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In 2016, a hacker tricked an employee into disclosing tax information of about 1,300 Lamps employees. After a fraudulent federal income tax return was filed in the name of Varela, he filed a putative class action on behalf of employees whose information had been compromised. Relying on the arbitration agreement in Varela’s employment contract, Lamps sought to compel arbitration on an individual rather than a classwide basis. The Ninth Circuit affirmed the rejection of the individual arbitration request, authorizing class arbitration. Although Supreme Court precedent held (Stolt-Nielsen, 2010) that a court may not compel classwide arbitration when an agreement is silent on the availability of such arbitration, the Ninth Circuit concluded that Stolt-Nielsen did not apply because the Lamps agreement was ambiguous, not silent, concerning class arbitration. The Supreme Court reversed, Under the Federal Arbitration Act, 9 U.S.C. 2, an ambiguous agreement cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration. Arbitration is strictly a matter of consent. Class arbitration, unlike the individualized arbitration envisioned by the Act, “sacrifices the principal advantage of arbitration—its informality—and makes the process slower, more costly, and more likely to generate procedural morass than final judgment.” Courts may not infer consent to participate in class arbitration absent an affirmative “contractual basis for concluding that the party agreed to do so.” Silence is not enough and ambiguity does not provide a sufficient basis to infer consent. View "Lamps Plus, Inc. v. Varela" on Justia Law

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Plaintiffs filed suit alleging violations of Vermont and federal law when the terms of their loan agreements provided for interest rates well in excess of caps imposed by Vermont law. Plaintiffs sought an injunction against tribal officers in charge of Plain Green and an award of money damages against other defendants. The Second Circuit affirmed the district court's denial of defendants' motion to dismiss and motion to compel arbitration. The court held that tribal sovereign immunity did not bar this suit because plaintiffs may sue tribal officers under a theory analogous to Ex parte Young for prospective, injunctive relief based on violations of state and substantive federal law occurring off of tribal lands. The court also held that the arbitration clauses of the loan agreements were unenforceable and unconscionable. View "Gingras v. Think Finance, Inc." on Justia Law

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The Eleventh Circuit affirmed the district court's orders denying INPROTSA's petition to vacate and confirming an international arbitral award issued for Del Monte. The court had subject matter jurisdiction over the petition to vacate because Congress intended 9 U.S.C. 203 to be read consistently with section 205 as conferring subject-matter jurisdiction over actions or proceedings sufficiently related to agreements or awards subject to the Convention. The court held that the district court did not err by dismissing the petition to vacate, because INPROTSA did not assert a valid defense under the Convention in light of Industrial Risk Insurers v. M.A.N. Gutehoffnungshütte GmbH, 141 F.3d 1434, 1446 (11th Cir. 1998). Even if the district court were not bound by Industrial Risk, the petition to vacate would warrant denial, because the district court did not exceed its power by reasonably construing its own rules as barring substantive reconsideration of the merits of its damages award. Finally, the court held that the district court did in fact rule on the merits of INPROTSA's public policy defenses and held that enforcing the arbitral award did not offend public policy. View "Inversiones Y Procesadora Tropical Inprotsa, S.A. v. Del Monte International GMBH" on Justia Law

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The Eighth Circuit reversed the district court's order vacating an arbitration award originally in favor of the union. The court held that the arbitration award drew its essence from the collective bargaining agreement. In this case, the arbitrator appropriately considered the relevant language of the Recognition Clause, even though it did not quote the Recognition Clause in its entirety. Accordingly, the court remanded for further proceedings. View "National Elevator Bargaining Assoc. v. International Union of Elevator Constructors" on Justia Law

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The Washington South Education Association was the representative of all licensed teachers within the Northfield schools. The Northfield School Board and the Association negotiated and entered into the CBA, which was in effect from July 1, 2017 to June 30, 2018. Paul Clayton was a middle-school physical-education teacher at the Northfield Middle High School (the School) and was a member of the Association. Therefore, Clayton’s employment was subject to the CBA. In late fall 2017, administrators at the School received complaints about Clayton’s workplace conduct. The complaints alleged that Clayton created a hostile work environment by intimidating his colleagues and advised a student (his daughter) to punch another student in the face. In response to the allegations, Clayton was placed on paid leave while the administrators investigated the complaints and interviewed a number of the School’s staff. Upon the conclusion of their investigation, the administrators wrote a letter to the School’s superintendent describing their findings and noting that while they gave Clayton the opportunity to respond, Clayton declined to respond in a follow-up meeting and then a second meeting scheduled to receive his rebuttal a few days later. After receiving the administrators’ letter, the superintendent wrote a letter to Clayton offering him an opportunity to meet with her to discuss the matter, and attached to the letter a summary of the allegations against Clayton. About a week later, the superintendent met with Clayton and his Association representation. Clayton did not file a notice of appeal of his ultimate suspension. Shortly thereafter, Clayton and the Association, now represented by the Vermont affiliate of the National Education Association (Vermont-NEA), submitted a grievance alleging a violation the CBA. The Board declined to accept the grievance, noting Clayton did not follow the prescribed termination procedures outlined in the CBA. Vermont-NEA thereafter invoked the CBA's arbitration procedures. A trial court agreed with the Board, and Clayton and the Association appealed. The Vermont Supreme Court determined Clayton and the Association failed to exhaust statutory remedies as required by 16 V.S.A. 1752, thus the trial court properly enjoined arbitration. View "Northfield School Board v. Washington South Education Association" on Justia Law

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When De Melo was hired, he signed SCI’s “Owner/Operator Agreement,” five pages long, typed in small font, with 27 clauses. The arbitration clause provides that if the parties are unable to settle a dispute, disputes “within the jurisdictional maximum for small claims will be settled in the small claims court.” All other disputes shall be settled by arbitration in accordance with the Federal Arbitration Act. The clause prohibits consolidating claims in arbitration or arbitrating any claim as a representative member of a class or in a private attorney general capacity. All parties may examine up to three witnesses per party. Each deposition is limited to two hours. Any objections based on privilege and/or confidential information are reserved for arbitration. The arbitrators have authority to award actual monetary damages only. No punitive or equitable relief is authorized. All parties bear their own costs; no attorney’s fees or other costs may be granted. "The arbitrator’s decision shall be final and legally binding and judgment may be entered thereon.” De Melo’s native language is Portuguese; he cannot fully understand documents written in English. No one asked if he wanted the documents translated nor explained the documents. He was not given time to carefully review the documents; no one told him he could have an attorney review them. De Melo filed a claim with the Labor Commissioner, seeking unpaid overtime, meal, and rest period wages, reimbursement of unlawful wage deductions and business expenses, and statutory penalties. (Lab. Code, 203, 226, 2802.) . The court of appeal affirmed the denial of a petition to compel arbitration, finding that the arbitration clause was procedurally and substantively unconscionable and that severance of the substantively unconscionable provisions was not possible because the clause was permeated with unconscionability. View "Subcontracting Concepts (CT), LLC v. De Melo" on Justia Law

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The Court of Appeal reversed the trial court's denial of Sohnen's motion to compel arbitration of workplace discrimination claims brought by plaintiff, an employee of Sohnen. The court held that the record demonstrated consent to arbitration where plaintiff's continued employment was a manifestation of agreement to the arbitration provisions. The court also held that plaintiff failed to demonstrate that the arbitration agreement was unenforceable where the record contained no evidence of surprise, nor of sharp practices demonstrating substantive unconscionability. Accordingly, the court remanded for further proceedings. View "Diaz v. Sohnen Enterprises" on Justia Law

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The Eighth Circuit reversed the district court's order vacating an arbitration award reinstating a union member to his former position without back pay after he was discharged by the company. The court held that the arbitrator was at least arguably construing the contract between the parties in making the award. In this case, the arbitrator explained at length why he interpreted the contract to allow for review of the discipline and, even if there was serious error in the analysis, the arbitrator was arguably construing the contract. Furthermore, under the arbitrator's decision, the absolute cause provision established conduct for which the company has an absolute right to impose discipline, even though it did not give the company unfettered authority to select discharge as the appropriate penalty. Accordingly, the court remanded with directions to confirm the arbitration award. View "CenterPoint Energy Resources Corp. v. Gas Workers Union" on Justia Law

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This appeal arose from fourteen lawsuits brought by various plaintiffs against (1) Laura Willis, an insurance agent; (2) Jesse Dantice, the insurance broker who hired Willis and made her the agent in charge of the insurance office; (3) their insurance agency, Southern Risk Insurance Services, LLC (Southern Risk), and (4) six insurance companies for which their office sold policies (the Insurers). The plaintiffs in the lawsuits were Willis's customers (the Insureds) and other insurance agents (the Agents) in competition with Willis and Southern Risk. The Insureds filed twelve of the lawsuits, asserting claims against Willis, Dantice, and Southern Risk for, inter alia, violations of the Unfair Trade Practices Act (UTPA), common law unfair trade practices, fraud, and conversion. They also named the Insurers as defendants on a respondeat superior theory of liability for failing to adequately supervise or audit Willis and Southern Risk. The question before the South Carolina Supreme Court was whether arbitration should have been enforced against nonsignatories to a contract containing an arbitration clause. The circuit court denied the motion to compel arbitration. The court of appeals reversed and remanded, holding equitable estoppel was applicable to enforce arbitration against the nonsignatories. The Supreme Court reversed and remanded, finding the circuit court properly denied the motion to compel arbitration. View "Wilson v. Willis" on Justia Law

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The Supreme Court affirmed the decision of the district court granting Prospect Funding Holdings, LLC's (Prospect) motions to confirm arbitration awards and for summary judgment in this interpleader action, holding that when Prospect moved to confirm the arbitration awards under section 9 of the Federal Arbitration Act (FAA), 9 U.S.C. 1 through 16, the district court was required by the FAA to do so. After selling an interest in her personal injury claim to Prospect, Edrie Wheat settled her claim. When a dispute arose over the amount due Prospect, Prospect initiated arbitration proceedings against Wheat and Ronald J. Palagi, P.C., LLC (Palagi), the law firm representing Wheat. Awards were eventually entered against Wheat and Palagi in favor of Prospect. Wheat and Palagi then brought this interpleader action but did not seek to vacate, modify, or correct the arbitration awards. The district court granted Prospect's motion to confirm the arbitration awards and also granted Prospect's motion for summary judgment. The Supreme Court affirmed, holding (1) summary judgment was not premature; and (2) the district court did not err in failing to find the agreement was invalid and unenforceable. View "Ronald J. Palagi, P.C. v. Prospect Funding Holdings" on Justia Law