Tuesday, September 13, 2022
This article is the author's longstanding annual review of the Supreme Court's employment-related decisions of the term just ended. This year's article about the 2021 Term first summarizes every employment-related decision rendered by the Court through the end of the term in July of 2022. Each case summary is followed by the author's comments about the decision's significance to workplace stakeholders. Also included in this section are abbreviated summaries of all opinions and orders from the so-called "shadow docket" that are of consequence to employment relations. Next, the article provides short statements about each grant of certiorari for the upcoming term on issues affecting employment and labor law. The article concludes with brief additional commentary on the Supreme Court's work as it affects the American workplace.
This essay examines briefly four 2022 decisions of the United States Supreme Court dealing with forced arbitration of workplace disputes. The paper summarizes the factual background of each case and posits the effect of each decision on both employers and employees. The paper concludes by relating these four decisions to the Court's continuing embrace of compelled arbitration of employee claims.
Tuesday, August 24, 2021
A huge congratulations to Marty Malin (Chicago-Kent) and Joe Slater (Toledo), who the Biden Administration has announced will be appointed to the Federal Labor Relations Act Federal Impasse Panel. Marty will Chair the panel. Here's the announcement:
Today, President Joe Biden announced his intent to appoint the following members to the Federal Labor Relations Authority (FLRA) Federal Service Impasses Panel: ...
The Panel is a component of the FLRA that resolves impasses between federal agencies and unions representing federal employees. If bargaining between the parties, followed by mediation assistance, does not result in a voluntary agreement, then either party or the parties jointly may request the Panel’s assistance.
Tuesday, August 10, 2021
My summer research project has been compiling and analyzing COVID-related labor arbitration awards. The result is an article that will be published this fall in the Ohio State Journal on Dispute Resolution. The title is COVID-Related Labor Arbitration Awards in the United States and Canada: A Survey and Comparative Analysis; here's the abstract:
The COVID-19 pandemic of 2020-21 has changed working conditions for millions of Americans and Canadians quickly and dramatically. Employers responded by requiring employees to quarantine, implementing workplace COVID policies, disciplining employees who violated those policies, changing work schedules, cancelling leaves or vacations, and furloughing or laying off employees. Unions have challenged many of these actions, raising a variety of novel issues that are now being resolved through labor arbitration. This article surveys those labor arbitration awards and then comparatively analyzes the awards from Canada and the United States.
Wednesday, September 30, 2020
California Governor Gavin Newsom has signed a law -- SB 1384 -- that augments the authority of the state's Labor Commissioner, an office that typically handles wage claims for low-wage and unrepresented workers in what are called "Berman Hearings". The text of the new law follows the page break below. This new law authorizes the Commission to represent financially strapped workers when a court has compelled arbitration under a mandatory arbitration agreement, if the Commission decides the case has merit. The Commissioner already has this authority for poor claimants in regular civil cases if the individual already has prevailed. The law responds to systemic problems shown by research that individual employees who are obliged to arbitrate claims pro se, without counsel, lose most of the time.
Below the break is the legislative counsel's digest and the test of the statute.
The new (4th) edition of Arbitration Law will be published in November and available for Spring 2021 courses. Authors are Kathy Stone (UCLA), Rick Bales (ONU), and Alex Colvin (Cornell ILR). Here's an excerpt from the publisher's description:
This casebook presents a comprehensive treatment of the legal issues involved in arbitration. The first four chapters address issues that arise under written agreements to arbitrate contained in private contracts. They present the law that has evolved under the Federal Arbitration Act, a statute that governs arbitration in contracts involving interstate commerce. Chapter 5 looks at arbitration in the labor management context that is governed by the Labor Management Relations Act. Chapter 6 addresses international commercial arbitration. Together the book is designed to give students a thorough understanding of arbitration law, and to provide a solid foundation for legal practice, whether in alternative dispute resolution tribunals or in the civil justice system.
Monday, September 28, 2020
Lise Gelernter (Emeritus Professor & Visiting Scholar, Buffalo) sends this guest post about two arbitration decisions authored by SCOTUS nominee Amy Barrett: Wallace v. Grubhub Holdings, Inc., No. 19-1564 (7th Cir. 2020) and Herrington v. Waterstone Mortgage, No. 17-3609 (7th Cir. 2018):
On a substantive level unrelated to the confirmation of Judge Barrett, both decisions illustrate the intricacy of two of the many unanswered questions the Supreme Court has left concerning arbitration: 1) who falls under the exemption from the FAA for what the Court called "transportation workers"? and 2) which issues of "arbitrability" does a court or an arbitrator decide?
In the GrubHub case, Barrett, writing for the Seventh Circuit, said that "transportation workers" who are exempt from the FAA have to be in a class of workers involved in the interstate movement of goods, as is true of the seamen and railroad workers who are specifically exempted. Although it was not an issue in GrubHub, I think it should be pretty clear that the exemption also applies to transportation workers involved in the interstate movement of people as well as goods. Many of the seamen and railroad workers exempted specifically deal only or primarily with the interstate movement of people. Many airline workers considered to fall under the exemption for railroad workers (since both are covered by the Railway Labor Act) also deal primarily with moving people. There have been a few court decisions that say otherwise (including one that said Uber drivers who transport only passengers cannot fall under the FAA exemption), but I think they're dead wrong.
On the arbitrability issue, in the Herrington case, Judge Barrett walked a fine line between confirming prior 7th Circuit precedent that said an arbitrator has the authority to decide whether to consolidate a group of individual "bilateral" actions, and saying that only courts had the authority to decide the issue of whether an arbitration agreement permitted class and collective actions. Does it really make a difference if 1,000 Doordash drivers bring virtually identical individual arbitration claims that an arbitrator consolidates, or if those same 1,000 Doordash drivers bring a class or collective arbitration claim? I recognize there are some differences between those two scenarios, but I could see a different district or circuit court coming up with a different answer.
A lot of the confusion among the courts is that the Supreme Court left a mess when it, in my opinion, started to create more content for the FAA that it actually has (Circuit City, ATT Mobility v. Concepcion, etc.). Because the FAA does not really contain the substantive law that the Supreme Court majority has claimed it does, there are few clear answers to be found in the statute to the unanswered questions about arbitrator authority, FAA exemptions, invalidation of arbitration clauses or agreements and a myriad of other issues.
Wednesday, September 23, 2020
Wednesday, September 9, 2020
I hope many of you will join me in attending [virtually] the webinar The USMCA (the new NAFTA): Moving to Effective Enforcement of Labor Rights, on Thursday, 17 September 2020 12:30-1:30 (EST). Here's a brief description:
The United States-Mexico-Canada Agreement, replacing NAFTA, came into force on July 1. There are important changes to the Labor chapter and the introduction of a rapid response mechanism in the Dispute Resolution chapter. This novel mechanism provides a new labor rights enforcement approach and it is the first of its kind in a U.S. free trade agreement. The panelists will cover topics including the complaints mechanisms, burden of proof, the ILO fundamental rights and core conventions link, and the impact on national labor laws.
The webinar is being offered by the U.S. Branch of the ISLSSL and the International Interest Section of U.S. - LERA. Here's a more detailed description of the program is available here; you can register here. Membership in neither organization is required.
Thursday, July 9, 2020
Mark Gough (Penn St. School of Labor & Employment Relations) has posted on the ILR Review website his article A Tale of Two Forums: Employment Discrimination Outcomes in Arbitration and Litigation, Industrial & Labor Relations Rev. (forthcoming 2020). Rather than just posting his abstract, I'll post instead a summary I asked Mark to draft for me, which helps situate this empirical work among other empirical work on similar topics:
Most of the empirical literature comparing outcomes between forums uses relatively crude descriptive statistics to show stark differences in employee win rates and monetary award amounts within the populations cases disposed of in arbitration and litigation. Indeed, scholars have provided robust evidence on the resolution of employment disputes within individual forums such as:
- The American Arbitration Association (AAA) – see, e.g., Alexander J.S. Colvin, An Empirical Study of Employment Arbitration: Case Outcomes and Processes, 8 J. Empirical Legal Studies 1 (2011); Lisa B. Bingham, On Repeat Players, Adhesive Contracts, and the Use of Statistics in Judicial Review of Employment Arbitration Awards, 29 McGeorge L. Rev. 223 (1998).
- The Financial Industry Regulatory Authority (FINRA) – see, e.g., J. Ryan Lamare & David B. Lipsky, Employment Arbitration in the Securities Industry: Lessons Drawn from Recent Empirical Research, 35 Berkeley J. Employ. & Labor L. 113 (2014); J. R. Lamare, & D. B. Lipsky, Resolving Discrimination Complaints in Employment Arbitration: An Analysis of the Experience in the Securities Industry, Industrial & Labor Relations Rev. (2018).
- Federal court – see, e.g., Kevin M. Clermont & Stewart J. Schwab, How Employment Discrimination Plaintiffs Fare in Federal Court, 1 J. Empirical Legal Studies 429 (2004).
- State court – see, e.g., Theodore Eisenberg & Elizabeth Hill, Arbitration and Litigation of Employment Claims: An Empirical Comparison, 58 Dispute Resolution J. 44 (2003).
These studies often are used to support the perceptions of arbitration as an employee-unfriendly forum. See, e.g., Mark Gough, How Do Organizational Environments and Mandatory Arbitration Shape Employment Case Selection? Evidence From an Experimental Vignette, 57 Industrial Relations 541 (2018); Mark Gough, Employment Lawyers and Mandatory Employment Arbitration: Facilitating or Forestalling Access to Justice, 16 Advances in Industrial Relations 133 (2016). And while informative, a limitation of this literature is it provides minimal controls to account for systematic variation between forums. It is clear that the average monetary award and employee success rates at trial are lower in arbitration than litigation, but are employee claimants genuinely at a disadvantage in arbitration? Or does systematic variation exist within the underlying merits of cases, presence or quality of counsel, party resources, or other case characteristics which account for differences in outcomes between arbitration and litigation? In short, one must be careful to compare “apples to apples” when drawing evaluative conclusions about arbitration’s effect(s) on access to justice.
In a 2020 empirical study, Mark Gough attempts such apples-to-apples comparisons by surveying 1,256 employment plaintiff attorneys about their most recent cases adjudicated in arbitration, state court, or federal court. Even while accounting for claim, plaintiff, defendant, and attorney characteristics, Gough finds employment discrimination plaintiffs in arbitration are less likely to receive a judgment in their favor and smaller awards compared to similar cases disposed in state and federal court. Specifically, he reports, “compared to arbitration, employees' odds of winning increase by 70.7 percent in a federal jury trial, 183.7 percent in a state judge-only bench trial, and 146.0 percent in a state jury trial…[and] relative to arbitration, monetary damages awarded to success
Lance Compa, Senior Lecturer, Cornell ILR, sends this invitation to participate in a presentation and panel discussion of a new arbitration template for stakeholder-brand agreements in the global supply chain. If you want to ensure that the food you eat, and clothes and products you buy, are made with fair labor, you will want to sign up for this.
A new proposal aims to provide a streamlined and cost-effective dispute resolution system that “puts the enforcement” into enforceable brand agreements between labor advocates and global firms.
Drawing on their experience under the Bangladesh Accord and similar labor standards agreements, four prominent labor rights advocacy groups – International Labor Rights Forum, Worker Rights Consortium, Clean Clothes Campaign and Global Labor Justice – unveiled in June 2020 model arbitration clauses for disputes.
Join us on Friday 17 July from 11 a.m. to noon EST for a live presentation from drafters of the proposal--Katerina Yiannibas of Columbia Law School, Lance Compa of Cornell University ILR School and Ben Hensler of the Worker Rights Consortium--plus a panel discussion on its uses in apparel, food and other sectors.
The New Conversations Project is organizing this event as part of the Cornell ILR School’s Scheinman Institute on Conflict Resolution.
We hope you’ll join us on 17 July. Remember to register here.
Friday, June 12, 2020
In March 2020, many states imposed stay-at-home orders because of the covid-19 pandemic. Most labor arbitration hearings were postponed. However, as it became clear that the pandemic would not be going away quickly, arbitrators and parties began to consider online hearings. A consensus quickly emerged that Zoom would be the online platform of choice because it, unlike most other platforms, has the functionality to create breakout rooms. The National Academy of Arbitrators (NAA) and Federal Mediation and Conciliation Service (FMCS) quickly organized a series of online tutorials for arbitrators on how to schedule and run a Zoom hearing.
One issue that quickly arose was whether an arbitrator could require a hearing to be conducted online over the objection of one of the parties. The position of the American Arbitration Association currently is that such a decision should be left to the discretion of the arbitrator. The NAA has provided this guidance in Opinion No. 26 (April 1, 2020):
In the absence of a collective bargaining agreement or an ad hoc agreement of the parties prohibiting such an arrangement, an arbitrator in exceptional circumstances, without violating the Code [of Professional Responsibility for Arbitrators of Labor-Management Disputes], may order that a matter proceed by way of video hearing in whole or in part without mutual consent and over the objection of a party. In doing so, the arbitrator must determine that a video hearing is necessary in order to provide a fair and effective hearing. * * *
When the issue arises, the arbitrator’s first recourse should be to assist the parties in reaching a mutually acceptable resolution in the prehearing process. * * *
If agreement is not reached and it is necessary for the arbitrator to decide the issue of whether a matter will proceed by way of a video hearing over an objection, the arbitrator must consider the applicable circumstances and context of the request. Where, for example, a global pandemic makes it virtually impossible for an in-person hearing to be safely conducted, that factor may weigh in favor of the video hearing option, particularly if the hearing has been postponed previously, a party in opposition is non-responsive or declines to provide a reasonable explanation, and/or the case involves continuing liability or time sensitive matters, such as an emergency health and safety issue. Government travel restrictions and family and health considerations of counsel or witnesses may also weigh in the arbitrator’s decision to order or not order a video hearing. The factors favoring a video hearing may, in the arbitrator’s judgment, be offset by countervailing factors, such as a party’s lack of necessary equipment, difficulty in preparing and marshaling witnesses, or other limiting considerations. Further, the substance of the grievance might suggest to the arbitrator that a delay to allow for an in-person hearing does not seriously prejudice the rights of the parties.
As a practical matter, labor arbitrators have been reluctant to order online arbitration hearings over the objection of a party absent a showing that delay would result in significant prejudice. However, it is not yet clear whether this trend will continue. Some states have almost completely re-opened. Even in these states, however, arbitrators, advocates, parties or witnesses may be older or immunocompromised and therefore reluctant to meet in person. Many courts have postponed civil hearings and trials or moved them online, and arbitrators sometimes follow the practice of local courts. But if there is a new surge in cases, parties may become frustrated with further delay and more amenable to online hearings.
It also is not yet clear whether any move toward online hearings will be permanent or merely a temporary response to what we hope will be a short-lived pandemic. Most arbitrators and advocates still seem to strongly prefer in-person hearings, believing that such hearings give the advocates and witnesses a better opportunity than online hearings to “tell their story”. However, as arbitrators and advocates become more proficient with the technology, and experience firsthand the cost savings (especially in reduced travel) and convenience of online hearings, such hearings likely will become much more common than they were before the pandemic even if in-person hearings remain the norm.
Monday, April 20, 2020
Katherine Stone has a piece in the April issue of The American Prospect magazine, called The Rise of Neo-Feudalism. Together with her co-author, Robert Kuttner, the article argues that "Western democracies are not simply embracing neoliberalism in the sense of deregulating the economy. Elites are pursuing something aptly described as a new form of feudalism, in which entire realms of public law, public property, due process, and citizen rights revert to unaccountable control by private business." Among other examples, the article discusses the proliferation and expansion of arbitration as private judicial systems that operate to eliminate hard-won worker rights.
In addition, Katherine Stone discussed the article, and the ramifications for worker rights, on NPR's show, Background Briefing. The segment is posted online here and here.
Tuesday, February 25, 2020
Friday, June 7, 2019
Christine Neylon O'Brien & Stephanie M. Greene (both Boston College - Carroll School of Management) have just posted their new article (forthcoming 56 American Bus. L.J. # 4 (Winter 2019)) New Battles and Battlegrounds for Mandatory Arbitration after Epic, New Prime, and Lamps Plus. Here's the abstract:
The Supreme Court’s recent decisions interpreting the Federal Arbitration Act (FAA) in the employment context generally prioritize arbitration over workers’ labor law rights. The majority in Epic Systems upheld mandatory individual employment arbitration agreements despite their conflict with the labor law right to act in concert. The same majority in Lamps Plus presumed that the parties intend individual arbitration absent reference to group arbitration. However, in a rare unanimous decision, the Supreme Court in New Prime exempted transportation workers from FAA coverage, even where the workers are independent contractors rather than employees. These decisions resolved some disputes about the breadth of the FAA but other questions remain unresolved. For example, do the confidentiality provisions so often associated with arbitration provisions unlawfully interfere with employees’ federal labor law rights? Are state laws on employment arbitration subject to preemption?
Some state courts and legislatures continue to seek ways to protect workers who are disadvantaged by mandatory individual arbitration provisions, and others outline procedures for arbitration even for those transportation workers who are categorically exempt under the FAA. State laws regulating employment arbitration may fail in the face of preemption arguments, as the Court’s slim conservative majority appears intent on upholding individual arbitration provisions at all costs. Nevertheless, California persists in allowing representative suits under its Private Attorney General’s Act (PAGA) and state courts continue to consider traditional contract defenses such as lack of mutual assent and unconscionability as arguments to bypass onerous arbitration provisions. The Court’s New Prime decision will reinvigorate the battle over what it means to be “engaged in interstate commerce” to qualify for the FAA’s transportation worker exemption, with workers for Uber and Lyft leading the charge as they seek to avoid mandatory individual arbitration. In contrast, businesses will undoubtedly argue that even transportation workers who are exempt under the FAA still must arbitrate under state law provisions that do not exempt transportation workers.
The authors recommend that Congress amend the FAA to exclude all workers affecting interstate commerce, and clarify the role of state law regulating employment arbitration. State legislation should provide guidance on what makes arbitration truly voluntary and fair, as well as afford employees a real choice on collective action and forum, and whether to maintain confidentiality about the dispute.
I'm glad Christine and Stephanie are continuing the good fight. I find these decisions extraordinarily depressing.
Thursday, May 9, 2019
The conventional wisdom on Zarda and the other two related cases on which SCOTUS recently granted certiorari is that the new conservative majority on the Court will hold that Title VII does not protect employees on the basis of LGBT status. I predict the Court will hold that Title VII does protect these employees – and that the vote will be 6-3.
Here’s my reasoning: Roberts appears to be very cognizant of the institutional damage the Court is suffering as it becomes increasingly clear that its decisions are politically motivated. He doesn’t want to be the Chief Justice on whose watch the Court loses the prestige it has built over the last nearly 250 years, and as the Sebelius (Obamacare) case demonstrates, he is willing to at least occasionally change his vote to avoid that. Moreover, there is no better case to “prove” the Court is apolitical – and to draw attention away from all the pro-business cases (e.g., arbitration) and perhaps pro-Republican cases the Court is likely to decide in the near future – than a case the outcome of which he knows will be reported on the front page of nearly every newspaper in the country.
I believe Kavanaugh will be the other conservative defector. Voting for Title VII protection of LGBT status might salvage a bit of his reputation after his less-than-stellar (and hyper-political) confirmation proceedings, and would be consistent with the judicial philosophy he claims to espouse favoring judicial empathy (see Wasserman and Horwitz).
Both Roberts and Kavanaugh will cloak themselves in Scalia’s holding in Oncale that the plain language of Title VII protects men from same-sex harassment. They will quote his statement in that case that "statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed." Their conservative friends will not desert them – it’s hard to question the conservative bona fides of someone who favorably quotes Scalia.
Plus, if both Roberts and Kavanaugh flip, each will give the other cover, and Roberts will avoid the 5-4 decision that would occur if only one or neither of them flipped. I doubt Roberts wants a 5-4 vote on this divisive public issue.
I hope I’m right about this particular outcome, though this should not be taken for optimism about the Court’s future business and political cases.
Friday, April 5, 2019
Liz Tippett (Oregon) and Ann Hodges (Richmond, emerita) have each posted on SSRN terrific articles on unrelated labor/employment topics; both have been or will be published in the Employee Rights & Employment Policy Journal. Liz's article is Opportunity Discrimination: A Hidden Liability Employers Can Fix; here's an excerpt from the abstract:
This article applies a model of workplace advancement where big employment decisions — like promotions and pay raises — are influenced in part by the disparate distribution of smaller opportunities over time. These smaller opportunities generally do not qualify as “adverse employment actions” for the purpose of a discrimination claim under Title VII of the Civil Rights Act. However, their legal significance has been underestimated. The disparate denial of smaller opportunities has been successfully used as evidence of disparate treatment when plaintiffs are later denied a big opportunity.
This article argues that employers should identify and address disparities at the opportunity level to advance workplace equality. Drawing from social science research on discrimination in school discipline, employers could identify the particular decision points and contextual factors that drive disparities and use that information to address the problem. Such undertakings would also be compatible with existing internal employment structures.
Ann's article is Employee Voice in Arbitration; here's the abstract:
The Supreme Court’s 2018 decision in Epic Systems v. Lewis allows employers to force employees to agree to individual arbitration of any claims against the employer, removing their ability to bring class and collective actions. These unilaterally imposed arbitration agreements deprive employees of any voice in this important term of employment.
If arbitration is to serve its intended function of a mutually agreeable forum to resolve disputes, Congress should require employers who desire to use arbitration to negotiate the terms of the agreement with a representative of their affected employees. Such a requirement would reduce some of the adverse effects of employment arbitration, making it more like labor arbitration, which has functioned as an effective dispute resolution mechanism under collective bargaining agreements for many years.
A negotiation requirement would insure that employees have notice of the arbitration provision and input into its terms. The National Labor Relations Board could use its existing election machinery to facilitate employee choice of representative which could be an individual, a group of employees, an attorney, a labor union, or another workers’ rights organization. In addition to providing employee voice, requiring negotiation would discourage arbitration where the employer’s only goal is to reduce employee rights and might also spur employee participation in the workplace and the community.
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.