A blog for employment lawyers, human resources professionals, and union representatives.
This page contains entries under the topic: "Federal court jurisdiction" | Main
May 22, 2005
No appellate jurisdiction on order to arbitrate
Sometimes a federal district court can make things so complex that a circuit court cannot review an order to arbitrate. So it was in Machinists Local 2121 v. Goodrich Corp (5th Cir 05/18/2005).
The union sued to compel arbitration of a dispute over retiree benefits in a collective bargaining agreement. The trial court granted partial summary judgment for the union; the 5th Circuit held that it lacked jurisdiction to review the trial court's order to arbitrate. The union actually made three claims: for (a) specific performance of the health care portion of the agreement, (b) specific performance of the arbitration clause, and (c) a declaration of rights under the agreement.
The 5th Circuit raised the question of its appellate jurisdiction on its own motion, and held that it lacked jurisdiction. (1) The trial court's order was not an appealable final order because it granted only part of the relief sought by the union. The trial court declined to address the declaratory judgment issue, closed the case administratively (the equivalent of a stay), and expressly retained jurisdiction. (2) The trial court stayed the case and ordered arbitration, and that is not an interlocutory injunction, and is not appealable under 28 USC 1292(a)(1). (3) The circuit court did not have appellate jurisdiction on the theory that the trial court wholly lacked jurisdiction. The employer argued that the union lacked standing under Labor Management Relations Act Section 301 because a union is limited to suing on behalf of "employees" and retirees are not employees. Without deciding that issue, the 5th Circuit ruled that the union had Section 301 standing because 52 retirees expressly authorized the union to represent them.
My view: I never heard of a case where a union can sue under Section 301 on behalf non-employees simply because the non-employees granted the union that authority. It would have been better for the 5th Circuit to address the issue of whether a union can sue under Section 301 on behalf of retirees.
Posted May 22, 2005 by Ross Runkel, Editor at LawMemo, publisher of Employment Law Memo. Try it.
February 08, 2005
Federal jurisdiction to enforce arbitration agreement
I am grateful to David Nagle, chair of LeClair Ryan's Labor & Employment practice group, for pointing out a 4th Circuit decision dealing with federal court jurisdiction to enforce arbitration agreements.
Discover Bank v. Vaden [full text pdf] (4th Cir 01/24/2005) is a banking case that should have an impact on employment cases. This is another reminder that the law dealing with enforcement of individual employer-employee arbitration agreements (not involving collective bargaining agreements) is often shaped by cases that have nothing at all to do with employment law.
The bank sued its customer in federal court under Federal Arbitration Act Section 4 to compel arbitration of state law claims that the customer had filed in state court.
The issue was whether the presence of a federal question in the underlying dispute is enough to support subject matter jurisdiction. The 4th Circuit held that it was.
Courts of Appeals are split on the question of whether, in a Section 4 suit, a federal district court has subject matter jurisdiction when the underlying dispute between the parties raises a federal question. One line of authority is that the basis for federal jurisdiction must appear on the face of the arbitration petition itself. That would require that there be some basis for jurisdiction other than the underlying dispute - such as diversity of citizenship or admiralty. The other line of authority (adopted by the 4th Circuit) allows the district court to look through the arbitration petition and "assess whether the overall controversy between the parties 'raises a federal question.'"
Posted February 08, 2005 by Ross Runkel, Editor at LawMemo, publisher of Employment Law Memo. Try it.
