Supreme Court decision.
(3) Any decision by the NLRB in this case will apply to both unionized and non-union employers in the private sector.
SCOTUS case on arbitration waiver is settled
June 07, 2011 by Ross Runkel at LawMemo
Stok & Associates v. Citibank was pending in the US Supreme Court, but the parties have settled, and the Court dismissed the case. [Order]
Stok and Citibank had a contract governing their banking relationship, and the contract contained an agreement to arbitrate all disputes. After a dispute arose regarding Citibank's handling of a check, Stok sued in state court alleging a number of state law claims. Citibank filed an answer which made no reference to arbitration. Over the following two weeks, Stok made four filings relevant to its case (offer of judgment, request for production, reply, notice of readiness for trial) and the court set a trial date. Two weeks later Citibank filed a motion to compel arbitration in state court. Another month later Citibank filed a petition to compel arbitration in federal court, which was denied. The 11th Circuit reversed.
The 11th Circuit reasoned that Citibank's participation in litigation did not result in prejudice to Stok. Citibank delayed for only one month before invoking its right to arbitrate, and Stok could not point to any portion of the record that reveals either the amount of money it spent or the number of hours it dedicated to conducting litigation-specific discovery and preparing litigation-specific documents.
The US Supreme Court granted certiorari to review the 11th Circuit judgment. The Supreme Court dismissed the case on June 2, 2011 because the parties settled.
The terms of the settlement have not been disclosed.
