Justia Arbitration & Mediation Opinion Summaries

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Gupta joined Morgan Stanley and signed an employment agreement containing an arbitration clause; an employee dispute resolution program (CARE) applied to all U.S. employees. The CARE program did not then require employees to arbitrate employment discrimination claims but stated that the program “may change.” In 2015, Morgan Stanley amended its CARE program to compel arbitration for all employment-related disputes, including discrimination claims, and sent an email to each U.S. employee, with links to the new arbitration agreement and a revised CARE guidebook. The email attached a link to the arbitration agreement opt-out form and set an opt-out deadline, stating that, if the employee did not opt-out, continued employment would reflect that the employee agreed to the arbitration agreement and CARE guidebook and that opting out would not adversely affect employment status. Gupta did not submit an opt-out form or respond to the email. He continued to work at Morgan Stanley for two years until, he alleges, the company forced him to resign because of military leave. Gupta sued for discrimination and retaliation under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301–35. The court agreed with that Illinois law permits an offeror to construe silence as acceptance if circumstances make it reasonable to do so; based on pretrial evidence, Gupta could not dispute he received the email. The Seventh Circuit affirmed an order compelling arbitration under the Federal Arbitration Act, finding the existence of a written agreement to arbitrate, a dispute within the scope of that agreement, and a refusal to arbitrate. View "Gupta v. Morgan Stanley Smith Barney, LLC" on Justia Law

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On remand from the Supreme Court, the Fifth Circuit held that the district court correctly determined that this case was not subject to the arbitration clause at issue and affirmed the judgment. The Supreme Court held that the "wholly groundless" exception was inconsistent with the Federal Arbitration Act and declined to opine on whether the contract here in fact delegated the threshold arbitrability question to an arbitrator, remanding for this court to make that determination in the first instance. The court held that the parties have not clearly and unmistakably delegated the question of arbitrability to an arbitrator. Because this action was not subject to mandatory arbitration, the court did not reach Archer's alternative argument that third parties to the arbitration clause cannot enforce such an arbitration clause. View "Archer and White Sales, Inc. v. Henry Schein, Inc." on Justia Law

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In 1995, Daniel Clifford began working for Quest Software Inc. (Quest). In 2012, Dell Inc. acquired Quest to form its software division, Dell Software Inc., which hired Clifford as an employee. In 2015, Clifford participated in Dell’s online “Code of Conduct” training course. According to Quest, when Clifford completed the training, he acknowledged that he read and agreed to the terms of Dell’s Arbitration Agreement and Dispute Resolution Program. In 2017, Clifford filed a complaint against Quest for: (1) failure to pay overtime; (2) failure to provide meal periods; (3) failure to provide rest periods; (4) failure to provide accurate wage statements; (5) failure to reimburse for business expenses; and (6) unfair business practices under Business and Professions Code section 17200. He based his complaint on his allegation Quest misclassified him as an exempt employee. Quest moved to compel arbitration of Clifford’s claims. The trial court found Quest had established the existence of a binding and enforceable arbitration agreement, and it compelled arbitration of Clifford’s first through fifth causes of action. However, it denied the motion on the sixth cause of action, his UCL claim, citing without discussion the California Supreme Court’s decision in Cruz v. PacifiCare Health Systems, Inc., 30 Cal.4th 303 (2003). The court stayed the prosecution of that cause of action pending the completion of the arbitration. Quest timely appealed. The question posed in this appeal was whether an employee’s claim against his employer for unfair competition under section 172001 was arbitrable. The Court of Appeal reversed that portion of the trial court’s order. "Assuming Cruz remains good law . . . Cruz at most stands for the proposition that UCL claims for 'public' injunctive relief are not arbitrable. Cruz does not bar arbitration of a UCL claim for private injunctive relief or restitution, which is precisely what the UCL claim here seeks. The employee’s UCL claim therefore is subject to arbitration, along with his other causes of action." View "Clifford v. Quest Software Inc." on Justia Law

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In this lawsuit alleging that Verizon Wireless violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, the First Circuit affirmed the district court's denial of Verizon's motion to compel arbitration but reversed the court's grant of summary judgment in Verizon's favor, holding that the district court erred in concluding that Plaintiff's TCPA claims failed as a matter of law because her telephone number was not assigned to a cellular telephone service. In her complaint, Plaintiff claimed that Verizon's unauthorized, automated calls to her cellular telephone violated the TCPA. The district court concluded that Plaintiff's telephone number was not assigned to a cellular telephone service within the meaning of the relevant provision of the TCPA and granted summary judgment to Verizon. The First Circuit reversed, holding (1) the district court correctly denied Verizon's motion to compel arbitration; but (2) in concluding that Plaintiff's number was not assigned to a cellular telephone service the district court failed to consider the hybrid nature of Plaintiff's telephone service with Republic Wireless and erred in treating other facts as dispositive. View "Breda v. Cellco Partnership" on Justia Law

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After DAI denied defendant's application to purchase an existing Subway franchise, defendant filed suit alleging that DAI discriminated against him on the basis of race. DAI then filed this action seeking to compel defendant to arbitrate, but the district court denied DAI's motion to compel. The Second Circuit agreed with the district court that whether or not an agreement is supported by adequate consideration is a question about contract formation for the court, not the arbitrator, to decide. However, the court held that the promise to arbitrate in the Franchise Application was supported by adequate consideration. Accordingly, the court vacated the district court's judgment and remanded for further proceedings. View "Doctor's Associates, Inc. v. Alemayehu" on Justia Law

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The Supreme Court reversed the decision of the court of appeals affirming the trial court's judgment granting Plaintiff's motion to certify a class action, holding that when a class-certification case originates with a single named plaintiff and that plaintiff is not subject to an arbitration agreement that was entered into by unnamed putative class members, the defendant need not raise a specific argument referring or relating to arbitration in the defendant's answer. Plaintiff filed a class-action complaint against Defendant, his former employer. When Plaintiff moved to certify the case as a class action Defendant opposed the motion, asserting the defense of arbitration. The trial court granted the motion, concluding that Defendant waived any right of arbitration. The appellate court affirmed, determining that Defendant's failure to assert the arbitration defense in his answer or to seek to enforce the right to arbitration prior to its opposition to the certification was inconsistent with its right to assert the defense. The Supreme Court reversed, holding (1) because arbitration was not available as a defense at the time Defendant submitted its answer, Defendant could not waive a right to assert arbitration at that time; and (2) Defendant had no duty to raise an argument that Plaintiff failed to satisfy Civ.R. 23(A)'s typicality and adequacy requirements. View "Gembarski v. PartsSource, Inc." on Justia Law

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Defendants Merchants Building Maintenance, LLC and Merchants Building Maintenance Company (the MBM defendants) appeal from an order of the trial court denying their joint motion to compel arbitration. The MBM defendants moved to compel arbitration of a portion of plaintiff Loren Mejia's cause of action brought against them for various violations of the Labor Code under the Private Attorneys General Act of 2004 (PAGA). The MDM defendants moved to compel arbitration of that portion of Mejia's PAGA claim in which she seeks "an amount sufficient to recover underpaid wages." The Court of Appeal reduced the issue presented as whether a court could split a single PAGA claim so as to require a representative employee to arbitrate that aspect of the claim in which the plaintiff sought to recover the portion of the penalty that represented the amount sufficient to recover underpaid wages, where the representative employee has agreed to arbitrate her individual wage claims, while at the same time have a court review that aspect of the employee's claim in which the plaintiff sought to recover the additional $50 or $100 penalties provided for in section 558 of the Labor Code for each violation of the wage requirements. The Court of Appeal concluded that a single PAGA claim seeking to recover section 558 civil penalties could not be "split" between that portion of the claim seeking an "amount sufficient to recover underpaid wages" and that portion of the claim seeking the $50 or $100 per-violation, per-pay-period assessment imposed for each wage violation. The Court affirmed the trial court's order denying the MDM defendants' motion to compel arbitration in this case. View "Mejia v. Merchants Building Maintenance" on Justia Law

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Jaludi began working for Citigroup in 1985 and rose steadily through the ranks. Jaludi was laid off and terminated in 2013 after reporting certain improprieties in Citigroup’s internal complaint monitoring system. Jaludi, believing Citigroup had fired him in retaliation for his reporting, sued under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962 (RICO), and the Sarbanes–Oxley Act of 2002, 18 U.S.C. 1514A. Citigroup moved to compel arbitration, relying on two Employee Handbooks. The 2009 Employee Handbook, contained an arbitration agreement requiring arbitration of all claims arising out of employment—including Sarbanes–Oxley claims. In 2010, Congress passed the Dodd–Frank Wall Street Reform and Consumer Protection Act, which amended Sarbanes–Oxley to prohibit pre-dispute agreements to arbitrate whistleblower claims, 18 U.S.C. 1514A(e)). In 2011, Citigroup and Jaludi agreed to the 2011 Employee Handbook; the arbitration agreement appended to that Handbook excluded “disputes which by statute are not arbitrable” and deleted Sarbanes–Oxley from the list of arbitrable claims. Nonetheless, the district court held that arbitration was required for all of Jaludi’s claims. The Third Circuit reversed in part. Although Jaludi’s RICO claim falls within the scope of either Handbook’s arbitration provision, the operative 2011 arbitration agreement supersedes the 2009 arbitration agreement and prohibits the arbitration of Sarbanes–Oxley claims. View "Jaludi v. Citigroup" on Justia Law

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Robert was admitted to a nursing home multiple times. During his final stay, he fell out of bed, sustained a head injury, and later died. His estate sued in state court, alleging negligence, negligence per se, violations of Kentucky’s Residents’ Rights Act, KRS 216.515(26), corporate negligence, medical negligence, wrongful death, and loss of consortium. The nursing home sought to enforce an arbitration agreement in federal court. The district court held that no valid agreement covering the final visit existed. An Agreement dated January 5, 2015 displays a mark of some kind in the “Signature of Resident” block, but it is difficult to read. Bramer’s estate alleges that this scrawl is a forgery; Robert's widow stated in an affidavit that neither she nor Robert signed that form. On an Agreement dated January 26, 2015, the widow signed in the “Signature of Resident” block. The Alternative Dispute Resolution Agreements are identical, bind successors and assigns, and require arbitration of a wide range of disputes. They purport to remain in effect through discharge and subsequent readmission. Although signing the Agreement was not a condition of admission, it was presented as part of the admissions packet. The estate presented evidence that the staff implied that signing the Agreement was required. The Sixth Circuit affirmed. By requesting a second agreement on January 26, the nursing home effectively abandoned the first agreement. Lacking Robert’s consent, there was no valid agreement to arbitrate. View "GGNSC Louisville Hillcreek v. Estate of Bramer" on Justia Law

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Defendants-appellants Catalina Restaurant Group, Inc., Carrows Restaurants, Inc., Carrows Family Restaurants, Inc., Coco’s Bakery Restaurants, Inc. and Coco’s Restaurants, Inc. (collectively, Catalina Defendants) appealed the partial denial of their motion to compel arbitration. Plaintiff-respondent Yalila Lacayo (Lacayo) was an employee of Catalina Defendants, and filed a plaintiff’s class action complaint on behalf of herself and others similarly situated (Class Members) against Catalina Defendants in superior court alleging numerous wage and hour violations under the Labor Code, and an injunctive relief claim under California’s unfair competition law (UCL). Catalina Defendants responded by filing a motion to compel arbitration of Lacayo’s individual claims, including the UCL claim, and dismissal of the class claims (Motion). The trial court granted the Motion as to Lacayo’s individual claims; refused to dismiss the class claims, instead letting the arbitrator decide if the class claims were subject to arbitration or a class action waiver; and denied the Motion as to the UCL claim; and stayed the matter until after arbitration was completed. Catalina Defendants on appeal argued the trial court erred by: (1) refusing to enforce the individual arbitration agreement according to its terms; and (2) refusing to compel arbitration of Lacayo’s UCL claim. In supplemental briefing, both parties addressed whether Catalina Defendants could appeal the trial court’s order granting arbitration of individual claims but refusing to dismiss the classwide claims, leaving the decision for the arbitrator. The Court of Appeal found Catalina Defendants could not appeal the portion of the Motion that granted arbitration for Lacayo’s individual claims and the refusal to dismiss the class claims. The Court of Appeal only addressed the order finding that the UCL claim was not subject to arbitration, and affirmed the trial court's order denying defendants' Motion as to the UCL claim. View "Lacayo v. Catalina Restaurant Group Inc." on Justia Law