Wednesday, August 27, 2014

NAA Approves Standards for Arbitrators in Employment Arbitration Proceedings

GuidelinesBarry Winograd sends word that:

the Board of Governors of the National Academy of Arbitrators has approved a set of Guidelines for professional standards for arbitrators in mandatory employment arbitration proceedings. The Guidelines were developed over a two year period by a special Academy committee of a dozen members.  The committee was chaired by Professor Theodore J. St. Antoine. 
From a review, you will see that the Guidelines improve upon current arbitration rules and ethical standards for mandatory employment arbitration cases. Topics that are covered include limits on the source of  an arbitrator's appointment, initial and continuing disclosure obligations, arbitrator disqualification, prehearing discovery, prohibited ex parte communications, monetary deposits, addressing issues of public law, and post-award clarification of a decision.   It is anticipated that the Guidelines will be helpful in promoting heightened standards of professional responsibility in a manner that will be fair and of benefit for both claimants and respondents in the field.


August 27, 2014 in Arbitration | Permalink | Comments (0) | TrackBack (0)

Friday, August 8, 2014

Fancy Footwork in Sidestepping Arbitration

A new piece by Jonathan R. Harkavy, Class Action Waivers in Title VII Cases after Italian Colors: Sidestepping the Individual Arbitration Mandate, recently  posted on SSRN:

The Supreme Court ruled in American Express Co. v. Italian Colors Restaurant, 570 U.S. -- 186 L. Ed. 2d 417, 133 S. Ct. 2403 (2013), that class action waivers ordinarily must be enforced under the Federal Arbitration Act even when the cost of an arbitration exceeds a claimant's potential recovery. This essay suggests, however, that employee waivers of class treatment in arbitrations are not appropriate for claims under Title VII of the Civil Rights Act of 1964 because of enforcement provisions unique to that statute. Because Congress has effectively set its legislative face against limits on employee access to class treatment, employee class treatment waivers are unenforceable as to Title VII status discrimination and retaliation claims.

 The article focuses on a number of provision in Title VII that the author argues show a commitment to judicial enforcement that the Court found absent in the Sherman Act in Italian Colors. These provisions are also largely absent from the ADEA, which draws its enforcement scheme from the FLSA, so the Gilmer decision doesn't, in theory at least, foreclose the argument.

As someone who has railed unsuccssfully against the arbitration tide in the past, I wish the argument luck without being super optimistic about its success!


August 8, 2014 in Arbitration | Permalink | Comments (0) | TrackBack (0)

Friday, August 1, 2014

Binding the United States to Arbitrate?

New ImageFalse Claims Act suits come in two flavors – those brought by “relators” on behalf of the United States to recover for harm caused by false or fraudulent submission of claims to the government and retaliation suits seeking damages as the result of adverse employment actions resulting from plaintiff’s whistleblowing activity.   31 U.S.C. § 3730(h)(1).   Of course, relators are typically, although not always, employees of the defendant since such persons are usually best positioned to know about fraudulent claims. And, of course, both kinds of claims can be, and often are, brought in the same action.

            Where, if at all, does arbitration fit into this structure? A recent case raised, but did not exactly resolve, the question. United States ex rel. Paige v. BAE Sys. Tech., 2014 U.S. App. LEXIS 9676, 9-12 (6th Cir. May 22, 2014), involved an effort by defendant to shunt an FCA retaliation claim into arbitration.  The Sixth Circuit refused to do so because the employment contract in question provided only for arbitral resolution of claims arising under that agreement. The FCA “is purely statutory and exists independent of the Agreement.” While the FCA bars retaliation with respect to “"terms and conditions of employment," it is not limited to breach of any given employment contract.  Thus, the arbitration clause simply did not reach the FCA claim at bar.

    If employment law teaches us anything, however, it is that employers are adept at responding to limiting judicial constuctions of the language of their agreements with workers, and we can be confident that, unlike the agreement in BAE, future arbitration agreements will explicitly require the arbitration of FCA claims. In fact, BAE’s form was odd because it did not refer to statutory claims at all, and the Sixth Circuit provided examples of language that apparently would reach such claims. 

    What happens when such clauses are written to embrace FCA claims?  Although a district court opinion in 2000 found such a clause invalid, Nguyen v. City of Cleveland, 121 F. Supp. 2d 643, 647 (N.D. Ohio 2000), more recent authority – in line with the Supreme Court’s enshrinement of the Federal Arbitration Act as a “superstatute”--  goes the other way.  For example, United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 381 (4th Cir. 2008), rejected the argument that the FCA barred waiver of rights to bring suit in federal court.

            Both BAE and Kellogg Brown & Root involved FCA retaliation claims.  In such cases the plaintiff is not merely a relator but, instead or in addition, is suing on his own behalf.  Even assuming that the FAA permits employees to agree to arbitrate their own claims, would an agreement to arbitrate (if broadly enough framed) bar court suit by the employee acting as a relator?

            This is a much more problematic scenario, both pragmatically and legally. Practically speaking, the FCA’s procedures cut against arbitration but probably don’t preclude it: a relator must file her complaint under seal, and the period of nondisclosure (in theory 60 days but almost always extended far longer, sometimes years) allows the Department of Justice to decide whether to intervene to pursue the litigation itself. Thus, the normal motion to stay a suit pending arbitration is not a good fit with this somewhat unusual procedure and filing for arbitration before bringing a qui tam suit might trigger the FCA’s public disclosure bar. See United States ex rel. Cassaday v. KBR, Inc., 590 F. Supp. 2d 850 (S.D. Tex. 2008). Further, should the DoJ in fact intervene, the suit becomes not only in name but also in reality one prosecuted by the government. It would seem that the original relator’s agreement to arbitrate, if not simply irrelevant at this point, could not limit the federal government’s right to proceed. EEOC v. Waffle House, Inc., 534 U.S. 279 (2002) (individual employee’s arbitration agreement could not limit EEOC’s right to seek victim-specific relief for such an individual).

            But what if Justice chooses not to intervene? In that case, the original relator (who, by hypothesis agreed to arbitrate all claims against the defendant) could be faced with a motion to stay pending arbitration, and the court would have to confront the conceptual objection. Put simply, that is that the government (represented by the relator) can’t be bound by an agreement entered into by the relator in her private capacity. And an FCA suit is not merely in the name of the government: even when the DoJ does not intervene, the bulk of any judgment will go to the United States Treasury and any settlement with the defendant requires Justice approval.

    Some analogies cut in this direction. For example, an employee cannot waive his or her right to report legal violations to the government. Any agreement to do so is null and void. E.g., EEOC v. Frank's Nursery & Crafts, Inc., 177 F.3d 448 (6th Cir. 1999). 

    But perhaps the closest parallel to the FCA situation came recently out of the California Supreme Court. Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (Cal. 2014), held that, while employees could agree to arbitrate their individual claims, they could not waive their right to bring a “representative action” under the state’s Private Attorneys General Act of 2004. Like the FCA, PAGA “authorizes an employee to bring an action for civil penalties on behalf of the state against his or her employer.” In this case for Labor Code violations. Again like the FCA, most of the proceeds of that litigation going to the state. The court held that an “arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy.”

    While Iskanian involved a federalism question absent where the FCA is concerned – whether the FAA deprived California of the power to deputize employees to prosecute Labor Code violations on the state's behalf – the result seems correct and applicable to the FCA.   Despite those problems, a recent district court decision in the FCA context held in favor of arbitration. Deck v. Miami Jacobs Bus. College Co., 2013 U.S. Dist. LEXIS 14845 (S.D. Ohio Jan. 31, 2013).  Contra Mikes v. Strauss, 889 F. Supp. 746 (S.D.N.Y. 1995) (dicta suggesting that the plaintiff, as relator, stands as a private representative of the government and, since the government was not a party to any arbitration agreement, a plaintiff, suing on the government's behalf is not bound).

    Assuming that FCA claims per se are not arbitrable but retaliation claims are, courts will have to struggle with questions of preclusion. The two claims in the two fora are almost certain to overlap, and, should the relator proceed with the arbitration (or the defendant move to compel arbitration), the arbitral award will almost always be issued before a court decision. Is it issue preclusive? A fascinating question for civil procedure buffs, but well beyond the scope of this post. FWIW, my instinct is that preclusion shouldn’t work. But, especially when it comes to arbitration’s reach, I’ve been wrong before!


Thanks to Angela Raleigh, Seton Hall class of 2016, for her help on this.


August 1, 2014 in Arbitration | Permalink | Comments (0) | TrackBack (0)

Thursday, June 12, 2014

Ninth Annual Colloquium Registration

WPBJust a friendly reminder from conference organizers, Melissa Hart and Scott Moss at the University of Colorado Law School, that the deadline to register to attend, and/or present a paper at, the 9th Annual Labor and Employment Scholars Colloquium is Friday, August 1, 2014.  The Colloquium is scheduled in Boulder between September 11-13, 2014.

 You can register and submit a paper proposal at this link:


 Please direct any questions to Melissa Hart (Melissa.Hart@Colorado.EDU) or Scott Moss (Scott.Moss@Colorado.EDU).


June 12, 2014 in About This Blog, Arbitration, Conferences & Colloquia, Disability, Employment Common Law, Employment Discrimination, Faculty Presentations, International & Comparative L.E.L., Labor Law, Pension and Benefits, Public Employment Law, Religion, Scholarship, Teaching, Wage & Hour, Worklife Issues, Workplace Safety, Workplace Trends | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 16, 2014

RIP Jack Dunsford

DunsfojeI'm sorry to report that John E. (Jack) Dunsford passed away earlier this week. Jack was emeritus at SLU, and the entire community here will miss him greatly.  Jack was a beloved colleague, a wonderful teacher, and a preeminent scholar and arbitrator. This is from his faculty page here:

John Dunsford is one of the nation's foremost arbitrators and labor law scholars. For more than four decades, labor unions and companies have entrusted him to settle their differences.

"I view the selection to arbitrate as a privilege," says Professor Dunsford. "One of the highest compliments you can receive is to be asked by parties with adverse interests to consider their differences and offer solutions. It's very rewarding."

Dunsford was a young college professor when the legendary scholar and arbitrator Leo Brown, SJ, tapped him in the early 1960s to be an apprentice.

""Among the many things Fr. Brown taught me was to try to understand the underlying problem of whatever case is given to you,"" Dunsford remembers. "Sometimes it's not apparent and other times you have to dig for it, but if you can help the parties resolve their dispute and do something to help their relationship along the way then you've done a lot."

As Professor Dunsford's reputation as a thoughtful and unbiased arbitrator grew, so did his client list. Over the span of his career, Dunsford has arbitrated nearly 1,000 disputes for groups such as U.S. Steel and the United Steelworkers of America and the National Football League and the Bert Bell Retirement and Pension Plan\; Southwestern Bell and the Communications Workers of America\; the International Revenue Service and the National Treasury Employees Union. He has arbitrated for virtually all of the U.S. airlines and their unions. Most recently, he participated in an interest arbitration between Alaska Airlines and the Transport Workers Union to set rates during the difficult economic times following 9/11. He is a permanent arbitrator for John Deere & Company and the United Auto Workers.

Professor Dunsford has held several leadership positions with the prestigious National Academy of Arbitrators, including serving as president in 1984-1985. In 2000, he was named a fellow in the College of Labor and Employment Lawyers. From 1987-1994, he directed the School's Wefel Center for Employment Law and remains a senior consultant. He was the McDonnell Professor of Justice in American Society from 1982-1987.

Except for a two-year break in the late 1970s when he practiced arbitration full time, Professor Dunsford has been teaching labor law at the School of Law since the early 1960s. In addition to a book, individuals and Unions, he has written numerous articles and chapters on labor law, arbitration, and the U.S. Constitution and personal freedom. Currently, his research interest is in the area of church-state relations, specifically tuition vouchers that allow parents the option of using state money to send their children to the schools of their choice.


April 16, 2014 in Arbitration, Faculty News | Permalink | Comments (1) | TrackBack (0)

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)