Monday, March 17, 2014

Horton, Once Again

New ImageYet another development in the much-watched DR Horton case, see here and here, as the NLRB has petitioned for en banc review.  

As you may recall, the Board found the company's arbitration agreement to violate its employees' rights to engage in concerted action.  The more sweeping ground was that the mandatory arbitration agreement foreclosed any right to concerted dispute resolution because, in addition to cutting off any judicial forum, it barred class or collective arbitration. While the decision did not foreclose a ban on class arbitration per se, it did find impermissible provision that would bar any pursuit of concerted legal remedies.

A panel of the Fifth Circuit rejected this argument while upholding the Board's second, less dramatic ground -- that the arbitration agreement could be reasonably read by employees to bar resort to the Board itself for unfair labor practices. The panel decision was 2-1, Judge Graves dissenting as to the class dispute resolution issue.

The thrust of the Board's petition is relatively simple: the panel majority's reliance on Supreme Court cases rejecting attacks on arbitration  (Gilmer, Concepcion, Italian Colors) is mistaken because these cases did not involve any infringement on a substantive right, and the Horton arbitration agreement infringes on the core susbtantive right underlying the National Labor Relations Act -- the right of employees to act concertedly. 

Makes sense to me, but, then, I'm a pretty easy sell on this question!



March 17, 2014 in Arbitration | Permalink | Comments (0) | TrackBack (0)

Sunday, March 9, 2014

Greene & O'Brien on D.R. Horton

Greene ObrienStephanie Greene and Christine Neylon O'Brien (both Boston College - Business) have just posted on SSRN their timely article (forthcoming Am. Bus. L.J.) The NLRB v. The Courts: Showdown Over the Right to Collective Action in Workplace Disputes. Here's the abstract:

When employees sign employment agreements, they are most likely not concerned about a mandatory arbitration provision forbidding them from engaging in class or collective actions. The United States Supreme Court has shown a strong preference for enforcing arbitration agreements, even when they foreclose rights to collective action. The National Labor Relations Board, however, has found 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. The Board reasons that Section 7 of the National Labor Relations Act mandates the preservation of rights to collective activity, and that the Supreme Court’s strong preference for individual arbitration must accommodate the text and legislative history of the Act. Despite the Board’s decision, most federal courts have declined to strike down mandatory arbitration agreements that foreclose collective action, even when it means undermining rights under federal wage and hour statutes as well as employees’ NLRA rights. The authors support the NLRB’s interpretation as the correct and preferred framework for analysis of NLRA challenges to forced individual arbitration. The authors maintain that the courts should recognize that the Board’s decision is consistent with Supreme Court precedent and adopt the reasoning of the NLRB to preserve substantive federal statutory rights of private sector employees.

I agree, but am not optomistic.


March 9, 2014 in Arbitration, Labor Law, Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 25, 2014

Updated edition of ADR in the Workplace

Cooper ADR 3d- Front CoverCongratulations to Laura Cooper (Minnesota), Dennis Nolan (South Carolina, Emeritus), Stephen Befort (Minnesota), and our own Rick Bales on publication of the third edition of their casebook (from the Labor Law Group), ADR in the Workplace. From West's announcement: 

West Academic has just published the Third Edition of ADR in the Workplace, a casebook that covers substantive and procedural issues of arbitration and mediation in both the union and non-union workplace.  On behalf of The Labor Law Group, authors Laura J. Cooper, Dennis R. Nolan, Richard A. Bales and Stephen F. Befort, have updated the 2005 Second Edition in many respects including recent court and arbitration decisions, new scholarly analysis, and current notes and questions.  Changes include new empirical and statistical information, a significant number of new labor and employment arbitration cases illustrating contemporary developments, a look at the effects of the recent upheavals in state regulation of public sector collective bargaining, and an expanded section on federal sector arbitration.  Among the book’s appendices is an extensive research guide on labor arbitration and alternative dispute resolution in employment.  West Academic plans to publish in Summer 2014, for professors adopting ADR in the Workplace, a book of materials and teacher’s guidance for classroom simulations of arbitration and mediation in both union and non-union settings.



February 25, 2014 in Arbitration, Books, Workplace Trends | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 5, 2014

Brown and Schneider's Report on ABA Dispute Resolution Section Survey on Gender Differences

GavelMy colleague Andrea Schneider (Marquette) and her co-author, Gina Brown, have posted on SSRN their new report: Gender Differences in Dispute Resolution Practice: Report on the ABA Section of Dispute Resolution Practice Snapshot Survey (Andrea also posted on this report at here).

Here is the abstract:

This report to the ABA Section on Dispute Resolution outlines the results of a survey to the membership concerning the use of neutrals in both mediation and arbitration on behalf of the Women in Dispute Resolution Committee (WIDR) of the Section of Dispute Resolution. The goals of the WIDR Committee was to change how neutral selection occurs in disputes, to increase the number of women who serve as neutrals, and to ensure that women and minorities were proportionally represented as neutrals. The first step, before suggesting changes, was to understand the current situation in the world of dispute resolution. In fall 2012, the Section of Dispute Resolution surveyed the lawyers belonging to the section to determine how mediators and arbitrators are selected in legal cases and the types of cases being resolved through the many available dispute resolution processes. Specifically, the survey was designed to examine who is being selected as a neutral, by whom, using what process, and for what types of cases. This report explains the methodology of the survey, the demographics of the respondents and neutrals involved in particular cases, and, most importantly, the information about neutral selection.

This survey provides clear data on women serving in neutral capacities and demonstrates several different potential avenues of change. Three preliminary conclusions drawn from this data are — first, the type and subject matter of the dispute clearly impacts neutral selection. As detailed above, certain practice areas are far more male and certain others are quite female. Second, it appears to matter how the neutral is selected in mediation. Networking resulted in only 29% women while provider lists resulted in an increased percentage of 47%. Finally, arbitration and mediation are not the same for gender integration. Arbitration seems to hold steady at 20% regardless of selection process and even decreases further in panel arbitrations.

Our recommendations included that clients and lawyers could be encouraged to think more broadly about who they use as neutrals. Particularly in three arbitrator panels, when considering equally qualified candidates, there should be a presumption that a woman be selected as part of a panel. Furthermore, neutrals need to be aware that personal networks still appear to be the primary source of referrals and that these networks need to be strengthened and broadened to include women. Provider organizations should be commended for improved gender balance in mediation. Courts, provider organizations, agencies, and other organizations that administer and oversee ADR programs should be encouraged to use lists and the lists themselves should be broadened to include more women. In arbitration, provider organizations (a) should also adopt the assumption that multi-arbitrator panels should include one woman when they are appointing the panel and (b) should have a higher percentage of women on their list so that these lists can do more than reflect the current situation. Additional efforts in certain practice areas (commercial, construction, etc.) are likely warranted with a targeted program to identify and encourage women and minorities to serve as neutrals.

This report's connection to labor and employment law is fairly straightforward: more and more workplace disputes are being decided through arbitration and mediation. Consequently, the importance of arbitrators and mediators themselves being reflective of the populations they serve cannot be understated.  This report and its recommendations takes an important first step in ensuring more gender diversity among arbitrators and mediators deciding workplace and other types of disputes.


February 5, 2014 in Arbitration | Permalink | Comments (0) | TrackBack (0)

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.


January 20, 2014 in Arbitration, Commentary, Wage & Hour | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 17, 2013

Forced Arbitration in the Workplace: A Symposium

ConfHere is information about a timely symposium at Berkeley Law on mandatory predispute arbitration in the workplace, a trend that has taken off with all the recent pro-arbitration Supreme Court opinions:

Please join The Employee Rights Advocacy Institute For Law & Policy (The Institute) and the Berkeley Journal of Employment and Labor Law (BJELL) on February 27, 2014 for Forced Arbitration In The Workplace: A Symposium at the University of California, Berkeley School of Law (Boalt Hall).

Convened by The Institute in collaboration with the Berkeley Journal of Employment and Labor Law, the Symposium is designed to bring together academics, practitioners, and others in the legal community to engage in a thoughtful dialogue and help raise awareness about forced arbitration of workplace disputes. Articles from the Symposium will be published in BJELL’s Spring 2014 issue.

Program highlights include a keynote address by former Secretary of Labor Robert B. Reich, the Chancellor’s Professor of Public Policy at the University of California, Berkeley.

You can register here, find more information here, and the symposium program is here.


December 17, 2013 in Arbitration, Conferences & Colloquia, Employment Common Law | Permalink | Comments (0) | TrackBack (0)

Monday, December 9, 2013

Speaking of Arbitration...

New ImageNow that exams are looming and law profs are desperately seeking distraction, a new SSRN posting by Tim Glynn and me may be of some interest -- or at least amusement.  

Warning: it's not your usual legal scholarship alth
ough it does try to make some serious points about the Supreme Court's arbitration jurisprudence and its dominant methodology of statutory interpretation. Click here.


December 9, 2013 in Arbitration | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 4, 2013

Arbitration Uber Alles, Again

New ImageThe Fifth Circuit just handed down its opinion in D.R. Horton v. NLRB, and, while the Board may have won the battle, it seems to have lost the war – absent en banc review or cert.

 As anybody who has suffered through presentations or conversations with Tim Glynn or me knows, Horton had enormous potential for changing the landscape of arbitration law, reflected in our recent article in Alabama.  In its decision, the NLRB ruled that the company’s “Mutual Arbitration Agreement” violated Section 7 and 8(a) for two reasons: first, by being drafted broadly enough to convey to a reasonable employee that she was giving up her right to file unfair labor practice charges with the Board; and, second, by cutting off the right of employees to pursue both class (or joint) actions and class (or joint) arbitration, it infringed employee rights to act concertedly for mutual aid and protection.

 The second ground was obviously more sweeping than the first, since it had the potential – at least in the employment arena – to undermine the Supreme Court’s validation in Concepcion of agreements barring class arbitration.

Before the Fifth Circuit, the Board won on the first ground and lost on the second.  Upholding the Board on the first ground is not insignificant -– management-side attorneys will be scurrying around for months reviewing and revising arbitration agreements to make more explicit that workers retain the right to resort to the NLRB. But far more important is the court’s rejection of the concerted action argument. 

To get to either of these issues, the Fifth Circuit had to wade through a variety of arguments about the composition of the Board that rendered Horton, including validity of recess appointments of Board members (the issue before the Supreme Court in Noel Canning), whether Member Becker’s appointment (even if valid) expired before Horton was handed down, and whether there was improper delegation of authority to the three member panel that decided Horton. I’ll spare the reader the technical discussion, but the Fifth Circuit either ruled in the Board’s favor  or dodged the questions thus allowing it to reach the merits.

 As to whether the arbitration agreement violated 8(1)(1) and (4) for “including language that would lead employees to a reasonable belief that they were prohibited from filing unfair labor charges,” the court upheld the Board. Even though the agreement did not explicitly address charges to the agency, it was written in language that could be reasonably construed to do so.  Again, the court’s upholding the Board’s conclusion on this ground is significant, although clearly of less import than if the court had also affirmed on the other ground.

As for the second ground, the opinion acknowledged “some support” for the “Board’s analysis that collective or class claims, whether in lawsuits or in arbitration” are protected concerted activity under the NLRA. But that conclusion did not take into account the Federal Arbitration Act, and whatever deference the Board may be owed in construing the NLRA in isolation was not appropriate where the FAA was concerned. Essentially treating the FAA as a “super-statute,” the court stressed the “barrier any statute faces before it displaces the FAA.”

For reasons not clear, the opinion then detours into an excursion as to whether the class actions  are a substantive or procedural right, not surprisingly finding them procedural. Why that would matter when Section 7 appears to largely protect rights that could be described as “procedural” (organizing) is not so clear.

At any rate, the court proceeded to consider two “exceptions” to the FAA command that arbitration agreements be enforced according to their terms – although I, at least, don't understand why they are two separate exceptions rather than simply a way of meshing two statutes which are at least in some tension with each other.

 The first exception, according to the court, was the FAA’s “savings clause,” which allows courts to refuse to enforce an arbitration agreement “upon such grounds as exist in law and equity for the revocation of any contract.”  Although the NLRA’s prohibition (much less the Norris-LaGuardia Act’s explicit declaration  that agreements to such effect are not enforceable) would seem to satisfy that clause, the Fifth Circuit’s “detailed analysis” of Concepcion led it to the opposite conclusion -- essentially because, while facially neutral between arbitration and litigation, the result would be to disfavor arbitration. The presumption seemed to be that employers would forego even individual arbitration if faced with class actions/class arbitration.     

 This is all somewhat head-scratching since it essentially bootstraps the conclusion it reaches.  The FAA’s preference for arbitration is undeniable, but, by the FAA’s own terms, limited. The limit would seem to have been reached by the boundary staked out by Norris LaGuardia and the NLRA. The preference, nevertheless, somehow o’er leaps the textual boundary that the statute itself established.

At any rate, the court moved on to the second exception – application of the FAA may be precluded by another statutory command (the NLRA). The Fifth Circuit begins, again, by treating FAA as a super-statute, and finding no explicit language trumping the FAA. It doesn’t explain why the Norris LaGuardia language “shall not be enforceable” doesn’t suffice as explicit language to the contrary, but presumably that’s because it only addresses “any undertaking or promise” (emphasis added) without mentioning arbitration.  (The court dismisses the Norris LaGuardia argument in a footnote without explaining why).

In any event, lacking explicit trumping language, a contrary “general thrust” of the NLRA is not sufficient, although an “inherent conflict” would be. Such a conflict, however, is lacking because arbitration is generally favored in the union context (of course, the cases cited involve arbitration under collective bargaining agreements where the union can be expected to keep employers in check) and because of “conceptual problems” whose significance is not so clear.

Judge Graves concurred with the affirmance of the Board’s decision but would have found that the arbitration agreement “interferes with the exercise of employees’ substantive rights” under Section 7.

One question that remains puzzling in the wake of the Horton opinion is the effect,, if any, of arbitration agreements that constitute unfair labor practices (as in Horton itself) on the validity of the arbitration agreement. An employer in the situation of Horton could, of course, modify its arbitration agreements to make sufficiently clear to employees executing them that they retain the right to file charges with the Board. But suppose employers don't, or suppose that the question of arbitration arises under an extant agreement that violates the statute as intepreted by both the Board and the Fifth Circuit?  Should a court being asked to stay a suit pending arbitration do so, thus "enforcing" an illegal agreement? Or should it find the whole agreement unenforceable because tainted by illegality? Or what?




December 4, 2013 in Arbitration | Permalink | Comments (1) | TrackBack (0)

Wednesday, October 30, 2013

Manifest Disregard

RevThanks to Jon Harkavy for sending us the unpublished Fourth Circuit case of Dewan v. Walia.  It's one of the extraordinarily rare cases in which a court has overturned an arbitration award for manifest disregard of the law.


October 30, 2013 in Arbitration | Permalink | Comments (0) | TrackBack (0)

Monday, September 30, 2013

NAA Arbitration Grants

NAAThe National Academy of arbitrators is currently accepting grant applications.  They look to be a great oppuortunity.  The info:
The National Academy of Arbitrators (NAA) is a professional association of labor and employment arbitrators in the United States and Canada.  The NAA’s Research and Education Foundation supports research and education relevant to labor and employment arbitration. The Foundation welcomes grant applications of up $25,000 for any of the following purposes:
  1. The study and understanding of grievance procedures, the arbitration process and other forms of labor and employment dispute resolution and the impact of law on these processes. 
  2. The impact of law on grievance and arbitration processes.
  3. The education and training of persons engaged in the resolution of labor -management and employment disputes.  Included are the funding of lecture programs, symposiums, conferences and training seminars. 
  4. The preparation and publication of books, symposium materials, articles, and audio-visual materials (e.g. films; websites; CDs) designed to enhance the competence of persons engaged in the arbitration and mediation of labor-management and employment disputes. 
  5. The preparation of material designed to keep arbitrators, mediators, and students of labor-management and employment arbitration abreast of current research into the arbitration process.
  6. The development of procedures or techniques for the resolution of labor and employment disputes in this and in other countries.

Detailed information on how to apply for the REF grant can be found on the NAA website

Questions about these grants can be directed to Allen Ponak, REF President, and



September 30, 2013 in Arbitration, Conferences & Colloquia, Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 17, 2013

BJELL Call for Papers on Forced Arbitration

BerkeleyThe Berkeley Journal of Employment and Labor Law (BJELL) and The Employee Rights Advocacy Institute For Law & Policy (The Institute) will be holding a symposium on February 27, 2014 at the University of California, Berkeley School of Law to examine forced arbitration of employment disputes and to explore the impact of this phenomenon on workplace rights. The goal of this symposium is to bring together academics, practitioners, and others in the legal community to engage in a thoughtful dialogue and help raise awareness about forced arbitration of workplace disputes.  The symposium is entitled Forced Arbitration in the Workplace: A Symposium.  Article drafts are due October 31, 2013; final articles are due January 3, 2014.  Here's the call for papers.  This looks fantastic!



July 17, 2013 in Arbitration, Conferences & Colloquia | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 25, 2013

Stone on Italian Colors

StoneKatherine V.W. Stone (UCLA) has a nice blog post at the Huffington Post on American Express v. Italian Colors Restaurant. A bit from the post:

Today the Supreme Court put another nail in the coffin of the withering body of consumer rights. In the American Express v. Italian Colors case, the Court furthered its trend that permits corporations to use arbitration to prevent consumers from challenging their unlawful conduct. The case arose when a group of merchants brought a class action against American Express alleging that the credit card company imposed on them an illegal tying arrangement, in violation of the antitrust law. The merchants' contracts with Amex contained a clause that required all disputes be subject to arbitration and that all disputes be arbitrated on an individual basis. It also prohibited parties from sharing the costs of any litigation or otherwise consolidating their legal claims. The merchants wanted to void the class action waiver and arbitrate as a group because it would cost many hundreds of thousands of dollars to mount an antitrust action yet the average recovery would be only $5000. Hence, they argued, without the ability to bring a class or collective action, they would lose their substantive rights. The Second Circuit agreed. It held that the class action ban could not be enforced "because to do so would grant Amex de facto immunity from antitrust liability by removing the plaintiffs' only reasonably feasible means of recovery."

The Second Circuit decision rested on an established Supreme Court precedent that says that under the Federal Arbitration Act, arbitration is only appropriate when it entails no loss of substantive rights. The Supreme Court first expressed this principle in 1985 in Mitsubishi Motors v. Solar Chrysler-Plymouth, a case in which a party was required to arbitrate a claim arising under the Sherman Antitrust Act. In Mitsubishi, the Court stated that arbitration could be ordered only if the litigant "may vindicate its statutory cause of action in the arbitral forum." The Court further explained that "[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute."

There is a lot more good analysis. You should read the whole thing.


June 25, 2013 in Arbitration, Beltway Developments, Commentary | Permalink | Comments (0) | TrackBack (0)

Thursday, June 20, 2013

U.S. Supreme Court Ruling in American Express Case Upholds Class Action Arbitration Waivers

4United States Supreme Court 112904Today, we have a guest post from Lise Gelernter (Buffalo) on the United States Supreme Court's latest decision on arbitration in American Express v. Italian Colors Restaurant.  The decision can be found  on the Supreme Court website here under the name of the case.

Here's Lise's overview of the decision:

The Court, four in the majority (Justice Scalia writing the decision), one in concurrence (Justice Thomas) and three in the dissent (Justice Kagan writing the opinion with Breyer and Ginsburg joining her – Justice Sotomayor took no part, presumably because she was on the 2d Cir. when it decided the case that the Supreme Court reviewed), said that the Federal Arbitration Act prohibited a court from invalidating an arbitration agreement that barred class actions, even if the practical effect was that the plaintiffs would find it impossible to vindicate their antitrust claim. 

An economic analysis had shown that the cost of an expert witness to show that American Express had used improper monopolistic power to impose fees on the plaintiffs would far exceed the economic recovery that any one individual plaintiff could hope to have.  As the dissent pointed out, the pluarlity and concurrence basically responded by answering that that was just “too darn bad.”
The impact in the labor and employment context is that unrepresented employees can not only be required to waive access to a court to vindicate statutory rights, but can also be required to waive their right to class actions.   Thus, minimum wage, employment discrimination and other types of employment actions will have to be pursued on an individual basis if that waiver exists in a pre-hire agreement. 

On the collective bargaining side of things, it will be interesting to see if an employer tries to compel individual arbitration of a contract grievance that was brought on behalf of a whole bargaining unit (e.g., a violation of a contractual provision on overtime scheduling).  I don’t know that it would make much of a difference in the long run in terms of the practical effect of an arbitration award, which probably means it is not worth it for an employer to pursue that kind of argument.

Great commentary, Lise, and looking forward to others' comments on this important new arbitration law case.


June 20, 2013 in Arbitration, Commentary | Permalink | Comments (2) | TrackBack (0)

Monday, June 10, 2013

SCOTUS OKs Class Arbitration

ScotusThe Supreme Court issued three opinions today, and among them was Oxford Health Plans LLC v. Sutter.

Here is the syllabus from the opinion:

Respondent Sutter, a pediatrician, provided medical services to petitioner Oxford Health Plans’ insureds under a fee-for-services contract that required binding arbitration of contractual disputes. He nonetheless filed a proposed class action in New Jersey Superior Court, alleging that Oxford failed to fully and promptly pay him and other physicians with similar Oxford contracts. On Oxford’s motion, the court compelled arbitration. The parties agreed that the arbitrator should decide whether their contract authorized class arbitration, and he concluded that it did. Oxford filed a motion in federal court to vacate the arbitrator’s decision, claiming that he had “exceeded [his] powers” under §10(a)(4) of the Federal Arbitration Act (FAA), 9 U. S. C. §1 et. seq. The District Court denied the motion, and the Third Circuit affirmed.

After this Court decided Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U. S. 662—holding that an arbitrator may employ class procedures only if the parties have authorized them—the arbitrator reaffirmed his conclusion that the contract approves class arbitration. Oxford renewed its motion to vacate that decision under §10(a)(4). The District Court denied the motion, and the Third Circuit affirmed.

Held: The arbitrator’s decision survives the limited judicial review allowed by §10(a)(4). Pp. 4−9.

(a) A party seeking relief under §10(a)(4) bears a heavy burden. “It is not enough . . . to show that the [arbitrator] committed an error—or even a serious error.” Stolt-Nielsen, 559 U. S., at 671. Because the parties “bargained for the arbitrator’s construction of their agreement,” an arbitral decision “even arguably construing or applying the contract” must stand, regardless of a court’s view of its (de)merits. Eastern Associated Coal Corp. v. Mine Workers, 531 U. S. 57, 62. Thus, the sole question on judicial review is whether the arbitrator interpreted the parties’ contract, not whether he construed it correctly. Here, the arbitrator twice did what the parties asked: He considered their contract and decided whether it reflected an agreement to permit class proceedings. That suffices to show that he did not exceed his powers under §10(a)(4). Pp. 4−6.

(b) Stolt-Neilsen does not support Oxford’s contrary view. There, the parties stipulated that they had not reached an agreement on class arbitration, so the arbitrators did not construe the contract, and did not identify any agreement authorizing class proceedings. This Court thus found not that they had misinterpreted the contract but that they had abandoned their interpretive role. Here, in stark contrast, the arbitrator did construe the contract, and did find an agreement to permit class arbitration. So to overturn his decision, this Court would have to find that he misapprehended the parties’ intent. But §10(a)(4) bars that course: It permits courts to vacate an arbitral decision only when the arbitrator strayed from his delegated task of interpreting a contract, not when he performed that task poorly. Oxford’s remaining arguments go to the merits of the arbitrator’s contract interpretation and are thus irrelevant under §10(a)(4). Pp. 6−9.

675 F. 3d 215, affirmed.

KAGAN, J., delivered the opinion for a unanimous Court. ALITO, J., filed a concurring opinion, in which THOMAS, J., joined.

I'll admit to being a bit surprised at the outcome here. The language of prior decisions on arbitration suggested that the Court thought arbitration and class actions were incompatible and that contractual language would have to explicitly allow class actions in arbitration before they could go forward. The contractual language in this case was not that clear. The arbitrator in this case interpreted this arbitration clause as allowing class actions (just one of the universe of civil actions) to proceed in arbitration:

No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration in New Jersey, pursuant to the rules of the American Arbitration Association with one arbitrator.

The rule on deferring to the arbitrator trumped what may be the majority of Justices' own view on class actions.




June 10, 2013 in Arbitration, Beltway Developments | Permalink | Comments (3) | TrackBack (0)

Tuesday, April 30, 2013

Slater on Interest Arbitration

SlaterJoe Slater (Toledo) just posted on SSRN his article (OSJDR) Interest Arbitration as Alternative Dispute Resolution: The History from 1919 to 2011. Here's the abstract:

This paper comes from a February 2012 Symposium, "The Role of ADR Mechanisms in Public Sector Labor Disputes: What Is at Stake, Where We Can Improve & How We Can Learn from the Private Sector." It discusses the history of an important form of alternative dispute resolution: the use of what is called “interest arbitration” to resolve bargaining impasses in public-sector labor relations. This process is used in many states as an alternative to strikes. While interest arbitration has been a crucial part of public-sector labor law and labor relations for decades, it has come under increased scrutiny recently. Indeed, in the wave of laws passed in 2011 restricting the rights of public-sector unions to bargain collectively, interest arbitration was repeatedly attacked, and in several states it was eliminated or restricted.

This paper gives a historical overview of the development of interest arbitration, discussing how and why it developed as it did. This development was neither inevitable nor “natural” in that many other western democracies generally allow public workers to strike. But only a few states in the U.S. allows any public workers to strike. Thus, the question is: why did U.S. law and policy develop the way it did? This paper traces the relevant history from 1919 through to the new, restrictive laws of 2011. It starts with the Boston Police strike of 1919 — a seminal event in the history of public-sector labor law, that had a profound and lasting impact on how U.S. policymakers felt about dispute resolution in public sector labor law. It then turns to the first public-sector labor law permitting collective bargaining — passed, ironically in view of recent events, in Wisconsin in 1959 — and describes how concerns about dispute resolution were central to debates over that law. The paper continues by explaining how interest arbitration in public-sector labor relations has evolved and how it has worked from the 1960s into the 21st century. Finally, the paper explores the very recent developments in this area in the laws of 2011.


April 30, 2013 in Arbitration, Labor Law, Labor/Employment History, Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, April 8, 2013

Brown on Comparative Alternative Dispute Resolution for Individual Labor Disputes in Japan, China and the United States: Lessons from Asia?

Brown_RonaldRon Brown (Hawaii) has recently published in the St. John's Law Review (86 St. John's L. Rev. 843) his new article: Comparative Alternative Dispute Resolution for Individual Labor Disputes in Japan, China and the United States: Lessons from Asia?

Here is the abstract:

Resolving individual labor rights disputes in East Asia and the United States in recent years has taken on new significance and prominence for both domestic and multinational corporations.  New legal approaches have been put into place in Japan, China, and the United States that deal with individual rights under either individual and/or collective contract or statutory labor disputes. The United States Supreme Court has approved the use of private arbitration under individual and collective contracts to resolve both contractual and statutory labor disputes. How these approaches compare may provide thought of reform for the U.S., no matter how unlikely.

This area of the law is, needless to say, developing at lightening speed.  Having myself learned about how arbitration works in Japan during my travels there, I know that Ron's piece will shed much needed light on how other parts of the world rely on ADR to resolve their legal disputes.


April 8, 2013 in Arbitration, International & Comparative L.E.L., Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 3, 2013

Recently Published Scholarship: St. John's LR Symposium


St. John’s Law Review, Volume 86, Number 2 - Spring 2012

Symposium: Worlds of Work: Employment Dispute Resolution Systems Across the Globe

  • Paul F. Kirgis & David Gregory, Introduction
  • Keynote Address: Theodore J. St. Antoine, The Moral Dimension of Employment Dispute Resolution, p. 391.
  • Samuel Estreicher, Strategy for Labor Revisited, p. 413.
  • William B. Gould IV, A Century and Half Century of Advance and Retreat: The Ebbs and Flows of Workplace Democracy, p.431.
  • Julius Getman & Dan Getman, Winning the FLSA Battle: How Corporations Use Arbitration Clauses to Avoid Judges, Juries, Plaintiffs, and Laws, p. 447.
  • George H. Cohen, Advancing Student Achievement in the United States Public Schools Through Labor-Management Collaboration: The FMCS’s Evolving Role in Education Reform, p.465.
  • David L. Gregory & Michael Harary, A Comparative Assessment of Labor and Employment Dispute Resolution in the United States and United Kingdom from 2006 Through 2011, p. 485.
  • Guido Carducci, The Importance of Legal Context and Other Considerations in Assessing the Suitability of Negotiations, Mediation, Arbitration and Litigation in Resolving Effectively Domestic and International Disputes (Employment Disputes and Beyond), p. 511.
  • Ronald C. Brown, Comparative Alternative Dispute Resolution for Individual Labor Disputes in Japan, China, and the United States: Lessons from Asia?, p. 543.
  • Elayne E. Greenberg, Overcoming Out Global Disability in the Workforce: Mediating the Dream, p. 579.
  • Mary Kalich, Do You Need A Doctor’s Note? Lay Testimony Should be Sufficient Evidence for FMLA Leave Unless Compelling Counter Conditions Exist, p. 603.
  • Jennifer Kelly, He Said, She Said: Sex Prosecutions and Spousal Privileges Under the Federal Rules of Evidence, p. 637.
  • Nicole Lapsatis, In the Best Interests of No One: How New York’s “Best Interests of the Child” Law Violates Parents’ Fundamental Right to the Care, Custody, and Control of Their Children, p. 673.
  • Daniel Mazzella, We’re on a Mission from God: Properly Interrupting RLUIPA’s “Equal Terms” Provision, p. 715.


April 3, 2013 in Arbitration, Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 19, 2013

Sullivan & Glynn on D.R. Horton

Sullivan GlynnCharlie Sullivan & Tim Glynn (both Seton Hall) have just posted on SSRN their article (forthcoming 64 Alabama L. Rev. (2013)) Horton Hatches the Egg:  Concerted Action Includes Concerted Dispute Resolution.  Here's the abstract:

As interpreted by the Supreme Court, the Federal Arbitration Act has largely swept all before it, validating agreements to arbitrate almost all disputes, including those involving claims under statutes regulating the employment relation. That era may be nearing an end. The National Labor Relations Board recently held in In re D.R. Horton that employers may not compel employees to waive their NLRA right to pursue collective legal redress of employment claims. Instead, the NLRA mandates that some mechanism for concerted dispute resolution remain available in arbitral or judicial forums. Unsurprisingly, this decision has generated an enormous amount of litigation. Although the case itself is pending before the Fifth Circuit, courts across the country are now confronting Horton-based challenges to the enforcement of mandatory arbitration clauses in employment contracts. To date, they have generally rejected these challenges on various grounds.

This Article will explore why these courts are wrong and why agreements that bar concerted dispute resolution are indeed invalid. The Board’s articulation of labor law rights ordinarily is entitled to judicial deference. But such deference has been called into question in Horton itself in part because of a recent circuit court decision invalidating recess appointments to the Board. As we will demonstrate, however, no deference is necessary because Horton reflects the correctnot merely a reasonableinterpretation of the NLRA as well as its predecessor, the Norris-LaGuardia Act.

Moreover, although the Supreme Court has seemingly treated the Federal Arbitration Act as a “super-statute” that overwhelms all before it, the Court has simultaneously denied doing more than applying what textual analysis and interpretive conventions require. The Horton question will force the Court to confront the collision between what it says and what it does. Established doctrines of statutory interpretation, recently and resoundingly reaffirmed by the Court, dictate a contrary result. Indeed, to the extent the concerted activity mandate of federal labor law conflicts with provisions of the FAA, the former clearly supersedes the latter.

With apologies to Dr. Seuss, Horton meant what it said and said what it meant. Courts must follow, one hundred percent.

For what it's worth, I agree completely with Charlie and Tim about what the Court should do, but I do not expect that this is what the Court will do.  As I have argued elsewhere, the Court is, in FAA cases, all too willing to subsume plain language to the Court's policy preference for arbitration.  I suspect that the Court will do as it did in Concepcion, and find that the D.R. Horton rule would have the effect of discouraging employers from promulgating individual employment arbitration agreements and therefore is inconsistent with the FAA. 

One might argue that Concepcion is distinguishable because it involved a potential conflict between the FAA and a state common-law doctrine (unconscionability) instead of a federal statute (NLRA).  But I wouldn't read too much into this given the express language in the FAA Section 2 preserving state common-law defenses to arbitration agreements.  If the Court in Concepcion was willing to erase that language, I see no reason why the Court will give the language of the NLRA any higher priority.


March 19, 2013 in Arbitration, Labor Law, Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 12, 2013

Oddball Arbitration

OddMany Workplace Prof Blog readers will recall Suja Thomas's presentation at January's AALS Conference / Employment Discrimination panel in which she argued that Twombly, Wal-Mart, and Ricci are oddball cases—cases with atypical facts in which the Court made broad changes to the law in a way that significantly affects cases with more typical facts.  Since then, she has written an article entitled The Oddball Doctrine: How Atypical Cases Make Bad Law in which she argues  that the Court should exercise restraint by not making legal changes in these types of cases.  During Suja’s presentation, it occurred to me that the Oddball Doctrine could apply to many of the Court’s recent arbitration decisions.

That inspiration has resulted in my most recent article (co-authored with Mark Gerano; forthcoming 30 Hofstra JLEL (2013)) Oddball Arbitration.  The abstract is below.  I've also posted over on PrawfsBlawg an attempt to crowdsource other areas of the law in which the Court may be using cases with oddball facts to shape the law under the political radar.  Check it out.

Congress passed the FAA in 1925 to resolve commercial disputes involving merchants. Since then, the Supreme Court has dramatically expanded the scope of the FAA and applied it in the employee and consumer settings. More recently the Supreme Court has chosen for its arbitration docket a set of cases with wholly atypical fact patterns in what appears to be a deliberate effort – successful so far – to advance its pro-arbitration policy agenda without provoking a political backlash. This article describes three oddball arbitration cases and argues that their atypical facts have permitted the Court to create legal rules that, while perhaps creating a just outcome in the oddball cases themselves, create unjust outcomes in the typical arbitration cases that much more commonly appear in the lower courts.


March 12, 2013 in Arbitration, Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, March 1, 2013

Oral Argument in Italian Colors

ItalianThe Supreme Court Wednesday heard oral arguments in Italian Colors, a consumer arbitration case that has thepotential to nuke one of the few remaining defenses to employment arbitration agreements.  Mark Gerano summarizes oral argument as follows:

On Wednesday, February 27 the Court heard oral arguments in the case American Express v. Italian Colors Restaurant.  (No-12-133).  The majority of the argument centered on whether the plaintiffs would be able to effectively vindicate their statutory rights under the Sherman Act without filing a class-action lawsuit in federal court.  The plaintiffs assert that in order to bring this case, they will have to hire experts at a very high cost – something that would not be cost-effective if they were forced to arbitrate claims individually.  Justice Kagan and Justice Ginsburg seemed concerned with the fact that foreclosing such a class action would effectively make the plaintiffs unable to vindicate their statutory rights under the Sherman Act because of the cost.

Justices Scalia, Kennedy and the Chief Justice did not display the same sympathy for the plaintiffs in this case.  Justice Scalia pointed out that the Sherman Act was created nearly forty years prior to FRCP Rule 23 allowing class actions.  He [suggested that the Sherman Act's enforced without class actions.]  Like Justice Scalia, the Chief Justice seemed skeptical that a class action was the only way for these plaintiffs to effectively vindicate their rights.  He urged that even without a class action, plaintiffs could still work together to share costs of experts and other parts of the litigation, thus significantly reducing their costs.  He repeatedly suggested using trade associations to compile the type of reports needed to show Sherman Act violations.  The [plaintiffs] countered by arguing that the cost sharing might be prevented because often times arbitration agreements contain confidentiality provisions that would prevent this type of sharing.  Nonetheless, the Justices suggested a number of other ways that the cost be kept to a minimum and did not seem persuaded that class action litigation was the only way this group of plaintiffs could effectively vindicate their rights.  Because of this strong push to finding a way other than class action for the plaintiffs to vindicate their rights, I think it is a safe bet that American Express will prevail in its petition.

Given what happened at oral argument, I think the best-case scenario is that the Court rules for American Express on the ground that plaintiffs have not shown an inability to vindicate their statutory rights, but will leave (at least for now) the vindication-of-statutory-rights defense intact.


March 1, 2013 in Arbitration | Permalink | Comments (0) | TrackBack (0)