Friday, February 15, 2019
Dispatch from Lise Gelernter (Buffalo):
The issue of the FAA § 1 exemption for “transportation workers” has led to court decisions that I think take an over-narrow view of the exemption. FAA § 1 says that the FAA does not apply to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” And in Circuit City, the Supreme Court said that the group of “any other class of workers engaged in foreign or interstate commerce,” was confined to “transportation workers.” 532 U.S. 105, 119 (2001). The Court did not provide its own definition of what it considered “transportation workers,” but it did cite to and quote the D.C. Circuit’s opinion in Cole v. Burns International Security Services, 105 F.3d 1465 (D.C. Cir. 1997), which stated that transportation workers were workers who were “actually engaged in the movement of goods in interstate commerce.” 105 F.3d at 1471. The Cole case involved a security guard at a railroad station, Union Station in Washington, D.C. One issue in that case was whether the guard’s arbitration agreement was exempt from the FAA; the court held that the guard was not a “transportation worker” and therefore not exempt. It should be noted that Cole, the guard, did not work for the railroad, but for the security service hired by the station.
This has led many courts to find that for “transportation workers” to be exempt from the FAA, they must be involved in the “movement of goods” across state lines. The case of Kowalewski v. Samadarov has a good discussion of the debate over who is a “transportation worker.” 590 F.Supp.2d 477 (S.D.N.Y. 2008) (finding that car service drivers transporting passengers across state lines were not “transportation workers” exempt from the FAA). As Rick Bales has pointed out, this begs the question of what happens when an Uber driver transports a salesperson from New York to New Jersey carrying samples of her products. Moreover, why should Uber drivers be treated any differently than railroad engineers and airline pilots who carry passengers in interstate commerce? All airline and railroad workers should be exempt under FAA § 1 if the reference to “railroad employees” includes anybody covered by the Railway Labor Act (RLA), 45 U.S.C. §§ 151-187 (airline employees became subject to the RLA by virtue of an amendment adding §§ 181-187). The RLA provides that it applies to: “every common carrier by air engaged in interstate or foreign commerce, and every carrier by air transporting mail for or under contract with the United States Government, and every air pilot or other person who performs any work as an employee [for the carrier].” The RLA also goes beyond pilots – there are any number of RLA cases involving flight attendants, mechanics and other airline employees.
Justice Kennedy appeared to endorse the concept of FAA exemption for all employees covered by the RLA in Circuit City when he stated:
When the FAA was adopted, moreover, grievance procedures existed for railroad employees under federal law, see Transportation Act of 1920, §§ 300–316, 41 Stat. 456, and the passage of a more comprehensive statute providing for the mediation and arbitration of railroad labor disputes was imminent, see Railway Labor Act of 1926, 44 Stat. 577, 46 U.S.C. § 651 (repealed). It is reasonable to assume that Congress excluded “seamen” and “railroad employees” from the FAA for the simple reason that it did not wish to unsettle established or developing statutory dispute resolution schemes covering specific workers.
532 U.S. at 121. In TWA v. Sinicropi, the District Court stated flat out: “Contracts of airline employees, however, are exempted from the Federal Arbitration Act.” 887 F.Supp. 595, n. 13 (S.D.N.Y. 1995), aff’d on other grounds, 84 F.3d 116 (2d Cir. 1996), cert. denied, 519 U.S. 149 (1996).
It seems clear to me that the Appellate Division, First Department of the New York Supreme Court got it all wrong when it held that Jet Blue pilots were not exempt from the FAA because they were not “transportation workers” whose primary activity was moving goods across state lines. JetBlue Airways Corp. v. Stephenson, 88 A.D.3d 567 (N.Y. App. Div. 1st Dept. 2011). Instead, because they moved passengers, the court said, they could not claim the “transportation workers” exemption. This, of course, ignored the exemption for “railroad workers,” which I am pretty sure should mean everyone covered by the RLA.
I doubt that the Supreme Court would find that the FAA § 1 exemption is applicable only to airline or railroad employees who actually transport goods across state lines; I think they would have to find the exemption covers all RLA-covered employees (but of course, the Supreme Court has recently often done the unexpected). Therefore, if “transportation workers” are supposed to be people in the transportation industry who perform work similar to the airline and railroad employees covered by the RLA, why should there be a “goods” requirement for them?
Thursday, January 17, 2019
New Prime and the Gig Economy, Rick Bales (ONU).
New Prime and the Viability of State Arbitration Acts, Lise Gelernter (Buffalo, & NAA Member).
New Prime and Old Faults, Imre S. Szalai (Loyola New Orleans)
Tuesday, January 15, 2019
Two increasingly rare events occurred today in the same case: [a subset of] workers got a win, and the Supreme Court narrowed (yes, you read that correctly) the scope of the Federal Arbitration Act. Though the case at first blush appears narrow, it may have much broader implications in the Uber litigation.
The case is New Prime Inc. v. Oliveira. Dominic Oliveira was a truck driver for Prime under a contract calling him an independent contractor and containing an arbitration clause. Oliveira filed a class action alleging underpayment of wages. Prime moved to dismiss and send the case to arbitration, on two grounds: (1) the arbitration clause gave the arbitrator the authority to decide arbitrability issues -- so Prime argued the case should go straight to arbitration for the arbitrator to decide first the arbitrability issue and then, presumably, the merits; and (2) because Oliveira was an independent contractor, he was not covered by the FAA Section 1 exclusion of "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." Because, Prime argued, Oliveira wasn't excluded by Section 1, he was covered by the FAA, and his dispute should be subject to the same nearly irrebuttable presumption of arbitrability applied to all other contracts covered by the FAA.
The Supreme Court ruled 8-0 (Kavanaugh did not participate) for Oliveira on both counts. On the arbitrability issue, the Court characterized the "arbitrator decides arbitrability" clause as merely a specialized form of an arbitration clause. Like any other arbitration clause, the Court reasoned, this type of arbitration clause is not enforceable under the FAA if it's excluded by Section 1. And courts -- not arbitrators -- decide "substantive" arbitrability questions such as the scope of the Section 1 exclusion.
As noted above, Prime argued that the Court should interpret the FAA Section 1 exclusion as applying only to "employees", not to independent contractors. The Court, however, rejected that argument as inconsistent with the common understanding of those terms in the 1920s when the FAA was drafted and enacted. At the time, the Court said, "employment" was more-or-less a synonym for "work" -- and "work" is what Oliveira was doing regardless of whether he is today classified as an "employee" or an "independent contractor".
This is a rare win for workers under the FAA, but it's a narrow one. The Court already has restricted the Section 1 exclusion to transportation workers (Circuit City v. Adams). But Uber drivers are transportation workers, and there's a ton of pending litigation over whether they are employees or independent contractors. After New Prime, Uber drivers may be excluded by the FAA regardless of their legal designation.
Friday, December 21, 2018
Today our employment law provides workers with far more protection than once existed with respect to hiring, firing, salary, and workplace conditions. Despite these gains, continued progress towards justice is currently in jeopardy due to companies’ imposition of mandatory arbitration on their employees. By denying their employees access to court, companies are causing employment law to stultify. This impacts all employees, but particularly harms the most vulnerable and oppressed members of our society for whom legal evolution is most important. If companies can continue to use mandatory arbitration to eradicate access to court, where judges are potentially influenced by social movements, social movements will no longer be able to assist the overall progressive trend of our jurisprudence. While the phenomenon of mandatory employment arbitration is not new, recent Supreme Court opinions have encouraged an even greater number of employers to use this practice to force employees to take any disputes to arbitration, rather than to court. Focusing particularly on the #MeToo movement, this Article will consider this reality and its detrimental implications for the evolution of legal precedent affecting our most vulnerable employees.
Wednesday, October 10, 2018
Meanwhile, back in Kentucky, employers are thinking about next steps in the wake of Northern Kentucky Area Development District v. Synder, decided Sept. 27, 2018. There, the Kentucky Supreme Court held that the Federal Arbitration Act of 1925 ("FAA") does not preempt a Kentucky statute that, among other things, bans employers from making arbitration of employment disputes a condition of employment. Given how at least four US Supreme Court Justices may want to read the FAA, Synder might soon be headed to Washington.
The background: The FAA provides that an arbitration agreement "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The US Supreme Court today reads this as "a sort of 'equal-treatment' rule for arbitration contracts" that preempts any law that discriminates against arbitration, either on its face or covertly, such as by interfering with some fundamental attributes of arbitration. Epic Systems Corp. v. Lewis, 138 S.Ct. 1612, 1622 (2018).
In 1994, the Kentucky legislature enacted this statute:
[N]o employer shall require as a condition or precondition of employment that any employee or person seeking employment waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit to which the employee or person seeking employment would otherwise be entitled under any provision of the Kentucky Revised Statutes or any federal law.
Ky. Rev. Stat. § 336.700(2). About a year later, the Sixth Circuit read the FAA workers exemption, 9 U.S.C. § 1, to cover only transportation workers. Asplundh v. Tree Expert Co. v. Bates, 71 F.3d 592, 600-02 (6th Cir. 1995); see also Circuit City v. Adams, 532 U.S. 105 (2001)(adopting this view).
Some years later, the lawsuit: After getting fired, Danielle Synder sued her former employer, a State government entity, for violating State whistleblower and wage-and-hour law. The employer sought to compel arbitration pursuant to the mandatory arbitration clause in her employment contract. The lower courts denied the employer's motion on the ground that Ky. Rev. Stat. § 336.700(2) had rendered that clause unenforceable.
So, why doesn't the FAA preempt that statute? In Synder, the Kentucky Supreme Court reasoned that the statute satisfied the FAA's equal-treatment rule, for two main reasons. First, the statutes doesn't single out arbitration clauses. Rather, it treats arbitration as only an example of an agreement that tends to "diminish" a worker's rights, claims, or benefits ("waive, arbitration, or otherwise diminish"). Other examples include "an agreement whereby the employee waives the ability to file a [Kentucky Whistleblower Act] claim against the employer, or an agreement that limits the amount of damages the employee can recover against the employer." Slip Op. at 12. This reasoning implies that the FAA permits Kentucky's statute even though the US Supreme Court reads the FAA as endorsing the idea that employment arbitration does not tend to diminish workers' legal protections.
Second, the statute "only proscribes conditioning employment on agreement to arbitration, not the act of agreeing to arbitration." Slip Op. at 9. Thus, the statute does not "invalidate arbitration contracts because they are arbitration contracts; KRS 336.700(2) only invalidates arbitration contracts when the employer evidences an intent to fire or refuse to hire an employee because of that employee’s unwillingness to sign such a contract. This is not an attack on the arbitration agreement—it is an attack on the employer for basing employment decisions on whether the employee is willing to sign an arbitration agreement." Id. at 11. In this respect, the statute is a generally-applicable "antiemployment discrimination provision." Id. at 12. The premise here: Making employment arbitration mandatory (a condition of employment) isn't a fundamental attribute of such arbitration.
In so reasoning, the Kentucky Supreme Court did not follow the plaintiff's lead. She'd argued more narrowly: Because her former employer was a political subdivision of the State, the FAA couldn't be read to supplant statutory restrictions on her government employer's powers without raising concerns of "federalism and the Tenth Amendment." It's unclear how much that litigating position will affect the odds that, if asked, the US Supreme Court will hear this case.
Tuesday, August 28, 2018
Stephanie Greene and Christine O'Brien (both Boston College-Management) have just posted on SSRN their article (forthcoming Stanford J. Civil Rights & Civil Liberties) Epic Backslide: The Supreme Court Endorses Mandatory Individual Arbitration Agreements, #Timesup on Workers' Rights. Here's the abstract:
The United States Supreme Court dealt a serious blow to workers’ rights in Epic Systems Corp. v. Lewis, 584 U.S. __(May 21, 2018) when it held that employers may require employees to waive their rights to class or collective action. Employees had hoped the Court would find that mandatory individual arbitration provisions are illegal because Section 7 of the National Labor Relations Act guarantees employees the right to engage in concerted activities for mutual aid or protection. The Court, however, held that the Federal Arbitration Act requires arbitration provisions to be enforced as written. While the three cases before the Court involved wage and hour claims, the Court’s Epic decision impacts many other types of employment disputes that are diverted from courts to individual arbitration – including sexual harassment and other forms of discrimination in the workplace. In the era of #MeToo, some employers may choose to exempt sexual harassment claims from these mandatory private arbitration agreements due to public pressure to do the right thing. Nonetheless, mandatory arbitration provisions cover at least 60 million U.S. workers, and those requiring individual arbitration keep labor and employment claims hidden, and foreclose assertion of rights and achievement of appropriate remedies. This paper discusses the Court’s decision in Epic Systems, what worker rights remain after the decision, and what steps employee advocates and Congress might take to remedy the negative impact of the Court’s decision on workers’ right to act collectively.
I can't bear to write on employment arbitration any more -- theSCOTUS cases are just so bad on both policy and statutory-interpretation grounds. I'm glad others like Stephanie & Christine are fighting the good fight.
Tuesday, April 17, 2018
Lance Compa (Cornell ILR) sends us word of a report describing the "wrong turn" taken by an arbitration panel in the first-ever case decided under the labor chapter of a free trade agreement. The case involves worker's rights violations in Guatemala. Here's a press release describing the case and a report critical of the case co-authored by Lance:
A new report from the International Labor Rights Forum (ILRF) says that an arbitral panel’s ruling in the first case ever decided under the labor chapter of a free trade agreement “got it wrong” on workers’ rights violations in Guatemala. Written by three prominent international labor law experts, “Wrong Turn” edits down the 300-page decision into a reader-friendly 30 pages, and provides analysis and commentary at key points showing the arbitral panel’s flawed approach and conclusions.
Following a 2008 complaint by the AFL-CIO and a coalition of Guatemalan unions, the United States government initiated the arbitration case in 2011 under the labor rights chapter of the 2005 U.S.-Central America Free Trade Agreement (CAFTA). That chapter defines as its central purpose to “protect, enhance, and enforce basic workers’ rights.” The United States charged Guatemala with failing to effectively enforce its national labor law to halt mass firings of workers who try to form unions and to remedy minimum wage, health and safety, and other violations of employment standards. Effective enforcement of national law is a central obligation of the CAFTA labor chapter.
In their report, Lance Compa of Cornell University, Jeff Vogt of the Solidarity Center, and Eric Gottwald of ILRF note that two of the three members of the arbitral panel were prominent trade lawyers who normally represent multinational companies in commercial disputes, but have no labor experience or expertise. As a result, “The decision is based on a narrow, trade-oriented analysis divorced from labor law reality - particularly in a developing country like Guatemala.”
Importantly, the arbitral panel did find that Guatemala repeatedly failed to effectively enforce its labor law. However, the panel found that such failures did not occur “in a manner affecting trade,” as required by the labor chapter, leading the arbitrators to rule in favor of Guatemala. In contrast, the report’s authors argue that, “A rights-focused analysis would say the CAFTA labor chapter is meant to protect workers’ fundamental rights, not competition in the free trade area.”
Gottwald, Vogt and Compa suggest that the arbitral panel erected an impossibly high barrier to workers prevailing in such cases. All violations and the failure to enforce labor laws occurred in trade-related sectors such as apparel manufacturing, agriculture, and shipping, but the panel found that this was insufficient to meet the “manner affecting trade” requirement. The arbitrators demanded evidence that companies took advantage of the government’s enforcement failures to gain a price advantage in the marketplace. But such information, argue the report authors, is impossible to obtain without subpoena power – a tool that is not available in the CAFTA dispute resolution system.
The authors also decry the failure of the U.S. government to present evidence on widespread violence against trade unionists in Guatemala, including death threats and assassinations – an important part of the unions’ original 2008 complaint. Reflecting this failure, they note that “In the full 299-page decision of the Panel, not once does the word ‘violence’ appear.”
The ILRF report concludes with recommendations to address the “wrong turn” in the CAFTA arbitration decision. They include requiring arbitrators to be experts in labor law and labor relations and to consider reports and decisions from international human rights bodies, not just the WTO, in their decision-making process; allowing trade unions and victimized workers to participate in arbitration proceedings, correcting the interpretation of the “manner affecting trade” clause, and making the labor chapter of all trade agreements a human rights chapter.
Here is the full report.
Saturday, October 14, 2017
Over at Indisputably, Sarah Cole has a great post about the Fifth Circuit's rejection of a preliminary injunction by the NFL Players' association that would have prevented the suspension of Cowboy running back Zeke Elliott. As Sarah points out, the arbitration clause that the NFL and the Players' Association agreed to is bizarre, but the Players' Association must follow the procedure it agreed to before challenging the outcome in court.
In other news, an unfair labor practice charge has been filed against the Cowboys (and owner Jerry Jones) for threatening to bench players who kneel during the national anthem to protest race discrimination and violence. As Ben Sachs points out over at onlabor, this is a possible ULP for interfering with the players' protected concerted activity under the NLRA. In a separate onlabor post, Noah Zatz makes a convincing case that any benching would violate the opposition clause of Title VII's anti-retaliation provision.
Wednesday, September 27, 2017
Consistent with Imre's post below, Alex Colvin (Cornell ILR) provides this news of his own study:
In a nice conjunction with the D.R. Horton cases arguments coming up, I also have a report out today on the use of mandatory employment arbitration clauses, as well as the incidence of class action waivers. The study was sponsored by the Economic Policy Institute (EPI).
This is a nationally representative, establishment-level survey of 628 employers. It allows me to get a measure of the percentage of employees covered by mandatory arbitration. The key take-away is that I find that 56.2 percent of private sector nonunion employees are covered by mandatory arbitration. Of the employees covered by mandatory arbitration, 41.1 percent have class action waivers in the procedures.
Although the methodology is different, there is some nice consistency between the results of Imre’s study and mine. His focus is on the Fortune 100 companies, where my reading is that he finds 80 use mandatory arbitration for some workers using a broad measure or 66 using a narrower measure. In some additional analysis of my survey results, I found that larger employers were more likely to use mandatory arbitration, with 65.1 percent of employers with 1000 or more employees having mandatory arbitration procedures. Our numbers are also generally consistent with regard to the proportion of mandatory arbitration procedures that include class action waivers. So my take-away is that the two studies' results reinforce the validity of each other’s findings.
In anticipation of the D.R. Horton cases to be argued next week, I am publishing a report about the use of arbitration clauses for workplace-related disputes. The key finding from my study, which is based solely on publicly-available data, shows that 80 of the Fortune 100 companies, the largest companies in America by revenue, have used arbitration agreements for workplace-related disputes since 2010, and almost half of these 80 have class waivers.
My study is limited in scope; I was just trying to get a better sense of the possible impact of the D.R. Horton cases and capture a snapshot of the use of arbitration clauses in the workplace among the top companies in America.
Here’s an early link to the study, which will go live tomorrow through the Employee Rights Advocacy Institute, of which I serve as a board member:
I hope these limited findings may be of some value and provide some context for the ongoing debates about the use of arbitration. I know I sound like a broken record sometimes, but I firmly believe the Federal Arbitration Act (FAA) was never intended to cover employment disputes. Based on the original purpose, history, and text of the FAA – and if the Supreme Court were writing on a clean slate, there should be no debate that the employees would win the D.R. Horton cases. Unfortunately, the Supreme Court has long abandoned any analysis of the history and text of the FAA. To paraphrase Justice O’Connor, the FAA as interpreted today is now solely a creation of the Supreme Court’s own imagination. I hope I am pleasantly surprised in a few months when the decisions are issued. However, if the Court rules in favor of the employees, it would be the first time in decades that the Supreme Court has significantly cut back on its expansive interpretations of the FAA. My bet is that the employers win, and the Court will unfortunately continue chipping away at our ability to access the judiciary.
Monday, June 19, 2017
Over at On Labor, Vivian Dong describes the switch:
[T]he Department of Justice announced last Friday that it will switch over its support in the upcoming Supreme Court case, NLRB v. Murphy Oil, from the National Labor Relations Board to Murphy Oil. The issue in the case, set for the 2017 October term, is whether arbitration agreements with individual employees that ban employees from pursuing employment claims on a class or collective basis (class action waivers) violate the NLRA. Under President Obama, the DOJ wrote an amicus brief in support of the NLRB, which had ruled that such arbitration agreements did indeed violate the NLRA. But, as the DOJ states in its re-filed brief, “after the change in administration, the office reconsidered the issue and has reached the opposite conclusion.” The DOJ now argues that “nothing in the NLRA’s legislative history indicates that Congress intended to bar enforcement of arbitration agreements like those at issue here.” NLRB v. Murphy Oil was consolidated with Epic Systems Corp. v. Lewis (the 7th Circuit opinion that caused the circuit split), and Ernst & Young LLP v. Morris—all three cases received significant attention when their opinions were issued. Whatever the outcome, the case will be a landmark case for employment law.
Saturday, June 17, 2017
Congratulations to Steve Ware (Kansas) and Ariana Levinson (Louisville) on the publication of their new book Principles of Arbitration Law (Concise Hornbook Series, available July 2017). Here's the publisher's description:
The Concise Hornbook Principles of Arbitration Law is an authoritative and extensively cited treatise on arbitration. It thoroughly discusses general arbitration law―from federal preemption of state law to the formation, performance, and enforcement of arbitration agreements―and provides in-depth coverage of specialized law governing international arbitration and labor arbitration. The last few decades have witnessed the growth of a large body of legal doctrine―from statutes, judicial decisions, and other sources―focused on arbitration. This Concise Hornbook summarizes that body of law, so should be useful to lawyers and scholars researching arbitration law and to students learning about arbitration.
I haven't yet received a copy of the book, but know from reviewing the draft of the labor law chapter that it will be top-flight.
Friday, June 2, 2017
Congratulations to Rafael Gely (Missouri-Columbia), who just received the David Petersen Award from the National Academy of Arbitrators. In addition to all his labor/employment work, Rafael directs Missouri-Columbia's Center for the Study of Dispute Resolution. He also is the founder of Workplace Prof Blog -- he created the blog and then handed it off to me way back when he was at Cincinnati. Here’s the announcement of the award, which is extremely well deserved:
The National Academy of Arbitrators conferred upon Rafael Gely the David Petersen Award at its annual meeting in Chicago, Illinois. The David Petersen Award recognizes and honors individuals who have given invaluable service to the Academy.
The Academy conferred the Petersen Award because of Professor Gely’s instrumental role in the startup and continual maintenance of arbitrationinfo.com, the neutral website which is a joint venture of the National Academy of Arbitrators and the University of Missouri School of Law. Through Professor Gely’s work as an editor of the site, he has written content on a regular basis, designed and updated the site, supervised student assistants, and crucially connected with journals both before and after articles are written. The Academy notes the creation of the website provided a source of information and education regarding arbitration for journalists, professionals, and the public. The Academy believes that the website has immeasurably improved the discourse and understanding of labor and employment arbitration in both United States and Canada.
Sunday, May 21, 2017
Michael Green has been burning the midnight scholarship oil recently. He has posted two articles to SSRN in the last month: The Audacity of Protecting Racist Speech under the National Labor Relations Act, forthcoming 2017 U. Chicago Legal Forum, and Can NFL Players Obtain Judicial Review of Arbitration Decisions on the Merits When a Typical Hourly Union Worker Cannot Obtain This Unusual Court Access?, forthcoming NYU J. Legislation and Public Policy. He also has a forthcoming paper in SMU Law Review on Racial Prejudice in ADR in the Workplace (SSRN post coming soon). Congrats, Michael!
Sunday, February 12, 2017
Aaron Halegua (NYU) writes to give us the heads-up on a free, downloadable book by the ILO: Resolving Individual Labour Disputes: A Comparative Overview. Here's the ILO's description of the book:
The number of individual disputes arising from day-to-day workers’ grievances or complaints continues to grow in many parts of the world. The chapters in this book cover individual labour dispute settlement systems in Australia, Canada, France, Germany, Japan, Spain, Sweden, the United Kingdom and the United States.
Each chapter examines and assesses the institutions and mechanisms for settlement of individual labour disputes, including the procedures and powers available, the interaction of these institutions and mechanisms with other labour market institutions (e.g. collective bargaining and labour inspection) and the broader system for resolution of legal disputes (e.g. courts of general jurisdiction, specialist commissions and tribunals).
And here's Aaron's description of the chapter he wrote on the U.S.:
I contributed a chapter on the United States, which I think provides a good overview of the role played by administrative agencies (USDOL, EEOC, NLRB, New York State DOL, NYS Division of Human Rights, etc.), federal and state courts, firm's internal efforts, and both labor and employment arbitration -- as well as how ADR is used in all those contexts. It also seeks to evaluate each one and pulls together statistics on the performance of each institution. I think that people already familiar with the United States might find the evaluation/statistics part and use of ADR in these institutions useful. I also think it would be particularly useful for people trying to understand our complex system with its web of overlapping institutions, or professors ... who might be teaching such students.
Thursday, November 3, 2016
Dennis Nolan and Rick Bales have just published the new edition of their book, Labor and Employment Arbitration in a Nutshell (West, 3d ed.). The publisher's description:
Labor and employment arbitration law simplified. Authoritative coverage provides a description of the origin, development, and practice of labor and employment arbitration. Text focuses on the fundamentals of the labor and employment arbitration process and explores the major arbitration law issues, their importance, and the conflicting opinions on them.
A must have if your studying or working in this area.
Wednesday, August 3, 2016
A petard was a primitive bomb used to breach a wall. A bell-shaped iron casing would be filled with gunpowder and then affixed to the wall; a soldier would light the fuse, and the casing would direct the force of the blast toward the wall. Apparently, petards often exploded before the soldier could run away, hoisting (lifting) the soldier in the blast. Thus, the phrase "to hoist with his own petard" (Hamlet) means "to be harmed by one's plan to harm someone else".
That's an apt description for what seems to be happening now to many companies that have adopted consumer-arbitration clauses coupled with class-action waivers. A former student, now working at a large defense firm, describes how it's happening. Take a claim that's only marginally colorable and at face value worth only a few dollars, and file for arbitration. AAA rules impose on the company a $3400 arbitration fee plus attorneys fees. Settle for $3k. Repeat ad infinitum, thanks to the class-action bar contained in the company's arbitration clause. Company gets hoisted on its own petard.
Dennis Nolan and Marty Malin predicted several years back that something like this would happen, but this is the first report from the field I've heard. Dennis points out that companies may try work-arounds -- they might stop settling (which would force the hands of plaintiff mills, but wouldn't work on cases with claims that are low-dollar but at least colorably meritorious) or they might find an arbitral service provider cheaper than AAA (but courts might be reluctant to enforce arbitration clauses specifying arbitral service providers with close ties to the company -- see Hooters v. Phillips).
Monday, July 25, 2016
Christine O'Brien (Boston College - Management) has just posted on SSRN her article (forthcoming 19 U. Pa. J. Bus. L. ___) Will the Supreme Court Agree with the NLRB that Pre-Dispute Employment Arbitration Provisions Containing Class and Collective Action Waivers in Both Judicial and Arbitral Forums Violate the National Labor Relations Act – Whether There is an Opt-Out or Not? Here's the abstract:
Should employers be able to require individual employees to sign away their rights to collective action as a condition of employment? The National Labor Relations Board has held in D.R. Horton and Murphy Oil USA that when employers require employees to waive their right to “joint, class, or collective claims addressing wages, hours, or other working conditions against the employer in any forum, arbitral or judicial” as a condition of employment, this violates the NLRA. Even allowing prospective employees to opt out of such class waivers does not cure the violation in the NLRB’s view according to its decision in On Assignment Staffing Services. A circuit split has developed on enforcement of the Board’s orders on the class waiver issue with the Fifth Circuit denying the NLRB enforcement, the Seventh affirming the Board, and the Eight Circuit joining the Fifth. There are several appellate cases pending before the Ninth Circuit which has yet to fully develop its stance and approximately sixty class waiver cases pending on appeal. The Supreme Court will likely be faced with deciding one of these appeals soon. This article discusses the NLRB’s and courts’ positions from several recent cases involving class waivers in individual employment dispute agreements. It suggests how the courts and the Supreme Court should rule as well as the possibility of legislative action.
Monday, May 30, 2016
Admittedly, this title is somewhat hyperbolic, but hope beats eternal and last week the Seventh Circuit created a circuit split on the Horton question, which I've addressed before on this blog and in a co-authored article with Tim Glynn. And, full disclosure -- the two of us are among the signatories of an amicus brief before several courts of appeal.
Lewis v. Epic is well worth the read, but the Readers Digest version is that the court refused to enforce an agreement that precluded pursuit of class claims in either arbitration or court. The basis was the National Labor Relations Act's protection of workers' concerted actions for mutual aid and protection and its concomitant invalidation of agreements purporting to restrict that right. The prohibition of collective procedures in the arbitral tribunal "runs straight into the teeth of Section 7."
Nor did the FAA change that result. Epic argued that "even if the NLRA killed off the collective action waiver, the FAA resuscitates it," but the court didn't agree. Given that a court should try to reconcile potentially competing statutes, Epic faced a heavy burden in finding the FAA to trump the NLRB. Indeed, given the FAA's savings clause, which requires enforcing any contract "save upon such grounds as exist at law or in equity for the revocation of any contract," Judge Wood found no conflict at all between the two enactments.
Epic was circulated to the full Seventh Circuit, and no judge indicated a desire for en banc review. In normal circumstances, that would mean a petition for certiorari, but it seems unlikely than an understaffed Supreme Court will take the case. Presumably, the issue will continue to play out in the circuits that have not addressed the issue. In the meantime, however, the case has cast an epic uncertainty over waivers of collective or class relief in arbitration agreements.
Tuesday, May 17, 2016
Stacie Strong (Missouri) just sent an email to the ADR listserv describing an international labor/arbitration case. I'm reprinting here (with permission) the description of the case from her email:
A very interesting case, Suazo v. NCL (Bahamas), Ltd., was recently handed down by the U.S. Court of Appeals for the Eleventh Circuit. The case involved a cruise ship employee who was injured on the job and whose employment contract contained an arbitration agreement governed by the New York Convention and Chapter 2 of the Federal Arbitration Act. The question was whether the employee could bar arbitration by showing that high costs may prevent him from effectively vindicating his federal statutory rights in the arbitral forum.
The matter came up as part of a motion to compel arbitration, and the court held that "Our New York Convention precedent suggests (but does not hold) that a party may only raise this type of public-policy defense in opposition to a motion to enforce an arbitral award after arbitration has taken place, and not in order to defeat a motion to compel arbitration." This approach is, of course, problematic if one concludes that it will be difficult if not impossible to vindicate one's rights initially if one cannot afford to pursue the claim (here the court decided that the claimant had not made the appropriate showing, so the court was able to take a "no harm, no foul" perspective). However, the decision appears correct under the New York Convention.
Some might say that the advent of third party funding and availability of contingent fee attorneys in the United States would allow worthy claimants to assert their claims, but there is no guarantee that a third party funder or contingent fee attorney will take any particular case. While it is unclear how often this type of scenario will arise in the future, the case does identify a significant area of tension between domestic law and international law.