Symposium on Labor and Employment Arbitration

Jaime Fell and everyone at #PennStateLaw organized this symposium as well as any I’ve seen. I learned a ton from Mark Gough’s data, and the abilities of each of the other speakers--Jill Gross, Rick Bales, and Ted St. Antoine—to draw on their experiences in the trenches of arbitration as well as their broader perspectives as prolific scholars.

9:30 AM — Professor Theodore J. St. Antoine's Presentation on "Making Arbitration a Fair and Accessible Remedial Process"

10:00 AM — Professor Stephen Ware's Presentation on "Labor Arbitration's Differences"

10:30 AM — Professor Richard Bales' Presentation on "What Makes a 'Reasoned' Arbitration Award?"

11:15 AM — Lunch

12:00 PM — Professor Jill I. Gross' Presentation on "The Final Frontier: Are Class Action Waivers in Arbitration Clauses in Broker-Dealer Employment Agreements Enforceable?"

12:30 PM — Professor Mark Gough's Presentation on "Employment Disputes in Mandatory Arbitration and Civil Litigation: Comparing Outcomes and Stakeholder Perceptions."

My New Arbitration Book

Hot off the presses, a thoroughly updated Arbitration casebook by Stephen Ware and Alan Scott Rau:

Available from Amazon, this book discusses arbitration law and practice clearly and reliably, with engaging context ranging from partisan political battles to a Justin Bieber tweet. Balanced and comprehensive, the book covers major types of arbitration in the United States―commercial (including securities and trade associations), labor, employment, consumer, insurance, medical, and religious―as well as important types of international arbitration, such as commercial, maritime, investment, and sports. A carefully constructed teaching tool, Arbitration intersperses contemporary disputes―involving Uber’s app, Donald Trump’s confidentiality agreement, Jay-Z’s impact on arbitrator diversity, and the relationship between gender and biology―among:

• All the major Supreme Court cases from 1953 through 2019;
• Current case law on evolving topics, such as delegation clauses, contracts formed by clicking links on cell phones, and substitutes for the class actions limited by Concepcion;
• The full text of the Federal Arbitration Act, New York Convention, and Panama Convention;
• Chapters divided into short, coherent sections suitable for a single class session; and
• “Questions to Review and Synthesize” after the reading for each class session.

Worker's Claims Sent to Labor Arbitration if "Clear and Unmistakable" Collective Bargaining Agreement

This week the Second Circuit heard argument in Attending Homecare v. Abdullayeva, 2d Cir. App., 18-0651. The case turns on whether "clear and unmistakable" language in the collective bargaining agreement (CBA) requires employees to arbitrate their Fair Labor Standards Act (FLSA) claims.

While the district court said “The arbitration provision relied on is confusing. It does not clearly require Plaintiff to arbitrate her claims”, the Second Circuit might well find that the following CBA language clearly and unmistakably requires Plaintiff to arbitrate FLSA claims: “all claims brought by either the Union or Employees, asserting violations of or arising under the Fair Labor Standards Act ("FLSA'), New York Home Care Worker Wage Parity Law, or New York Labor Law (collectively, the "Covered Statutes"), in any manner, shall be subject exclusively, to the grievance and arbitration procedures described below.”

Bloomberg News story on this case includes analysis by me and Prof. Imre Szalai.

Sports Illustrated Teaches Arbitration 101: Football (Kneeling During Anthem) Kaepernick Arbitrator Denies Summary Judgment

Kaepernick alleges NFL teams conspired to keep him out of the league because of controversy surrounding his kneeling during the playing of the national anthem. The arbitrator, Penn Law Professor Stephen Burbank, denied the NFL's motion for summary judgment, so Kaepernick's grievance will proceed to hearing. As Sports Illustrated nicely puts it "the forthcoming trial won’t be a 'trial' as that term is commonly understood. There will be no jury, Burbank won’t be robed as a judge and it will all be conducted in private. This is because Kaepernick’s 'trial' is technically an arbitration hearing. The term 'trial' is used mainly out of convenience and because it will resemble a trial in many ways—evidence will be presented and attorneys for each side will question witnesses, who will testify under oath and swear to tell the whole and complete truth."

Summary judgment and other dispositive motions are generally considered less commonly granted in arbitration than litigation.

Supreme Court Enforces Employment Arbitration Agreement Waivers of Class Actions

The Court in EPIC SYSTEMS CORP. v. LEWIS predictably split 5-4 with conservative justices enforcing the class waivers and progressive justices dissenting. 

Russ Bleemer writes:

The long-running controversy involves arbitration provisions that kick in due to class waivers which prohibit employees from joining class processes—litigation or arbitration—in favor of mandatory, predispute, individualized arbitration to resolve disputes with their employers.

...

[Justice] Gorsuch’s [majority] opinion rejects a 2012 National Labor Relations Board administrative [decision] that held that FAA Sec. 2 removed mandatory individual arbitration from FAA application for employee agreements.  The Court’s opinion notes that the reasoning interfered with a fundamental attribute of arbitration.

After rejecting the Sec. 2 argument, Gorsuch dismantled the employees’ other arguments.  He develops the Supreme Court precedent concerning two clashing federal statutes, finding that the National Labor Relations Act, passed in 1935, didn’t override 1925’s FAA to require class or collective actions.

Circuit Split on Employment Class Waivers

The Seventh Circuit refused to enforce an arbitration agreement’s prohibition on class actions, which would have required the employee to individually arbitrate his wage and hour claim. The Seventh Circuit said the agreement’s prohibition on class actions violated the employee’s right to engage in concerted activity under the National Labor Relations Act.

In so ruling the Seventh Circuit joined the National Labor Relations Board but split from the Fifth Circuit.

Workplace Arbitration

Workplace arbitration is the subject of a new website ArbitrationInfo.com by the Center for the Study of Dispute Resolution at the University of Missouri School of Law and the National Academy of Arbitrators 

Precedent in Labor and Employment Arbitration

The Use and Abuse of Precedent in Labor and Employment Arbitration, 52 U. Louisville L. Rev. 431 (2014), by Michigan Law Professor Theodore J. St. Antoine.

The abstract:

Today I believe that the vast majority of arbitrators and advocates would agree that precedent has a salutary role to play in the arbitral process. The situation is different, of course, from the function of precedent or stare decisis (translated by a fabled country lawyer as “the mistake stands!”) in the judicial system. There, the hierarchy of courts calls for lower courts to treat as binding the decisions rendered by higher courts. And to maintain the benefits of uniformity, predictability, and stability in the legal system, even the superior courts are reluctant to overturn their own precedent except for some compelling reason.

Arbitration Award Based on Issue Preclusion (Collateral Estoppel) Enforced

A recent second circuit case confirmed an arbitrator's power to rule against a claim on the ground that of issue preclusion (collateral estoppel).  Specifically, the arbitrator found an Administrative Law Judge had already resolved the relevant issue against the claimant.  The case, American Postal Workers Union, AFL-CIO v. U.S. Postal Service, __F.3d__, 2014 WL 2535249 (2d Cir. June 6, 2014), is discussed here by Liz Kramer.

Collective Actions and Joinder of Parties in Arbitration

"Collective Actions and Joinder of Parties in Arbitration: Implications of DR Horton and Concepcion"

by UC Irvine Law Professor Catherine Fisk

Berkeley Journal of Employment and Labor Law, Vol. 35, No. 1, 2014, Forthcoming

Professor Fisk argues that employment agreements "to arbitrate individually are unenforceable under the National Labor Relations Act and the Norris LaGuardia Act."  She argues that such agreements are not covered by the Supreme Court’s reasoning in Concepcion and Italian Colors to the extent they prohibit joinder of fewer parties than would be required to bring a large class action and, therefore, remain protected by labor law.

Professor Fisk's article criticizes the Fifth Circuit’s Horton case and questions the practical wisdom of agreements requiring employees to pursue claims only as individuals. "State and federal courts universally allow liberal joinder of plaintiffs and defendants because it is more efficient and avoids some truly thorny issues about the preclusive effect of judgments."

The NLRB v. The Courts: Class Actions v. Arbitration

The NLRB holds for class actions

The National Labor Relations Board holds that individual employment agreements may not prevent employees from engaging in protected concerted activity in both union and nonunion environments.

The Board ruled in D.R. Horton that individual, as opposed to collectively bargained, arbitration agreements that are a condition of employment, may not bar collective action through both arbitral and judicial forums.

In contrast, most courts enforce arbitration agreements that foreclose class actions.

See for example, the Fifth Circuit.

This article "The NLRB v. The Courts: Showdown Over the Right to Collective Action in Workplace Disputes" by Boston College Professors Stephanie M. Greene & Christine Neylon O'Brien sides with the NLRB’s interpretation.   American Business Law Journal, Vol. 51, No. 4, 2014

11th Circuit Holds New No-Arbitration Agreement Supersedes Earlier Arbitration Agreement

 

Dasher v. RBC Bank (USA), __ F.3d __, 2014 WL 504704 (11th Cir. Feb. 10, 2014), is a class action part of the larger Checking Account Overdraft Multidistrict Litigation.  As the 11th Circuit explains, the original account agreement "contained an arbitration clause with terms broad enough to cover this overdraft fee dispute.” When the bank was acquired by another bank, it sent out to new account agreements with no arbitration clause.  In the 11^th Circuit, the bank cited a labor arbitration case stating there is “a presumption of arbitrability in the sense that an order to arbitrate . . . should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650, 106 S. Ct. 1415, 1419 (1986) (internal quotation marks omitted).  The 11^th Circuit rejected this argument by citing a labor arbitration case holding that this presumption of arbitrability applies when an “arbitration agreement is ambiguous about whether it covers the dispute at hand.” Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, __, 130 S. Ct. 2847, 2858 (2010). The FAA’s presumption is inapplicable in this situation, as courts are to apply “the presumption of arbitrability only where a validly formed and enforceable arbitration agreement is ambiguous about whether it covers the dispute at hand.” Granite Rock, 561 U.S. at __, 130 S. Ct. at 2858 (emphasis added).

More at Practical Law and Arbitration Nation

 

 

Precluding Class Actions

Homebuilder D.R. Horton's employment arbitration agreement precludes classwide arbitration.  The National Labor Relations Board found that this violated labor law.  The Fifth Circuit disagreed with the NLRB in reliance on the Federal Arbitration Act.

D.R. Horton, Inc. v. Nat’l Labor Relations Bd., __ F.3d __, 2013 WL 6231617 (5th Cir. Dec. 4, 2013).

Marty Heller says of the Fifth Circuit's decision it "very quietly overturned the NLRB" and "this decision provides an interesting conversation starter regarding the active (perhaps overactive) NLRB."