Justia Arbitration & Mediation Opinion Summaries

SSC Selma Operating Company, LLC, doing business as Warren Manor Health and Rehabilitation Center, and SavaSeniorCare Administrative Services, LLC, appealed a circuit court order denying their motion to compel arbitration of a retaliatory-discharge claim filed against them by Jackie Fikes. Fikes sued the companies, seeking to recover worker's compensation benefits pursuant to the Alabama Workers' Compensation Act, and alleging that the companies had discharged her from her employment in violation of Ala. Code 1975, sec. 25–5–11.1, solely because she had filed a claim for worker's compensation benefits. Fikes alleged that in 2013, she suffered a work-related injury when she attempted to lift a patient while working for the companies as a certified nurse assistant; that she underwent medical treatment for her work-related injury; and that she returned to work under light-duty restrictions until Spring 2014, at which time, she says, the companies wrongfully terminated her employment. Fikes requested in the complaint that the worker's compensation claim and the retaliatory-discharge claim be severed in order for the retaliatory discharge claim to be tried by a jury. The companies moved to compel arbitration of the retaliatory discharge claim pursuant to their employment-dispute resolution program ("the EDR program") under which Fikes had agreed to be bound. Fikes responded, arguing that the retaliatory-discharge claim was not covered by the EDR program. After review, the Alabama Supreme Court concluded Fikes failed to demonstrate her retaliatory-discharge claim was not covered by the EDR program. Accordingly, the Court reversed the trial court's order denying the companies' motion to compel arbitration of that claim. View "SSC Selma Operating Company, LLC v. Fikes" on Justia Law

Fair Labor Standards Act claims, not dependent on interpretation of collective bargaining agreement, need not be arbitrated, where arbitration clause does not include a clear waiver.Certified nursing assistants, sued their employer, Silver Care, for violations of the Fair Labor Standards Act (FLSA) and related New Jersey laws, claiming that Silver underpaid them for overtime by failing to include certain hourly wage differentials in the calculation of plaintiffs’ regular rate of pay, and by deducting plaintiffs’ half-hour meal breaks from their total hours worked, although they often worked through those breaks. Silver unsuccessfully moved to dismiss or to stay the proceedings, citing the arbitration clause in the governing collective bargaining agreement (CBA). The Third Circuit affirmed. A court may compel arbitration of a plaintiff’s federal statutory claim when the arbitration provision clearly and unmistakably waives the employee’s ability to vindicate that right in court and the federal statute does not exclude arbitration as an appropriate forum. If no clear or unmistakable waiver exists, arbitration may be compelled if the plaintiff’s FLSA claim “depends on the disputed interpretation of a CBA provision,” which must “first go to arbitration.” Silver did not dispute that the arbitration provision lacks a clear and unmistakable waiver. Neither of the FLSA claims depend on disputed interpretations of CBA provisions. View "Jones v. SCO Silver Care Operations LLC" on Justia Law

In 2009, Jacquelyn Jacks bought a manufactured home from CMH Homes, Inc., on an installment plan. The purchase was financed through CMH Homes under a manufactured home retail installment contract. The contract contained an arbitration agreement, which provides that all disputes arising from, or relating to, the contract would be resolved by binding arbitration. By its terms, the agreement also covered all co-signors and guarantors, and any occupants of the manufactured Home (as intended beneficiaries of the arbitration agreement. Jacks moved into the home with her husband and their children. Five years later, the Jacks family sued CMH Homes, CMH Manufacturing, and Vanderbilt Mortgage and Finance (not a party to this appeal). They claimed: (1) CMH negligently installed and repaired the manufactured home’s water system, which caused toxic mold to grow; (2) the manufactured home was unreasonably dangerous at the time it left the control of CMH; (3) the manufactured home was not fit for habitation. Jacks also sought to rescind her purchase of the manufactured home, along with her agreement to pay Vanderbilt Mortgage and Finance the indebtedness incurred to purchase the home. The CMH defendants removed the case from state to federal court and moved to compel arbitration and stay the court proceedings. The district court granted the motion to compel as to the claims of Jacks, but denied the motion as to the remaining plaintiffs who were not parties to the installment contract. Defendants had argued that Jacks’ husband and their children were likewise bound by the arbitration agreement, even though they never signed the contract. The district court held that “the single sentence in the Arbitration Agreement generically referencing ‘any occupants of the Manufactured Home (as intended beneficiaries of this Arbitration Agreement)’ was not sufficient to make the nonsignatory plaintiffs third party beneficiaries of the Arbitration Agreement and subject to being compelled to arbitration. The district court also rejected Defendants’ contention that the nonsignatory plaintiffs were “bound to arbitrate their claims” under “the doctrine of equitable estoppel.” Defendants timely appealed the district court’s partial denial of their motion to stay and to compel arbitration. The Tenth Circuit found no reversible error in the district court’s judgment and affirmed it. View "Jacks v. CMH Homes" on Justia Law

Temporary staffing company Real Time Staffing Services, LLC doing business as Select Staffing (Real Time) hired Garcia in 2011 as an hourly employee. Real Time then assigned Garcia to work for Pexco, LLC. As part of the hiring process with Real Time, Garcia filled out an employment application which included an arbitration agreement between Garica and Real Time. Pexco was not a signatory to the arbitration agreement. Garcia filed suit against Real Time, Pexco, and Aerotek, Inc. for violations of the Labor Code and unfair business practices pertaining to payment of wages during his assignment with Pexco. The operative complaint alleged “each and every one of the acts and omissions alleged herein was performed by, and/or attributable to, all DEFENDANTS, each acting as agents and/or employees, and/or under the direction and control of each of the other DEFENDANTS, and that said acts and failures to act were within the course and scope of said agency, employment and/or direction and control.” Each cause of action in the operative complaint was alleged against “All Defendants” and no distinction was made between Real Time or Pexco. Real Time and Pexco moved to compel individual arbitration of Garcia’s claims. The trial court granted the motion to compel arbitration. Garcia appealed the order granting Pexco’s motion to compel individual arbitration. The Court of Appeal found Garcia was equitably estopped from denying Pexco’s right to arbitrate and the agency exception applied. View "Garcia v. Pexco, LLC" on Justia Law

Dismissal for failure to exhaust collective bargaining agreement (CBA) grievance process was improper where it was unclear that CBA required resort to that process for claims under Fair Labor Standards Act (FLSA).Vega worked for Forest as a seasonal employee, subject to a CBA that included a mandatory four-step procedure culminating in arbitration to resolve employee grievances. Forest terminated Vega. At the time, Vega was owed compensation for 54 hours of work in the preceding two weeks. Forest did not tender a final paycheck, purportedly because it discovered that Vega lacked a valid Social Security number and it did not know how to lawfully make payment to him without such a number. The parties dispute whether Vega made efforts to initiate a grievance. The district court dismissed Vega’s suit under the FLSA, 29 U.S.C. 206(b), for failure to exhaust the grievance procedure. The Seventh Circuit reversed, stating that the collective bargaining agreement did not clearly and unmistakably waive Vega’s right to pursue his FLSA claim in a judicial forum. The district court did not consider whether the CBA required Vega to resort to the grievance process when he is pursuing rights granted to him by the FLSA rather than the contract itself. View "Vega v. New Forest Home Cemetery, LLC" on Justia Law

Kentucky ruling that authority to bind a principal to arbitration must be explicitly stated in power of attorney violated the Federal Arbitration Act.When the patients moved into Kindred’s nursing home, their relatives used powers of attorney to complete necessary paperwork, including an agreement that any claims arising from the patient’s stay at Kindred would be resolved through binding arbitration. After the patients died, their estates filed suits alleging that Kindred’s substandard care had caused their deaths. The trial court denied Kindred’s motions to dismiss. The Kentucky Supreme Court affirmed, finding the arbitration agreements invalid because neither power of attorney specifically entitled the representative to enter into an arbitration agreement. Because the Kentucky Constitution declares the rights of access to the courts and trial by jury to be “sacred,” the court reasoned, an agent could deprive her principal of such rights only if expressly provided in the power of attorney. The U.S. Supreme Court reversed. The Kentucky Supreme Court’s clear-statement rule violates the Federal Arbitration Act, 9 U.S.C. 2, by singling out arbitration agreements for disfavored treatment. The Act preempts any state rule that discriminates on its face against arbitration or that covertly accomplishes the same objective by disfavoring contracts that have the defining features of arbitration agreements. The FAA is concerned with both the enforcement and initial validity of arbitration agreements. View "Kindred Nursing Centers, L. P. v. Clark" on Justia Law

In 2004, George and Thelma Nickola, were injured in a car accident. The driver of the other car was insured with a no-fault insurance policy provided the minimum liability coverage allowed by law: $20,000 per person, up to $40,000 per accident. The Nickolas’ (acting through their attorney) wrote to their insurer, defendant MIC General Insurance Company, explaining that the no-fault liability insurance policy was insufficient to cover the Nickolas' injuries. The letter also advised MIC that the Nickolas were claiming UIM benefits under their automobile policy. The Nickolas’ policy provided for UIM limits of $100,000 per person, up to $300,000 per accident, and they sought payment of UIM benefits in the amount of $160,000; $80,000 for each insured. An adjuster for defendant MIC denied the claim, asserting that the Nickolas could not establish a threshold injury for noneconomic tort recovery. The matter was ultimately ordered to arbitration, the outcome of which resulted in an award of $80,000 for George’s injuries and $33,000 for Thelma’s. The award specified that the amounts were “inclusive of interest, if any, as an element of damage from the date of injury to the date of suit, but not inclusive of other interest, fees or costs that may otherwise be allowable.” The trial court affirmed the arbitration awards but declined to award penalty interest under the UTPA, finding that penalty interest did not apply because the UIM claim was “reasonably in dispute” for purposes of MCL 500.2006(4). The Court of Appeals affirmed the trial court, holding that the “reasonably in dispute” language applied to plaintiff’s UIM claim because a UIM claim “essentially” places the insured in the shoes of a third-party claimant. The Michigan Supreme Court held that an insured making a claim under his or her own insurance policy for UIM benefits cannot be considered a “third party tort claimant” under MCL 500.2006(4). The Court reversed the Court of Appeals denying plaintiff penalty interest under the UTPA, and remanded this case back to the trial court for further proceedings. View "Estate of Nickola v MIC General Ins. Co." on Justia Law

Plaintiff filed suit against his former employer, GE, alleging claims of discrimination and retaliation. The district court granted GE's motion to compel arbitration and dismissed the case, only to reopen it later to withdraw its prior order compelling the arbitration. The Fifth Circuit held that the district court lacked subject matter jurisdiction to withdraw its order compelling arbitration and reopen the case due to a default in the arbitral process. Therefore, the Fifth Circuit vacated and remanded for further proceedings, noting that the district court's jurisdiction was limited to determining whether an agreement to arbitrate still existed and enforcing that agreement. View "Salas v. GE Oil & Gas" on Justia Law

The First Circuit answered two questions of first impression regarding the Federal Arbitration Act (FAA) by holding (1) in a case where a federal district court is confronted with a motion to compel arbitration under the FAA and the parties have delegated questions of arbitrability to the arbitrator, the applicability of the FAA is a threshold question for the court to determine before compelling arbitration under the FAA; and (2) a provision of the FAA that exempts contracts of employment of transportation workers from the FAA’s coverage applies to a transportation-worker agreement that purports to establish an independent-contractor relationship. Accordingly, the First Circuit affirmed the district court’s order denying the motion to compel arbitration and dismissed this appeal for lack of appellate jurisdiction. View "Oliveira v. New Prime, Inc." on Justia Law

Arbitration is a contractual agreement between parties. And only agreed-upon arbitrable disputes are subject to arbitration. On de novo review, the Mississippi Supreme Court found in this case a valid arbitration agreement, but the subject of the lessee’s premises-liability claim (a dispute that stemmed from a physical and sexual assault on the apartment complex premises) was not within the arbitration agreement’s scope, as it did not arise under or relate to her “occupancy and leasing of the [apartment].” Because the dispute was outside the agreement’s scope, the trial court erred by staying proceedings and ordering arbitration. View "Jane Doe v. Hallmark Partners, LP" on Justia Law