Monday, January 20, 2014

Gelernter on In re Wal-Mart Wage and Hour Litigation FAA Case

GelernterThanks to Lise Gelernter (Teaching Faculty and Director, Externship Programs at SUNY Buffalo Law School) for bringing to my attention this interesting arbitration case decided by the Ninth Circuit on December 17th of last year and providing some commentary.

The case is In Re Wal-Mart Wage and Hour Litigation or Carolyn Burton v. Class Counsel.  The Ninth Circuit’s summarizes the case thusly:

[T]he panel held that a non-appealability clause in an arbitration agreement that eliminates all federal court review of arbitration awards, including review under § 10 of the Federal Arbitration Act, is not enforceable. 

Here is Lise's commentary:

The court reasoned that if the grounds for vacatur of an award cannot be expanded by contract beyond what is permitted by the FAA §§10-11 (per Hall Street), a contract cannot eliminate the federal judicial review of arbitration awards that is available under the FAA.  The Ninth Circuit cited to a Second Circuit case that had a similar holding:

Since federal courts are not rubber stamps, parties may not, by private agreement, relieve them of their obligation to review arbitration awards for compliance with § 10(a)” of the FAA.  Hoeft v. MVL Grp., Inc., 343 F.3d 57, 63–64 (2d Cir.2003), overruled on other grounds by Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008).  

This creates some tension with the United States Supreme Court’s strong push for honoring almost any term of an arbitration agreement, but since these holdings are grounded in the specific terms of the FAA, perhaps they are a bit more safe from reversal or even disagreement among other circuits.  

Lise points out that you can obtain this Ninth Circuit case by using the following link and selecting the Carolyn Burton case.

PS

http://lawprofessors.typepad.com/laborprof_blog/2014/01/gelernter-on-in-re-wal-mart-wage-and-hour-litigation-faa-case.html

Arbitration, Commentary, Wage & Hour | Permalink

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