Saturday, March 4, 2006

Fifth Circuit Weighs in on Burden Issue in Disparate Impact Cases

Ross Runkel writes today about a Fifth Circuit decision this past week concerning a burden of proof issue in disparate impact employment discrimination cases.

At issue is who has the burden of proof to show that there was a less discriminatory alternative practice after the defendant has proven that a policy causing a disproportionate impact on a protected class is justified by business necessity.

Siding with the majority of the courts on this issue, the Fifth Circuit found that plaintiffs have the burden to show a less discriminatory alternative practice in such cases.  The circuit split in favor of this holding is now 3-1. 

And for what it's worth, I've always taught that plaintiffs have the burden under such circumstances, analogizing the required showing to a pretext showing in an individual disparate treatment case (although I point out, of course, that the burden of proof shifts in DI cases to defendants unlike in DT cases where only the burden of production shifts).

Read Ross' excellent review of the case here, as well as Jottings By An Employer's Lawyer's take here.

PS

March 4, 2006 in Labor Law | Permalink | Comments (0) | TrackBack (0)

Wal-Mart Changes Course on Morning After Pill

Walmart_1_2 It was previously reported on this blog that Wal-Mart was being sued by a group of consumers in Boston for failing to  stock the morning after pills at its stores in Massachusetts. Massachusetts law requires that such contraceptive drugs be carried by all drug stores in the state.

Now, Wal-Mart has had a change of heart.  According to Yahoo! News (through the AP):

Officials of Wal-Mart Stores Inc. announced Friday the company will reverse its earlier policy and stock emergency contraception pills in all of its pharmacies effective March 20, saying the giant retailer could not justify being the country's only major pharmacy chain not to carry the morning-after pill.

The announcement comes after Massachusetts last month ordered the world's largest retailer to stock the so-called Plan B pill, following a lawsuit by three Boston women against Wal-Mart.

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[T]he company will maintain its conscientious objection policy, which it said is consistent with the tenets of the American Pharmaceutical Association. The policy, except where prohibited by law, allows any Wal-Mart or Sam's Club pharmacy employee who does not feel comfortable dispensing a prescription to refer customers to another pharmacist or pharmacy.

PS

March 4, 2006 | Permalink | Comments (0) | TrackBack (0)

Strikes and Lockouts Increased in 2005

Strikesaveourjobsbg HR.BLR.com reports:

The total number of major lockouts and strikes increased in 2005, but the strikes involved a smaller number of workers and fewer workdays of idleness than in 2004, according to the U.S. Department of Labor’s Bureau of Labor Statistics.

The total number of lockouts and strikes increased from 17 in 2004 to 22 in 2005. Major lockouts and strikes idled 99,600 workers with 1.7 million workdays of idleness in 2005, down from 171,700 workers idled and 3.3 million workdays of idleness in 2004.

The report covers strikes and lockouts involving 1,000 or more employees and lasting at least one shift.

Some more interesting facts include that:

The largest work stoppage in terms of idleness in 2005 was between Northwest Airlines and the Aircraft Mechanics Fraternal Association with 371,700 days idle.

And:

The longest work stoppage lasted 96 days and involved Asarco, Inc. and the United Steelworkers of America Locals 915, 5252, 88601, and 88602 and the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 75.

The largest work stoppage in terms of worker participation in 2005 involved the New York City Metropolitan Transit Authority and the Transit Workers Union, Local 100 and idled 35,000 employees.

All in all, although there were many more strikes and lockouts in terms of quantity in 2005, I'm not sure what conclusions can be drawn from these figures.

One possible conclusion is that workers have had more success in forcing their employers to get them back to work more quickly (the NYC transit strike being one such example).  Of course, the opposite conclusion, that employers have been more effective in their use of permanent replacements and have forced employees back to work on the employers' terms, is also plausible (although the NW mechanics strike seems to undermine this conclusion since they remain on strike in the face of the companies' very effective use of replacement workers).

Hat Tip: George's Employment Blawg

PS

March 4, 2006 in Union News | Permalink | Comments (0) | TrackBack (0)

Friday, March 3, 2006

Insensitive Employer of the Week

From WastedBlog.com (through WBALChannel.com):

A company that fired a 13-year employee as his wife lay dying of brain cancer has offered the Pennsylvania  man his job back.

Rug Doctor said the company has offered back pay and no break in seniority to former sales representative Bernard Chippie.

But it's unclear if he will take the carpet-cleaning company up on its offer.

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Earlier, Chippie said he notified his employer on Feb. 13 that he would not be able to finish his weekly route because he had just learned his wife had between two days and a week to live. He went to Kathleen Chippie's bedside at a hospice that day.

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He said that three days later, his boss demanded that he show up at work the next day. He said he was fired when he said he couldn't.

Three days after that, Kathleen Chippie died at the age of 56.

I think the word "jerks" is just too kind.

PS

March 3, 2006 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

Are Fines for Mine Operators Being Reduced?

Pickaxe_1
Here is a troubling story from yesterday's New York Times about Senators grilling federal regulatory officials for reducing fines levied against coal mine operators for unsafe operations.

According to the article:

Senators pressed federal mine safety officials today about why fines for unsafe practices have been reduced or not collected at all and why regulations intended to improve safety and the chances of rescue have been delayed.

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A data analysis by The New York Times found that the Bush administration has decreased major fines for safety violations since 2001 and in nearly half the cases not collected them at all.

David G. Dye, the acting assistant secretary of labor who runs the Mine Safety and Health Administration, noted that the agency had collected $25 million in fines last year and said the reductions were often the result of actions by independent administrative law judges.

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Before the disaster at the Sago Mine in West Virginia that killed 12 miners, the operator had been cited for 273 violations since 2004, but none of the fines exceeded $460. Critics of the industry have said at such low levels, it is cheaper for companies to pay the fines than to fix the problems in the mines.

My question: how many more miners have to die before the Republican officials at MSHA wake up and recognize that fines for unsafe operations must have more bite to have any impact on operations and that additional saftey mechanisms (including advanced two-way communication devices to locate trapped miners) must immediately be put in place regardless of cost?

I don't know how the fine bloggers over at Confined Space can put up with this Kafka-esque state of affairs in the field of American workplace safety and health on a daily basis.

PS

March 3, 2006 in Workplace Safety | Permalink | Comments (0) | TrackBack (0)

Is the Gender Revolution at Work Over?

Briefcase_1So asks Eduardo Porter in his piece for the New York Times yesterday, Stretched to Limit, Women Stall March to Work.

In the article, Porter observes:

For four decades, the number of women entering the workplace grew at a blistering pace, fostering a powerful cultural and economic transformation of American society. But since the mid-1990's, the growth in the percentage of adult women working outside the home has stalled, even slipping somewhat in the last five years and leaving it at a rate well below that of men.

While the change has been under way for a while, it was initially viewed by many experts as simply a pause in the longer-term movement of women into the work force. But now, social scientists are engaged in a heated debate over whether the gender revolution at work may be over.

Is this shift evidence for the popular notion that many mothers are again deciding that they prefer to stay at home and take care of their children?

Maybe, but many researchers are coming to a different conclusion: women are not choosing to stay out of the labor force because of a change in attitudes, they say. Rather, the broad reconfiguration of women's lives that allowed most of them to pursue jobs outside the home appears to be hitting some serious limits.

Of course, this is not the first time that the Times has covered work/family issues concerning women. A few years back, Loiuse Story wrote a controversial piece entitled, Many Women at Elite Colleges Set Career Path to Motherhood, which was criticized at the time for its faulty research methods.

More recently, there has been a rather nasty debate between Linda Hirschman and her critics about whether it is a mistake for educated women to remain at home with their kids.

I have a thought or two on this topic. First, I think that the pressures that used to exist for educated women to work at all costs are starting to dwindle and reach some form of equilibrium. Whereas in the 80s and 90s you were a traitor to the feminist cause if you were educated and dared to choose motherhood, I sense there is some "feminist fatigue" and it is now perfectly acceptable if upwardly-mobile women wish to spend parts of their adult years raising a family.  Consequently, I think Hirschman represents a more militant bygone era in arguing that educated women are wating their time attending to their motherly duties.

Second, to be educated, means understanding the worth of both being a mother and being a career woman.  It is not an all or nothing proposition, but one of balance. And as I wrote yesterday with regard to longer tenure requirements, different jobs are starting to be fashioned to permit women the chance to have families without falling too far behind in their careers.  That being said, I think Porter has a point when he says there are inevitably structural limitations to how much flexibility can be achieved between family and workplace obligations.

Nevertheless, there is some hope that American society will continue to recognize the importance of good workplace/family policies.  In this vein, there is still the need to advoate for more work flexibility legislation and proactive mother-friendly workplace policies.

Hat Tip:  Dana Nguyen

PS

March 3, 2006 in Commentary | Permalink | Comments (1) | TrackBack (0)

Melissa Essary Named Dean of Campbell

003393tMelissa Essary, currently at Baylor, has been named the new dean of the School of Law at Campbell University in North Carolina, effective July 1, 2006.  After graduating from Baylor Law School in 1985, Essary became a litigator for Vinson & Elkins, then returned to Baylor to teach employment discrimination and torts in 1990.  She has written on a wide variety of workplace issues, particularly workplace privacy.  To read more about her appointment, see Baylor's press release.

rb

March 3, 2006 in Faculty News | Permalink | Comments (0) | TrackBack (0)

Thursday, March 2, 2006

En Banc Fifth Circuit Vacates ERISA Standing Decision

Sitting en banc, the Fifth Circuit today took on the issue of standing under ERISA in the case of Milofsky v. American Airlines, No. 03-11087 (5th Cir., March 2, 2006).

At issue in the case was whether a subset of plan participants in a $uper $aver-A 401K Capital Accumulation Plan could sue plan fiduciaries under Section 502(a)(2) to recover losses to the $uper $aver Plan for breach of fiduciary duty. 

Specifically, plaintiffs alleged that these losses arose from the “fail[ure] to effectuate the timely transfer of plaintiffs’ account balances from the BEX [401(k)] Plan to the $uper $aver Plan as promised in numerous representations to plaintiffs . . . .”

In a remarkably short per curiam opinion, the Fifth Circuit disagreed with the district court (which had dismissed the case for failure to state a claim) that the plaintiffs did not meet notice pleading standards and also disapproved of the district court's conclusion that the plaintiff had to exhaust their administrative remedies under ERISA since "the plaintiffs do not seek the distribution of any benefits, but instead assert fiduciary breach claims not requiring exhaustion of administrative remedies."

Consequently, the court vacated and remanded the case to allow plaintiffs a chance to more fully develop their claims.

And although not directly mentioned in the en banc decision, the full Fifth Circuit disagreed with the panel opinion below not only on the notice pleading issue concerning fiduciary status, but more importantly on the issue of plaintiff's standing to bring a Section 502(a)(2).

Under the standing requirement established by Russell,  suits under ERISA § 502(a)(2) must inure to the benefit of the plan as a whole.  The panel opinion had found that, "this suit concerns individualized relief for the particularized harm suffered by a subset of plan participants and does not seek to vindicate the rights or interests of the plan as a whole."   

By finding that plaintiffs' claims were not Section 502(a)(1)(B) claims for benefits requiring exhaustion of  administrative remedies, the en banc Fifth Circuit emphatically disagreed with the panel holding regarding ERISA standing.

Hat Tip: Appellate Law & Practice

PS

March 2, 2006 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

Labor and Employment Law Faculty Lateral and Entry-Level Hires

Paul Caron writes over on the TaxProf Blog:

In keeping with prior years' tradition, I will post on April 2 (the day after the AALS drop-dead date for acceptance of visiting offers) a list of 2006-07 Tax Prof moves in these categories:

  • Entry-Level Hires
  • Promotions and Tenures
  • Lateral Moves
  • Visits
  • Retirements

Similarly, I would like to start a tradition of tracking Workplace Prof moves in these same categories. 

Please email me information for inclusion on this list.  Like Paul, I will wait until April 2nd (after the AALS visiting professor acceptance deadline) to post my list of 2006-2007 Workplace Prof moves.

PS

March 2, 2006 in Faculty News | Permalink | Comments (0) | TrackBack (0)

"Doh!": Stupid Job Interview Answers

DohhomerAccountemps interviewed 150 senior executives from some of the nation's 1000 largest companies about the most inappropriate responses they received from job applicants in interviews over the years.

Here are some of the classics:

1)   “An applicant stated that there was nothing I could tell him he didn't already know; he said he knew everything about our business.”
2)   
“A person argued that the requirements for hiring were wrong - and       then fell asleep.”
3)   
“The person invited me out for a drink after the interview.”
4)   
“The candidate told me that she didn’t want to work hard.”
5)   
“An individual applied for a customer service job, and when asked  what he might not like about the job, he said, ‘dealing with people.’”

Thanks to PlanSponsor for the pointer and a good laugh.

PS

March 2, 2006 in Commentary | Permalink | Comments (4) | TrackBack (0)

City: Smokers Need Not Apply

No_smoking_04From PlanSponsor.com:

SMOKE “SCREEN.”  The city of Atlantic Beach has enacted a policy preventing people who use tobacco products from getting a job with the  city.  According to Jacksonville, Florida's FOX television online, anyone that applies for a job with Atlantic Beach will be tested for nicotine.

There is even a chance that someone will not be hired if they test positive due to second hand smoke. Employees will also have to sign a statement promising they have not smoked in the last year and will not smoke while they are employed by the city, according to the news report.

I wonder whether a test for nicotine would be considered a medical examination, such that applicants would have protections under the Americans with Disabilites Act?  My hunch is that a nicotine test would be considered a drug test, which are not considered medical examinations for purposes of the ADA.

Might not there be a Fourth Amendment search and seizure issue if the employees being tested are not in safety-sentivie or confidential positions? I mean testing all municipal workers for nicotine seems awfully invasive and this does provide nearly the compelling facts that the custom agents in Von Raab did.

Moreover, this being a public employer, there could be some interesting constitutional privacy, expression, and association issues lurking just below the surface.  For instance, if you do not hire someone because they associate with someone who smokes, does that interfere impermissibly with their rights to association?

And do propspective public employee have a right to privacy, post-Lawrenec v. Texas, such that an employee's substantive due process rights must be balanced against the city's efficiency concerns?

All interesting questions that might be addressed if this policy is ever challenged in court.

PS   

March 2, 2006 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

H.R. Links

Tom Mighell provides a fantastic list of HR links in this month's Law Practice Today.  Thanks to Carol Furnish (Chase) for the tip.

rb

March 2, 2006 in Employment Common Law | Permalink | Comments (1) | TrackBack (0)

Making Tenure More Flexible

Teach
Interesting article out the other day at Inside Higher Ed about the University of Michigan adopting a more flexible tenure system for its professors.

Traditionally, and according to the standards adopted by the American Association of University Professors (AAUP), tenure requirements should be no longer than seven years.  However, those standards were put in place during the time of an almost all-male faculty and when those faculty members were the sole bread winners for their families.

Of course, in the 21st century, both male and female professors face competing family and work concerns and much legal research and scholarship has centered around balancing workplace and family obligations.  Especially for female faculty members, difficult choices often have to made between starting a family and satisfying tenure requirements.

By potentially extending tenure to 8 to 10 years, the University of Michigan would hope to provide the needed workplace flexibility to professors who want additional time to meet tenure obligations without compromising their ability to also have a family.

Under such a system, the tenure clock would not be completely frozen while the faculty member attends to family obligations.  As an instance, the article observes that:

Claire Duvernoy, an assistant professor of internal medicine, has been at the university since 1998, but is only a two-year-old on the tenure clock. Duvernoy has had two children since beginning as a faculty member, and has been working part time for the last six years. For those six years, her tenure clock has been frozen.

The options currently available for a faculty member working part time are either to stop the tenure clock completely and not receive credit for years of part-time work, or to let the clock continue as it would for a full-time worker, and risk going into tenure review with fewer years of full-time work. Duvernoy said that stopping the clock “removed the pressure,” but she has continued to publish and obtain grants, and feels that she should not be stuck in year two of her faculty career. Her only other choice would have been to let the clock continue as normal while she worked part time.

One of the proposals recommends allowing part-time work to be counted as part-time work, so a faculty member working 70 percent of full-time could make 70 percent of a year’s progress toward tenure review.

It will be interesting to see if Michigan actually adopts any of these new tenure requirements and whether other schools, recognizing the realities of the academic workplace, will soon follow suit.

PS

March 2, 2006 in Commentary | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 1, 2006

Sereboff: Solicitor General Argues for Expanding Scope of Equitable Relief Under ERISA

S03constitutional As discussed in a previous post, the United States Supreme Court has agreed to hear the Sereboff case to determine the appropriate scope of equitable relief available under Section 502(a)(3) of ERISA.  At stake is a plan fiduciary's ability to seek reimbursement for medical expenses paid by a plan to a plan participant who has also recovered damages from a third-party tortfeasor.  The question presented in Sereboff is whether the equitable relief provided for in Section 502(a)(3) encompasses such reimbursement claims.

The Solicitor General has now filed his brief squarely on the side of respondent in allowing such claims  to proceed under ERISA.  In short, the Solicitor General's argument can be divided into three parts.

First, the Great-West case recognized that equitable restitution is available under Section 502(a)(3). 

Second, a plan fiduciary seeking restitution of funds owed to it under a reimbursement clause constitutes a claim for equitable restitution as long as the "funds that are specifically identifiable belong in good conscience to the plan, and are within the possession and control of the defendant beneficiary."  Such is the case in Sereboff as opposed to the situation in Great-West.

Third, any remaining doubt about whether the plan is seeking appropriate equitable relief under ERISA should be resolved in favor of enforcement of the plan's terms since such enforcement is consistent with the underlying policies of ERISA in "provid[ing] effective enforcement of lawful plan terms that comply with ERISA."

Personally, I believe that the government has put forward a very solid and narrowly drawn argument about the appropriate scope of equitable relief under ERISA, one which the plan participants (seeking to avoid reimbursement in this case) will have a difficult time overcoming. 

And since I feel like living dangerously tonight, I am predicting a 9-0 unanimous verdict in Sereboff in favor of the respondent's and solicitor general's arguments.

PS

March 1, 2006 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

DOL Workshop in Nashville

Sealrev_4 The Department of Labor's Employee Benefits Security Administration is holding a free informational workshop to provide an educational seminar and one-on-one discussions regarding the Voluntary Fiduciary Correction Program.  The workshop will be held in Nashville on April 26.

rb

March 1, 2006 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

Estlund Accepts Offer From NYU Law

Eastlund Brian Leiter (Texas) reports on his Leiter's Law School Reports blog that Cynthia Estlund, a labor and employment law scholar at Columbia, is on the move.

Cindy currently holds the Isidore & Seville Sulzbacher Chair at Columbia Law School, but has now accepted a senior tenure offer to teach at the NYU School of Law.  She is the second professor from the labor and employment law world to leave Columbia for NYU in the last year.  Sam Issacharoff made the transition last year.

Cindy is the current chair of the AALS Section of Labor Relations and Employment Law.

Congratulations, Cindy!

PS

March 1, 2006 in Faculty Moves | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 28, 2006

Just Exactly How Common Are Blog-Related Firings?

Laptop_guy_2
Following up on a previous post I did a number of months ago about employers using social networking sites like Facebook or MySpace to find out more about prospective employees, Business Week Online has an interesting article on the growing use of such practices.

According to the article:

Getting fired for blog entries is so common now that it's come to be characterized by the term "dooced." Dooce.com, a blog kept by one of the dooced, has seen its traffic more than double over the past year, according to Web site ranker Alexa. One networker who asked not to be identified says she regularly peppers her entries with fiction so she can avoid being identified by her employer.

All of this is, of course, very interesting, but the article's conclusion that being fired for blogging has become "common" seems a tad overblown and supported with thin evidence.  I checked out the dooce.com site and although there is some talk about being fired for having a website or blog, there is certainly much else being discussed there as well.

In other words, I don't think there is a clear inference to be drawn about the number of recent blog firings based on the mere fact that the dooce.com site's popularity has grown dramatically over the past year.  It might just be that people love reading about other's misfortunes (especially when newer internet technology is involved).  And one anecdote from one "networker," of course, doesn't seal the deal either.

Nevertheless, there are still many employees who have been fired for their websites and blogging activities as I have documented here and here, and there are really interesting labor law implications surrounding blogging and employee workplace rights as discussed here.

In short, with now over 29 million blogs out there and some 5% of workers having blogs, there will inevitably continue to be clashes between employers and employees over blog use, both off and on the job.  It will be interesting to see in the months and years to come just how the various groups (i.e., employers, employees, unions, etc.) determine how to cope with the implications of this new digital medium.

Hat Tip: Execupundit.com

PS

February 28, 2006 in Commentary | Permalink | Comments (0) | TrackBack (0)

Posner on ERISA Fiduciary Status

Posner2
Judge Richard Posner of the Seventh Circuit Court of Appeals authored a recent ERISA opinion concerning whether an insurance carrier involved in handling claims under a disability plan was a fiduciary for purposes of ERISA.  The issue came up in a denial of disability benefits case in which the court was exploring whether the arbitrary and capricious standard for denial of plan benefits was the appropriate one in light of the entity handling claims under the plan.

In Rud v. Liberty Life Assurance Co. of Boston, 2006 WL 399149 (7th Cir. Feb. 22, 2006), although the employer acted as the plan administrator, Liberty Life handled claims under the disability benefits plan.  Plaintiff had his disability benefits terminated by Liberty Life and sued the insurer under both ERISA and breach of contract theories. After the case was removed to federal court, the court dismissed the plaintiff's denial of benefit claims under the arbitrary and capricious standard.  The plaintiff challenged the standard of review arguing that Liberty Life was neither a plan administrator, nor otherwise a fiduciary.

Not so said Judge Posner. Stressing the functional definition of an ERISA fiduciary, Judge Posner explained that since Liberty Life clearly exercised discretion in the administration of the plan assets, Liberty Life qualified as a fiduciary of the plan.  As such, the arbitrary and capricious standard applied, and unlike the SIxth Circuit case blogged about yesterday, the utilization of that standard signaled the doom of the plaintiff's case.

No fireworks here folks, but it is encouraging to see a clean ERISA federal appellate circuit opinion in an area in which such opinions are more the exception than the rule.

Hat Tip: ERISA and Disability Benefits Law Blog

PS

February 28, 2006 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

Breaking: Northwest Pilots Strike May Be Imminent

Northwestairlines_a320212_n353nw_786_474Last Update (3/3): Northwest and Pilots Reach Pay-Cut Deal

Update (3/1):  Northwest Flight Attendants reach deal; pilots still talking.

From Yahoo! News (through the AP):

The pilots union at Northwest Airlines Corp. said Tuesday that its members have authorized a strike if the carrier imposes its threatened pay-cut and work-rule changes.

More than 92 percent of pilots voted in favor of authorizing a strike, said Wade Blaufuss, spokesman for the Northwest branch of the Air Line Pilots Association.

He said more than 90 percent of Northwest's 4,851 eligible pilots voted.

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The vote authorizes union leaders to call a strike, but doesn't guarantee that they will. The union has said it wouldn't strike unless Northwest imposes pay-cut and work rule changes. Wednesday is the earliest that could happen. That's the day that New York bankruptcy judge Allan Gropper is set to rule on the airline's request to reject its union contracts with pilots and flight attendants.

The rest of the story is here.

Needless to say, a pilots' strike would be devastating and yet it is unclear whether the airline can successfully emerge from bankruptcy without additional concessions from its pilots.

Thing are certainly at their bleakest point for the Red Triangle Airline and for air travelers at NW hub cities like Memphis, Detroit, and Minneapolis.

PS

February 28, 2006 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

11th Circuit Puts Arbitration "Poor Losers" On Notice

B1

If we permit parties who lose in arbitration to freely relitigate their cases in court, arbitration will do nothing to reduce congestion in the judicial system; dispute resolution will be slower instead of faster; and reaching a final decision will cost more instead of less. This case is a good example of the poor loser problem and it provides us with an opportunity to discuss a potential solution.

So states the 11th Circuit's opinion today in B.L. Harbert Int'l, LLC v. Hercules Steel Co., No. 05-11153 (11th Cir., Feb. 28, 2006).

Responding to what it see as an increasing end around the arbitration process, the court suggested that it might be more willing in the future to use sanctions when losing parties appeal arbitration awards without any sound basis in law.

In this regard, the Court commented in this construction industry arbitration case:

This is a typical contractual dispute in which the parties disagree about the meaning of terms of their agreement. There are arguments to be made on both sides of the contractual interpretation issue, and they were made to the arbitrator before being made to the district court and then to us. Even if we were convinced that we would have decided this contractual dispute differently, that would not be nearly enough to set aside the award.

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The only manifest disregard of the law evident in this case is Harbert’s refusal to accept the law of this circuit which narrowly circumscribes judicial review of arbitration awards. By attacking the arbitration award in this case Harbert has shown at best an indifference to the law of our circuit governing the subject. Harbert’s refusal to accept that there is no basis in the law for attacking the award has come at a cost to the party with whom Harbert entered into the arbitration agreement and to the judicial system.

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Courts cannot prevent parties from trying to convert arbitration losses into court victories, but it may be that we can and should insist that if a party on the short end of an arbitration award attacks that award in court without any real legal basis for doing so, that party should pay sanctions. A realistic threat of sanctions may discourage baseless litigation over arbitration awards and help fulfill the purposes of the pro-arbitration policy contained in the FAA. It is an idea worth considering.

All this being said, the Court decided not to award sanctions against Harbert because it had not been on notice, prior to this opinion "that this Court is exasperated by those who attempt to salvage arbitration losses through litigation that has no sound basis in the law applicable to arbitration awards."

Parties to arbitrations subject to the FAA in the 11th Cir. (including arbitrations involving employment disputes) should now consider themselves so warned.

Hat Tip: Howard

PS

February 28, 2006 in Arbitration | Permalink | Comments (0) | TrackBack (0)