Arbitration & Mediation

*** Arbitration - Individual Arbitration Agreements ***

• MA - Arbitration agreement did not cover state statutory discrimination claims (6-1).

• WA - Provisions in arbitration agreement were unconscionable but severable.

• 8th - Employee?s continued employment was acceptance of, and consideration for, arbitration program.

*** Arbitration - Collective Bargaining Agreements ***

• US - Cert granted on Section 301 suit: tortious interference and duty to arbitrate.

• PA - Reinstating teacher?s aide who overdosed in classroom violated public policy.

• NJ - CBA gave arbitrators authority to decide whether probationary employee was entitled to grievance arbitration.

• 7th - Discharge under LCA denied while validity of LCA was under challenge.

• NJ - Terms of a CBA prevail over conflicting terms in an individual employment contract.

• DC - Award of retroactive pay drew its essence from CBA.

• PA - Interest arbitration clauses: one upheld, one not (2-1).

• PA - Petition to review Act 111 arbitration award is denied.

• PA - Labor Relations Board cannot change grievance process from arbitration to another form of dispute resolution.

• PA ? School district violated CBA by unilaterally cuttting extracurricular activities after expiration of CBA.

*** Arbitration - Individual Arbitration Agreements ***

MA - Arbitration agreement did not cover state statutory discrimination claims (6-1).

Warfield v. Beth Israel Deaconess Med Cntr (Massachusetts 07/27/2009)
http://www.lawmemo.com/docs/ma/warfield.htm

Warfield sued her employers claiming gender-based discrimination and retaliation in violation of state statute. The trial court denied the employers' motion to compel arbitration; the Massachusetts Supreme Judicial Court affirmed.

Warfield had been employed as an anesthesiologist for 20 years before being appointed anesthesiologist-in-chief. At that time she signed an arbitration agreement which in part provided, "Any claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations shall be settled by arbitration." Nothing in the agreement referred to employment discrimination statutes or claims.

The court found that such claims are subject to arbitration but that this agreement did not cover them. In doing so, the court announced a state law rule of interpretation: "Our interpretive rule states only that as a matter of the Commonwealth's general law of contract, a private agreement that purports to waive or limit - whether in an arbitration clause or on some other contract provision - the employee's otherwise available right to seek redress for employment discrimination through the remedial paths set out in c. 151B, must reflect that intent in unambiguous terms." The DISSENT argued that the matter was arbitrable because the contract language is "free of ambiguity."

WA - Provisions in arbitration agreement were unconscionable but severable.

Walters v. AAA Waterproofing (Washington Ct App 07/20/2009)
http://www.courts.wa.gov/opinions/pdf/62638-8.pub.doc.pdf

Walters sued the employer, asserting a claim for unpaid overtime compensation.  The trial court granted the employer?s motion to compel arbitration.  The Washington Court of Appeals affirmed, but the Washington Supreme Court remanded for reconsideration in light of Zuver v. Airtouch Communications, Inc., 103 P3d 753 (2004), and Adler v. Fred Lind Manor, 103 P3d 773 (2004).  On remand, the trial court again granted the employer?s motion to compel arbitration.  The Court of Appeals reversed, concluding that two provisions in the agreement (an attorney fee provision and a provision requiring arbitration to be held in Denver, Colorado) were substantively unconscionable and hence unenforceable.  The court determined that the unconscionable provisions were severable, and concluded Walters ?must submit to arbitration, but not in Denver, and not with the risk that he will have to pay the employer?s attorney fees if he loses.?

8th - Employee?s continued employment was acceptance of, and consideration for, arbitration program.

McNamara v. Yellow Transportation (8th Cir 07/01/2009)
http://caselaw.lp.findlaw.com/data2/circs/8th/082654p.pdf

McNamara sued the employer, asserting (among other things) a claim for violation of the Family and Medical Leave Act (FMLA).  The trial court denied the employer?s motion to compel arbitration.  The 8th Circuit reversed.

A primary issue on appeal was whether McNamara had consented to the employer?s arbitration agreement and was provided consideration for that consent.  The court noted, ?[a]pplying the laws of other states, we have held that continued employment after an employer imposes a term or condition upon employment demonstrates the acceptance and consideration necessary to form an enforceable contract.?  Observing ?[i]t is the well-established law of contracts in several Eight Circuit states, and we can discern no likelihood that South Dakota would deviate from this rule[,]? the court applied the rule under South Dakota law.  The court concluded that McNamara?s continued employment after imposition of the employer?s arbitration program provided the requisite elements of acceptance and consideration.  The court thus determined that McNamara was obligated to arbitrate his claims, and reversed.

*** Arbitration - Collective Bargaining Agreements ***

US - Cert granted on Section 301 suit: tortious interference and duty to arbitrate.

Granite Rock v. Teamsters (Certiorari granted 06/29/2009))
http://www.lawmemo.com/supreme/case/Granite

The employer sued a local union and an international union under Labor Management Relations Act Section 301(a) claiming that (1) the international union tortiously interfered with a collective bargaining agreement (CBA) between the employer and the local union, and (2) the local union breached the CBA by going on strike. The employer and the local union had reached a tentative new CBA which contained a broad arbitration clause and a no-strike clause. The employer alleged that the local union had ratified the CBA and then engaged in a strike which was in part led by a high official of the international union.

(1) The 9th Circuit held that the employer failed to state a claim against the international union because the tortious interference claim did not "arise under" the CBA between the employer and the local.  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)."

(2) As to the contract claim, the parties disagreed on the date of ratification. The district court held that issues of breach and damages had to be arbitrated, but that the issue of contract ratification was for the court to decide. The 9th Circuit held that the entire dispute should go to arbitration under the contract's arbitration clause, which covered "all disputes arising under this agreement." The court held that both parties consented to arbitration; the employer by suing under the contract, and the union by moving to compel arbitration.

The US Supreme Court granted certiorari to review the 9th Circuit's judgment, and will hear oral arguments in the fall of 2009.

PA - Reinstating teacher?s aide who overdosed in classroom violated public policy.

Westmoreland Unit v. Classroom Assoc (Pennsylvania Cmwlth Ct 07/08/2009)
http://www.pacourts.us/OpPosting/Cwealth/out/1746CD08_7-8-09.pdf

The public school district discharged an elementary school classroom assistant for overdosing at work on an un-prescribed Fentanyl patch.  A grievance arbitrator ordered the employee reinstated, and the trial court declined to vacate the arbitration award.  The court reversed, concluding that the award violated ?[the] fundamental public policy against allowing a person to be in possession of drugs or be under the influence of drugs while caring for, supervising or having custody of children.?

NJ - CBA gave arbitrators authority to decide whether probationary employee was entitled to grievance arbitration.

Amalgamated Transit Union v. New Jersey Transit (New Jersey 07/15/2009)
http://lawlibrary.rutgers.edu/courts/supreme/a-20-08.opn.html

The union grieved the dismissal of a probationary employee, but an arbitration panel determined that the employee was not entitled to arbitration under the applicable collective bargaining agreement (CBA) provisions.  The trial court affirmed, but the appellate court below reversed.  The New Jersey Supreme Court reversed, stating ?we conclude that the arbitration panel properly engaged in its appropriate role as interpreter of the CBA?s pertinent provisions.?  The court reasoned, ?[i]n short, whether a probationary employee could access the grievance procedure to challenge his termination was a matter the CBA authorized the arbitrators to decide.?  The court opined, ?[a]ny court looking at this CBA should have seen that it conferred broad interpretive power on the arbitrators and should have left the question for interpretation to the decisionmakers designated by this CBA.?

7th - Discharge under LCA denied while validity of LCA was under challenge.

United Food Workers v. Illinois-American Water (7th Cir 06/26/2009)
http://caselaw.lp.findlaw.com/data2/circs/7th/083144p.pdf

The union grieved the employee's last chance agreement (LCA) and discharge. The arbitrator decided in favor of the union, finding that the discharge provision of the LCA could not be exercised while a good faith challenge to the LCA was pending, and the trial court confirmed the award reinstating the employee. The 7th Circuit affirmed. The court found the arbitrator's award drew its essence from the LCA by concluding that the LCA contained an implied term that did not permit the employee's discharge while a challenge to the LCA's validity was pending.

NJ - Terms of a CBA prevail over conflicting terms in an individual employment contract.

Mount Holly Board v. Mount Holly Association (New Jersey 06/24/2009)
http://lawlibrary.rutgers.edu/courts/supreme/a-24-08.opn.html

The public school district discharged one of its custodians.  The custodian was discharged pursuant to the terms of his individual employment contract, but he was also subject to the terms of a collective bargaining agreement (CBA).  The union filed a grievance under the CBA, requesting arbitration.  The employer refused to arbitrate, and the trial court issued a judgment permanently enjoining arbitration.  The appellate court below affirmed.  The New Jersey Supreme Court reversed, stating ?[t]oday we reaffirm principles established in Lullo v. International Ass?n of Fire Fighters, 55 NJ 409,428 (1970), and Troy v. Rutgers, 168 NJ 354, 375-76 (2001), which concluded that when provisions in an individual employment contract conflict with the terms in a [CBA], and diminish or interfere with rights provided in a [CBA], the language in the individual contract must yield to the collective agreement.?  The court determined that the language in the employee?s individual contract conflicted with his CBA, and reversed.

DC - Award of retroactive pay drew its essence from CBA.

Verizon v. Communications Workers (DC Cir 07/10/2009)
http://caselaw.lp.findlaw.com/data2/circs/dc/087092p.pdf

The trial court granted the employer's motion to vacate that part of the arbitration order awarding retroactive pay beyond the 150 days before the arbitrator's decision. The DC Court reversed. The court found that the arbitrator's reading of the 150-day retroactivity provision of the collective bargaining agreement (CBA), in light of the employer's failure to give notice of the redefinition of a job title, drew its essence from the CBA.

PA - Interest arbitration clauses: one upheld, one not (2-1).

Commonwealth v. Pennsylvania State Troopers Assoc (Pennsylvania Cmwlth Ct 07/28/2009)
http://www.pacourts.us/OpPosting/Cwealth/out/105CD09_7-28-09.pdf

Following an impasse in collective bargaining, the Commonwealth and the State Troopers Association participated in interest arbitration. The Commonwealth appealed from the arbitration award. (1) The court upheld a provision allowing members with 15 years of service to be awarded an honorable discharge, holding that this was related to a retirement benefit and thus was a subject of bargaining. (2) The court vacated a provision under which members on union leave would be paid at a rate set by the Association, not exceeding the highest ranking member in the bargaining unit. The court found that this required the Commonwealth to violate a statute that controls how employees' retirement benefits are calculated.

The DISSENT would have upheld both provisions, and argued that the question of pay was separate from the question of what pension would be granted by the Retirement Board.

PA - Petition to review Act 111 arbitration award is denied.

City of Allentown v. IAFF Local 302 (Pennsylvania Cmwlth Ct 07/23/2009)
http://www.pacourts.us/OpPosting/Cwealth/out/2027CD08_7-23-09.pdf

The municipal employer appealed the trial court?s decision denying and dismissing the employer?s petition to review an arbitration award governed by the Policemen and Firemen Collective Bargaining Act (Act 111).  The court affirmed, concluding that the trial court didn?t err when it denied and dismissed the petition and ordered the arbitration panel to reconvene and determine the rate of pay for certain firefighters.  The court noted that the parties ?had mutually agreed to extend the provision of [the award], which set up the Panel to decide ?any disputes?....?

PA - Labor Relations Board cannot change grievance process from arbitration to another form of dispute resolution.

PA State Corrections Officers v. Commonwealth (Pennsylvania Cmwlth 07/13/2009)
http://www.pacourts.us/OpPosting/Cwealth/out/1941CD08_7-13-09.pdf

The police officers? association petitioned for review from a Pennsylvania Labor Relations Board interest arbitration award increasing retiree healthcare contributions, changing the method of dispute resolution from grievance arbitration to another form of dispute resolution, and allowing the employer to impose certain rules regarding workplace smoking.  The court reversed as to the grievance process, but otherwise affirmed.  The court reasoned that ?[t]he plain language of Section 903 [of the Public Employe Relations Act] makes arbitration mandatory for the resolution of any disputes or grievances arising out of the interpretation of the provisions of a collective bargaining agreement.?

PA ? School district violated CBA by unilaterally cuttting extracurricular activities after expiration of CBA.

Coatesville District v. Teachers Assoc (Pennsylvania Cmwlth 07/09/2009)
http://www.pacourts.us/OpPosting/Cwealth/out/2305CD08_7-9-09.pdf