Labor & Employment Law

US Supreme Ct argument on class action arbitration

Posted on September 28, 2009
The US Supreme Court announced today the schedule for oral arguments in Stolt-Nielsen S.A., et al. v. AnimalFeeds International Corp. - December 9 at 10:00 a.m. Eastern time. The parties in this case are parties to international maritime contracts that contain arbitration clauses...

Class action suit against National Arbitration Forum

Posted on September 17, 2009
A class action suit has been filed against National Arbitration Forum. Text of complaint: Magnone v. Accretive LLC, United States District Court, Central District of California A press release from the law firm filing the complaint: New York, NY ? September 15, 2009 ? The law firm of Milberg LLP has filed a class action lawsuit in the United States District Court for the Central District of California on behalf of all persons who used NAF's arbitration services during the period from June 1, 2006 to the present, inclusive (the ?Class Period?)...

Federal Service Impasses Panel appointments

Posted on September 16, 2009
The President has named seven highly-qualified individuals to the Federal Service Impasses Panel ? Federal Labor Relations Authority: Mary Jacksteit, Chair, Federal Service Impasses Panel ? Federal Labor Relations Authority Mary Jacksteit has over 20 years of experience in mediation, facilitation and negotiation working for non-profit organizations, government agencies and community organizations...

AAA confirms: No more consumer debt arbitration

Posted on July 23, 2009
We reported yesterday that the American Arbitration Association (AAA) announced that it will stop administering consumer debt collection arbitrations. Here is the AAA press release: Contact: Wayne Kessler, Vice President, Corporate Communications American Arbitration Association (212) 716-3975 kesslerw@adr...

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What? AAA stops consumer debt collection arbitration

Posted on July 22, 2009
The American Arbitration Association (AAA) announced yesterday that it will stop administering consumer debt collection arbitrations. The Wall Street Journal quotes an unnamed AAA official as saying that AAA will stop taking these cases "until some standards or safeguards are established...

National Arbitration Forum ends consumer arbitration business

Posted on July 20, 2009
National Arbitration Forum (NAF) is famous for providing arbitration services for disputes between consumers and credit card companies. NAF announced yesterday that it will "voluntarily cease to administer consumer arbitration disputes as of Friday, July 24, 2009...

Arbitration or ?Arbitrary?: The Misuse of Arbitration to Collect Consumer Debts

Posted on July 20, 2009
A House subcommittee hearing on July 22 will focus on business-consumer arbitrations relating to to debt collection.  The title of the hearing gives you an easy way to predict the outcome: ?Arbitration or ?Arbitrary?: The Misuse of Arbitration to Collect Consumer Debts? Text of the House press release: For Immediate Release: Contact: Nathan White (202)225-5871   Hearing: ?Arbitration or ?Arbitrary?: The Misuse of Arbitration to Collect Consumer Debts? Date: July 22, 2009, 2:00 p...

SCOTUS takes another arbitration case

Posted on June 21, 2009
The US Supreme Court has announced that it will decide whether the Federal Arbitration Act (FAA) permits arbitrators to impose class arbitration on parties whose arbitration clauses are silent on that issue. The case: Stolt-Nielsen S.A. v. AnimalFeeds International (certiorari granted 06/15/2009) [Details, Briefs] The parties in this case are parties to international maritime contracts that contain arbitration clauses...

CBA arbitration clause can waive individual right to litigate statutory civil rights claim

Posted on April 02, 2009
The US Supreme Court held today (5-4) 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. 14 Penn Plaza v. Pyett (US Supreme Court 04/01/2009) 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...

Bill stuffer cannot add an arbitration clause

Posted on March 19, 2009
When Santana Kortum-Managhan signed up for a credit card with the Herbergers department store, the agreement did not include an arbitration clause. However, it did contain a provision purporting to allow Herbergers to unilaterally change the agreement as it saw fit and specifying that a cardholder?s continued use of their Herbergers? credit card or other services constituted agreement to Herbergers? unilateral change in terms...

Arbitrator's manifest disregard of the law - a dying doctrine

Posted on March 17, 2009
Scenario: An individual employee and her employer agree to arbitrate the employee's claim against the employer. Perhaps Title VII, ADA, ADEA, whatever. They go to arbitration, and the arbitrator makes a decision. The loser reads the decision and sees a clear error in legal reasoning...

The Unconscionability Game: Strategic Judging and the Evolution of Federal Arbitration Law

Posted on March 11, 2009
Here is an interesting article by Professor Aaron-Andrew P. Bruhl at the University of Houston Law Center: The Unconscionability Game: Strategic Judging and the Evolution of Federal Arbitration Law, 83 New York University Law Review 1420 (2008). [PDF, 71 pages] We are seeing a lot of court cases in which individual employees resist having their claims sent to arbitration...

Vaden v Discover Bank: Federal courts "look through" arbitration petition to determine jurisdiction

Posted on March 09, 2009
The US Supreme Court has decided Vaden v Discover Bank (03/09/2009). [Details] [Full text of opinions] This was a unanimous decision on one point, and a 5-4 split decision on another point. Facts: Discover Bank sued Vaden in state court for nonpayment of her credit card balance...

Jurisdiction over non-signatory's appeal from an order denying a stay pending arbitration

Posted on March 03, 2009

Certiorari granted in Union Pacific v. Brotherhood of Locomotive Engineers

Posted on February 23, 2009
Five employees of the Union Pacific Railroad filed claims through their Union (the Brotherhood of Locomotive Engineers and Trainmen) contesting a discharge or discipline imposed by the Railroad. Rather than resolving the dispute over the propriety of the discipline, the National Railroad Adjustment Board concluded that the Union had failed to submit conclusive evidence that the parties had held a conference to attempt to resolve the dispute - a procedural prerequisite to arbitration - and thus the Board determined that it was required to dismiss the claim for lack of jurisdiction...

Justice Ginsburg nixes a stay of decision allowing class action arbitration

Posted on February 19, 2009
Today US Supreme Court Justice Ginsburg denied an application to stay a 2nd Circuit ruling that allows a class action arbitration. [Application for stay] In Stolt-Nielsen SA, et al., v. AnimalFeeds International (2nd Circuit 11/04/2008) the court was handling an appeal from a district court decision vacating an arbitration award...

Opaque "Make whole" award unenforceable, court remands to arbitrator for resolution

Posted on January 18, 2009
Due to budget cuts at the City of Oakdale, Kimberly Mossman lost her job. She claimed she had bumping rights under the City's personnel rules, and the parties agreed to arbitrate the dispute. An arbitrator decided that the City violated its own personnel rules...

LawMemo Arbitration Blog celebrates its fourth birthday

Posted on January 15, 2009
This week the LawMemo Arbitration Blog celebrates its fourth birthday.To each of you who reads this blog from time to time, you have my thanks. Writing entries for the blog has been a worthwhile experience for me. It has, like all public writing, forced me to be as clear as possible about my own thinking...

Reinstatement of employee held to be in excess of arbitrator's powers

Posted on January 07, 2009
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...

Unconscionability the Washington State way

Posted on September 01, 2008
Washington's approach to unconscionability is unusual because it is not necessary to establish both procedural unconscionability (e.g., disparate bargaining power, take-it-or-leave-it contract) and substantive unconscionability (a contract term that is one-sided or overly harsh)...

Spanish speaker bound by English agreement

Posted on August 29, 2008
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. Morales v. Sun Constructers (3rd Cir 08/28/2008)...

California reviews award for legal error

Posted on August 29, 2008
It was no surprise when the US Supreme Court held that the Federal Arbitration Act (FAA) does not allow a court to review an arbitrator's award for legal error, even if the parties contracted to have that happen. The FAA has limited grounds for court review, and legal error is not one of them...

Appeal order denying arbitration within 30 days

Posted on August 14, 2008
Garland 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...

USERRA claims are subject to arbitration

Posted on August 13, 2008
The 6th Circuit has decided that claimed violations of the Uniformed Services Employment and Reemployment Rights Act (USERRA) are subject to arbitration. Landis v. Pinnacle Eye Care (6th Cir 08/11/2008) Timothy Landis sued the employer, asserting (among other things) a claim for violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA)...

FMCS will change rules

Posted on August 13, 2008
FMCS - the Federal Mediation and Conciliation Service - plans to change some of its rules relating to arbitration services, and invites public comment on or before October 6, 2008. [Federal Register Notice]  In a nutshell, here are the changes: Increase the listing fee FMCS charges arbitrators - from $100 to $150...

Late filing divested arbitrator of jurisdiction

Posted on August 12, 2008
It has long been an axiom of arbitration law that it is for the arbitrator - not the court - to decide whether a union's grievance was filed on time. However, the arbitrator's decision on that question is still subject to some limited judicial review to decide whether the arbitrator's decision "draws its essence" from the collective bargaining agreement...

Antitrust and arbitration

Posted on April 26, 2008
Have banks conspired to force credit card holders to accept mandatory arbitration clauses, coupled with no-class-action provisions, in their cardholder agreements? That's the claim made by some cardholders against a bunch of banks in a lawsuit in federal court in New York...

Gentry: Cert denied

Posted on March 31, 2008
The US Supreme Court denied certiorari in Circuit City Stores, Inc. v. Gentry on March 31. (This case was Gentry v. Superior Court (Supreme Court of California 08/30/2007) (4-3 vote)). Robert Gentry brought a class action suit claiming that the employer had misclassified salaried customer service managers as exempt from the overtime provisions of the California Labor Code...

Hall Street: No expansion of FAA grounds for vacating award

Posted on March 27, 2008
The Federal Arbitration Act (FAA) contains specific grounds for a federal court to vacate or correct an arbitrator's award. None of the statutory grounds includes correcting the award if the arbitrator's conclusions of law were erroneous. In Hall Street Associates v...

Hall Street: Non-statutory grounds for review

Posted on March 27, 2008
Hall Street Associates v. Mattel [details] (US Supreme Court 03/25/2008) (6-3) held that "§§10 and 11 respectively provide the [Federal Arbitration Act's] exclusive grounds for expedited vacatur and modification" of an arbitrator's award. And some brave souls are asking "Do they really mean that? What about the various non-statutory grounds that courts seem to use for overturning arbitrators' awards, such as manifest disregard of the law, public policy, arbitrary and capricious, irrational?" Well, here comes the truth: "Public policy" is the easiest...

Supremes take another arbitration case

Posted on March 17, 2008
The US Supreme Court this morning granted certiorari in Vaden v. Discover Bank, et al. (Docket number 07-773). Briefs are available from LawMemo and SCOTUSblog. Oral arguments will be scheduled for the Fall of 2008. Discover Bank sued Betty Vaden in state court for nonpayment of her credit card balance...

Gentry at the US Supreme Court

Posted on March 15, 2008
Circuit City Stores has filed a petition for a writ of certiorari in Circuit City Stores, Inc. v. Gentry, known previously as Gentry v. Superior Court (California Supreme Court 08/30/2007) (4-3 vote) Briefs filed at the US Supreme Court are available at LawMemo and at SCOTUSblog...

ABA ADR Conference

Posted on March 11, 2008
The ABA Section of Dispute Resolution Presents The 10th Annual Spring Conference Pacific Currents: Sound Perspectives on ADR April 3-5, 2008Pacific Currents: Sound Perspectives on ADR is the premiere conference in the world for dispute resolution professionals and lawyers engaged in dispute resolution processes...

Preston v Ferrer: FAA preempts California statute

Posted on February 20, 2008
Preston v Ferrer (US Supreme Court, February 20, 2008). 8 to 1, US Supreme Court today holds that issues are to be decided by an arbitrator, not by the California Labor Commissioner. No surprises here. The official syllabus: A contract between respondent Ferrer, who appears on television as ?Judge Alex,? and petitioner Preston, an entertainment industry attorney, requires arbitration of ?any dispute ? relating to the [contract?s] terms ? or the breach, validity, or legality thereof ? in accordance with [American Arbitration Association (AAA)] rules...

Supreme Court: Can union waive individual's right to sue?

Posted on February 19, 2008
US Supreme Court will hear case on union's waiver of court forum for statutory claim. 14 Penn Plaza LLC v. Pyett (Certiorari granted February 19, 2008) [Details, briefs] When employees sued claiming age discrimination, the employer filed a motion to compel them to take the case to arbitration...

A new name

Posted on February 11, 2008
How exciting! A new name for this blog: LawMemo Arbitration Blog. (Was Ross' Arbitration Blog) It's all about branding. The brand is LawMemo. LawMemo is the name of the company, and the domain name. The words "Law Memo" are part of our three email products: Employment Law Memo NLRB Law Memo Arbitration Law Memo What could be more exciting than that?

How not to write an arbitration clause

Posted on February 04, 2008
Roberto Rodriguez sued his former employer, asserting state law claims for unpaid commissions. The employer moved to compel arbitration, but the trial court denied the motion. The Washington Court of Appeals affirmed, agreeing with the trial court that the arbitration agreement was inherently unfair and unenforceable...

No "manifest disregard" as to class "opt out" provision

Posted on February 04, 2008
An arbitrator's application of AAA's "opt-out" class certification provision (rather than FLSA's "opt-in" provision) didn't constitute "manifest disregard" of the law, says the 4th Circuit. Long John Silver's v. Cole (4th Cir 01/29/2008). Cole and her co-workers initiated class-wide arbitration proceedings against their employer pursuant to an arbitration agreement...

4th Birthday

Posted on January 24, 2008
Happy 4th Birthday to us.

Order vacating arbitration award reversed

Posted on January 06, 2008
The 6th Circuit applied its recent decision in Michigan Family Resources, Inc. v. Service Employees International Union, 475 F3d 746 (2007) which held that courts were without authority to overturn an arbitrator's award which was arguably construing or applying the contract and acting within the scope of his authority...

Arbitrator nixes mandatory flu shots for nurses

Posted on December 23, 2007
Virginia Mason Hospital implemented a mandatory flu immunization program requiring proof of flu vaccination as a "fitness for duty requirement" for all nurses. And for obvious reasons. Staff-to-patient transmission is prevalent in hospitals, and the hospital's previous voluntary immunization program resulted in only 55% of the staff being immunized...

Hall Street v Mattel: An FAA case? Or not?

Posted on December 01, 2007
It is better that I eat crow now, while it is young and tender. So let the feast begin. Up until now I have viewed Hall Street Associates v. Mattel [Details; all briefs] as an ordinary FAA case, raising the issue of whether courts must (or may) enforce a private arbitration agreement that purports to give a district court broader review powers than the FAA specifies...

Hall Street Associates v. Mattel: more briefs to be filed

Posted on November 16, 2007
The US Supreme Court on November 16 ordered supplemental briefing in Hall Street Associates v. Mattel Oral arguments were held November 7. The issue in this case is whether a federal court must (or may) enforce the parties' agreement that expands the scope of judicial review of an arbitration award beyond what is provided by the Federal Arbitration Act...

Acceptance by continuing to work

Posted on November 14, 2007
Lots of blog buzz about Seawright v. American General (6th Cir 11/13/2007), which held that Seawright accepted her employer's offer of an arbitration agreement by continuing to work. The case discusses some basics of contract law: offer, acceptance, consideration, unconscionability...

Justice Breyer: "The case of the century"

Posted on November 07, 2007
"The case of the century" - That's what Justice Breyer said about Hall Street Associates v. Mattel during today's oral argument. Click here for full transcript. At issue is whether a federal court must (or may) enforce an arbitration agreement that gives the court authority to review the arbitrator's award to see whether "the arbitrator's conclusions of law are erroneous...

Statute of limitations for vacating an award (ouch)

Posted on November 02, 2007
The Federal Arbitration Act has a three months statute of limitations for moving to vacate an award. This invites two questions, both of which were answered today in Webster v. A. T. Kearney, Inc (7th Cir 11/02/2007): When does the period begin? When does the period end? Webster took his age discrimination and breach of contract case to arbitration, and lost...

GENTRYfication of class action waivers

Posted on October 24, 2007
"Gentryfication" - A new word for a new legal theory. Or an old theory used in a new way. California has adopted a new, perhaps easier, way to attack class action waivers. The standard attack has been on the ground of unconscionability. The new attack is on the ground of public policy...

Hall Street: Contract vs. statute

Posted on October 22, 2007
One key feature of arbitration is that an arbitrator's award is "final." Courts do not review arbitration awards to be sure the arbitrator was correct in making fact-findings, or correct in interpreting a contract, or correct in applying the law. Federal Arbitration Act Section 10 specifies the grounds for vacating an award...

New ADR blog: "Indisputably"

Posted on October 10, 2007
Roll out the red carpet for the newest ADR blog on the block: Indisputably. Brought to you by four law professors: Andrea Schneider - Marquette Nancy Welsh - Penn State Michael Moffitt - Oregon Sarah Rudolph Cole - Ohio State Schneider Welsh Moffitt Cole Here's a sample of what they're up to: Fraud in Mediated Settlement Agreements Credit Card Companies and Arbitration Contingent fees for non-binding arbitrators? Are Defense Attorneys Shrewd or Overwhelmed?

Attacking arbitration of credit card disputes

Posted on September 27, 2007
Public Citizen has launched a huge attack against the use of arbitration to resolve disputes between credit card companies and consumers. The Arbitration Trap: How Credit Card Companies Ensnare Consumers (77 page report from Public Citizen) Mandatory Arbitration Enables Credit Card Companies To Trap Consumers (press release from Public Citizen) Bogus Attack on Arbitration Really about Plaintiffs? Lawyers? Right to Sue (press release from Institute for Legal Reform, an affiliate of the U...

Gentry - Opt-out clause is not a safe harbor for unconscionability

Posted on August 30, 2007
Giving an employee a 30 day period in which to opt out of an arbitration agreement will not automatically insulate an arbitration agreement from unconscionability analysis. Gentry v. Superior Court [Circuit City] (California 08/30/2007) (4-3) Gentry brought a class action suit claiming that the employer had misclassified salaried customer service managers as exempt from the overtime provisions of the California Labor Code...

Gentry - New attack on class action waivers

Posted on August 30, 2007
Shifting away from "unconscionability" doctrine, the California Supreme Court relied on "public policy" to say that some class arbitration waivers will be illegal. Gentry v. Superior Court [Circuit City] (California 08/30/2007) (4-3) Gentry brought a class action suit claiming that the employer had misclassified salaried customer service managers as exempt from the overtime provisions of the California Labor Code...

NASD arbitrators botched attorney fee award

Posted on August 10, 2007
A prevailing plaintiff is entitled to statutory attorney fees in an ADEA case, but NASD arbitrators acted "in manifest disregard of law" by capping the fee award by the amount agreed to in the attorney-client fee agreement. Bernhard Porzig claimed his employer discharged him in violation of the Age Discrimination in Employment Act (ADEA), and his claim went to arbitration by a National Association of Security Dealers (NASD) arbitration panel...

Continental v. ALPA - taking sides

Posted on June 01, 2007
I often get calls from reporters about cases, and am happy to help them out. The normal risk is that I'll get misquoted, and I can live with that. Yesterday's article in the Houston Chronicle, "Continental sues union over pilot who drank," was a big surprise because the reporter said I was taking sides with the airline...