NLRB arbitration deferral to change?
January 22, 2012 by Ross Runkel at LawMemo
Here is the NLRB's January 20 press release, announcing the General Counsel's intent to try to get the Board to change its arbitration deferral policy:
Citing concerns about delays in processing grievances through parties’ contractual grievance-arbitration procedures, NLRB Acting General Counsel Lafe Solomon has proposed that the Board consider revising the existing policy of deferring charges to arbitration in certain circumstances.
When it is anticipated that charges alleging violations of Section 8(a)(1) and (3) – which include discharges or other discrimination based on union activities -- will not be resolved or arbitrated within a year, Acting General Counsel Solomon would urge that the Board not defer the case, but rather decide the case on the merits. He would also apply the new policy to cases that have already been deferred for more than one year. Mr. Solomon specifically targeted cases involving issues of unlawful discrimination and interference with workers’ protected rights because they are significant and uniquely within the Board’s expertise.
In a memo issued today, Acting General Counsel Solomon directed Regional staff to investigate whether there are significant backlogs or other probable delays in the grievance-arbitration process before making a determination to defer a case alleging Section 8(a)(1) and (3) violations. If the arbitration of this claim is likely to be delayed by more than a year, the Region should not defer the matter to the grievance-arbitration process. Instead, it should fully investigate the charge and, if meritorious, send the case to the Division of Advice at NLRB headquarters for further action. Regional offices should also regularly monitor deferred cases, and, if the case has not been arbitrated or resolved within a year, the Region should consider the parties’ positions and submit the case to the Division of Advice if it determines that the case is meritorious or that continued deferral is appropriate based upon the circumstances of that particular case.
This directive applies only to union workplaces where grievance-arbitration procedures are spelled out in a collective-bargaining agreement. It applies to all pending cases, including those that have already been deferred for more than a year. The directive will not apply to typical Section 8(a)(5) cases, which often involve allegations of contractual violations, that are normally better left to resolution through arbitration.
The National Labor Relations Board has a long-standing policy to defer charges made by employees to the parties’ grievance-arbitration procedures contained in a collective bargaining agreement, as long as certain conditions are met. Deferral of cases has been done in order to promote collective bargaining and the private resolution of disputes, presumably more quickly than through the NLRB’s administrative process. The Board later reviews the resulting arbitration decision to ensure that it meets certain standards.
The Acting General Counsel’s goal, as described in the memo, is to ensure a prompt resolution of disputes in those cases in which backlogs hold up the process for many years. Acting General Counsel Solomon wrote, “Excessive delays can render enforcement of a Board order ‘pointless and obsolete.’ The circumstances may have changed so much at the job site that by the time a Board order issues it would be impossible to effect meaningful compliance, and the Charging Party would be left without a remedy. This lack of a remedy can erode public respect and confidence in the law.”
The central review of cases in Headquarters’ Division of Advice will allow the Acting General Counsel to identify trends and bring the issue to the Board.
Today’s memo builds upon an earlier General Counsel directive regarding Board deferral to grievance-arbitration procedures. That memo suggested new ways for the Board to analyze arbitration awards to ensure that workers’ rights under the law have been addressed and protected.
Credit card holders must arbitrate claims
January 10, 2012 by Ross Runkel at LawMemo
The US Supreme Court held today that the Credit Repair Organizations Act (CROA) does not trump the Federal Arbitration Act (FAA) requirement that an arbitration agreement must be enforced according to its terms.
CompuCredit Corp v. Greenwood (US SUpreme Court 01/10/2012).
The Court's syllabus:
Although respondents’ credit card agreement required their claims to be resolved by binding arbitration, they filed a lawsuit against petitioner CompuCredit Corporation and a division of petitioner bank, alleging, inter alia, violations of the Credit Repair Organizations Act (CROA). The Federal District Court denied the defendants’ motion to compel arbitration, concluding that Congress intended CROA claims to be nonarbitrable. The Ninth Circuit affirmed.
Held: Because the CROA is silent on whether claims under the Act can proceed in an arbitrable forum, the Federal Arbitration Act (FAA) requires the arbitration agreement to be enforced according to its terms. Pp. 2–10.
(a) Section 2 of the FAA establishes “a liberal federal policy favor- ing arbitration.” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24. It requires that courts enforce arbitration agreements according to their terms. See Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 221. That is the case even when federal statutory claims are at issue, unless the FAA’s mandate has been “over-ridden by a contrary congressional command.” Shearson/American Express Inc. v. McMahon, 482 U. S. 220, 226.
(b) The CROA provides no such command. Respondents contend that the CROA’s disclosure provision—which requires credit repair organizations to provide consumers with a statement that includes the sentence “ ‘You have a right to sue a credit repair organization that violates the [Act],’ ” 15 U. S. C. §1679c(a)—gives consumers the right to bring an action in a court of law; and that, because the CROA prohibits the waiver of “any right of the consumer under this sub- chapter,” §1679f(a), the arbitration agreement’s waiver of the “right” to bring a court action cannot be enforced. Respondents’ premise is flawed. The disclosure provision creates only a right for consumers to receive a specific statement describing the consumer protections that the law elsewhere provides, one of which is the right to enforce a credit repair organization’s “liab[ility]” for “fail[ure] to comply with [the Act].” §1679g(a). That provision does not override the FAA’s mandate. Its mere contemplation of judicial enforcement does not demonstrate that the Act provides consumers with a “right” to initial judicial enforcement.
(c) At the time of the CROA’s enactment in 1996, arbitration clauses such as the one at issue were no rarity in consumer contracts generally, or in financial services contracts in particular. Had Congress meant to prohibit these very common provisions in the CROA, it would have done so in a manner less obtuse than what respondents suggest. Pp. 8–9.
615 F. 3d 1204, reversed and remanded.
SCALIA, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, BREYER, and ALITO, JJ., joined. SOTOMAYOR, J., filed an opinion concurring in the judgment, in which KAGAN, J., joined. GINSBURG, J., filed a dissenting opinion
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