Justia Arbitration & Mediation Opinion Summaries

Former employees brought a putative class action against their former employer, NMG, alleging violations of the California Labor Code, and NMG moved to compel arbitration under its mandatory arbitration program for employment-related disputes. NMG submitted evidence that, at the time of plaintiff’s employment (2007-2009), it distributed to each new employee a copy of its “Mandatory Arbitration Agreement,” brochures explaining the arbitration program, and an employee handbook that included a brief description of the program The trial court initially ordered arbitration of all claims except a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) Lab. Code, 2698, but later reconsidered and denied the motion, concluding the arbitration agreement at issue was illusory. The court of appeal affirmed, rejecting arguments that the court lacked jurisdiction to reconsider its initial order; an arbitrator, rather than a court, must determine any challenges to the enforceability of the arbitration agreement; and the arbitration agreement is enforceable and encompasses all claims, including his PAGA claim. The court found multiple unconscionable aspects to the NMG Arbitration Agreement. View "Pinela v. Neiman Marcus Group, Inc." on Justia Law

After the County of Kaua’i and Kaua’i Police Department filled five police sergeant positions through internal promotions, the State of Hawaii Organization of Police Officers (SHOPO) challenged, through the grievance procedures of the collective bargaining agreement (CBA) governing the parties, the non-promotions of three police officers. The parties were unable to resolve the grievances, and the matter was submitted to arbitration. The arbitrator found that the promotions were subjective, arbitrary, and capricious in violation of the CBA and awarded the three officers promotions and back pay. The circuit court vacated the arbitrator’s remedy, concluding that it was beyond the scope of the arbitrator’s authority to award promotions. The intermediate court of appeals (ICA) vacated in part the circuit court’s orders and remanded to the circuit court for confirmation of the arbitrator’s decision in its entirety, concluding that the arbitrator did not exceed his authority in awarding promotions and that the circuit court erred in finding otherwise. The Supreme Court affirmed, holding that the arbitrator acted within the scope of his authority under the CBA. View "In re Grievance Arbitration Between State of Haw. Org. of Police Officers" on Justia Law

Plaintiffs, former employees of Chase, filed a putative class action alleging violations of state and federal overtime laws. The district court denied Chase's motion to compel arbitration. The court affirmed, concluding that the arbitration clause in the employment contracts cover only claims or controversies “required to be arbitrated by the FINRA Rules.” The court agreed with the district court's ruling that it thus incorporated the arbitrability restrictions of the FINRA Code of Arbitration Procedure for Industry Disputes (FINRA Rules) and the district court's application of the current version of FINRA Rule 13204, which prohibits arbitration of claims brought as putative class or collective actions. View "Lloyd v. J.P. Morgan Chase" on Justia Law

Southeast Construction, L.L.C. ("SEC"), appealed a circuit court order that found WAR Construction, Inc., had provided SEC with certain releases as previously ordered by the circuit court and that SEC was accordingly now required to pay the outstanding $263,939 remaining on a $373,939 judgment previously entered on a February 16, 2011, arbitration award obtained by WAR against SEC, along with interest accruing from February 16, 2011. After review, the Supreme Court affirmed that judgment to the extent it held that WAR provided all required releases and that SEC was obligated to fulfill the judgment entered on the arbitration award. However, the Court reversed the judgment inasmuch as it held that SEC is required to pay interest on the award as calculated from February 16, 2011. On remand, the circuit court was instructed to calculate interest on the principal at the rate set forth in the arbitration award accruing from September 8, 2014. View "Southeast Construction L.L.C. v. WAR Construction, Inc." on Justia Law

Gladys Tellis, Sherry Bronson, Gwendolyn Moody, Nadine Ivy, and Uneeda Trammell (collectively, "the policyholders") initiated separate actions against American Bankers Insurance Company of Florida, asserting generally that American Bankers had sold them homeowner's insurance policies providing a level of coverage they could never receive, even in the event of a total loss involving the covered property. American Bankers moved the trial court hearing each action to compel arbitration pursuant to arbitration provisions it alleged were part of the subject policies; however, the trial courts denied those motions, and American Bankers appealed. The Supreme Court consolidated the five appeals for the purpose of writing one opinion, and reversed those orders denying the motions to compel arbitration. The Court based its decision on its holdings that the policyholders manifested their assent to the arbitration provision in their policies by continuing to renew the policies, that the sale of the policies affected interstate commerce, and that the arbitration provision in the policies was not unconscionable. View "American Bankers Ins. Co. of Florida v. Tellis" on Justia Law

Francisco Lopez hired Royston, Rayzor, Vickery & Williams, LLP (the Firm) to represent him in a divorce suit. The attorney-client employment contract between the parties contained an arbitration provision specifying that Lopez and the Firm will arbitrate any disputes that arise between them with the exception of claims made by the Firm for recovery of its fees and expenses. Once the underlying divorce matter was settled, Lopez sued the Firm, claiming that the Firm induced him to accept an inadequate settlement. The Firm moved to compel arbitration. The trial court denied the Firm’s motion. The Firm filed an interlocutory appeal challenging the denial and an original proceeding seeking mandamus under common law. The court of appeals affirmed the trial court’s refusal to order arbitration and denied mandamus relief, concluding that the arbitration provision was so one-sided as to be substantively unconscionable and unenforceable. The Supreme Court reversed, holding that Lopez did not prove that either the arbitration provision was substantively unconscionable or any other defense to the arbitration provision. View "In re Royston, Rayzor, Vickery, & Williams, LLP" on Justia Law

Petitioners sued Respondents. Respondents, represented by counsel, made a settlement offer. The offer subsequently expired. Respondents’ counsel later extended a new settlement offer with terms that mirrored the prior offer. Petitioners’ attorney timely accepted the offer, and the trial court accepted the settlement (February 8 settlement). After Respondents’ attorney learned that he lacked authority to extend the settlement offer, he made a new settlement offer, which materially varied from the February 8 settlement. Petitioners moved to enforce the February 8 settlement. The trial court granted the motion, concluding that Respondents’ attorney had actual and apparent authority to extend the settlement offer and, alternatively, that Respondents were equitably estopped from disputing that authority. The court of appeals reversed, concluding that because Respondents’ assent to the agreement was not in writing, the requirements of Ariz. R. Civ. P. 80(d) were not met, and the agreement was unenforceable as a matter of law. The Supreme Court reversed, holding (1) because the parties in this case did not dispute the existence and terms of the February 8 settlement, Rule 80(d) did not apply; (2) even if Rule 80(d) applied, the agreement satisfied the rule; and (3) the agreement was enforceable because the attorney acted within the apparent authority given by his clients. View "Robertson v. Alling" on Justia Law

Plaintiff entered into a salvage contract with Defendant to obtain help when his boat went aground one night. Plaintiff later attempted to rescind the contract, claiming that he signed the contract under duress and disputing the sum owed to Defendant. The parties submitted the dispute to a panel of arbitrators pursuant to a binding arbitration clause in the salvage contract. Plaintiff then filed this lawsuit seeking a preliminary injunction against the arbitration and a declaration that the salvage contract was unenforceable. The district court denied the motion and stayed the case pending the outcome of the arbitration. The arbitration panel found in favor of Defendant and ordered Plaintiff to pay a salvage award. The district court affirmed the award. Plaintiff appealed, arguing that the district court erred in confirming the arbitration award without first addressing his claim that the arbitration clause was unenforceable. The First Circuit affirmed, holding that, where Plaintiff’s challenge to the validity of the arbitration clause itself came only after Defendant moved to confirm the panel’s award, the district court had no proper basis on which to refuse to confirm the arbitration panel’s award. View "Farnsworth, III v. Towboat Nantucket Sound, Inc." on Justia Law

Suzanne Listro, a social worker employed by the Department of Children and Families, was charged with manslaughter in the first degree and risk of injury to a child after a foster child in her care died. The Department dismissed Listro for cause due to her “serious misconduct.” Listro was later acquitted of the criminal charges. The collective bargaining unit for the Department’s social workers (the Union) filed a grievance on Listro’s behalf challenging her termination. An arbitrator denied Listro’s grievance. The superior court vacated the arbitrator’s award, concluding that the arbitrator exceeded her authority in using negligence as a standard and basis for her award. The Appellate Court reversed, concluding that “negligence arguably came within the purview of the [collective bargaining] agreement” and was an appropriate term of the arbitrator to use to describe Listro’s conduct, which was the basis of her dismissal for just cause. The Supreme Court affirmed, holding that, in light of the just cause provision of the collective bargaining agreement and the notice to Listro that her conduct on the evening of the child's death provided the basis for termination, the trial court improperly granted the Union’s application to vacate the arbitrator’s award. View "AFSCME, Council 4, Local 2663 v. Dep’t of Children & Families" on Justia Law

This case arose from an interest arbitration award that retroactively increased employee health care premiums for a period when there was no enforceable collective bargaining agreement (CBA). The Superior Court struck a portion of the award that granted the retroactive increase, ruling that the award: (1) was an unconstitutional taking in violation of the due process clause; (2) violated Washington's wage rebate act (WRA); and (3) was arbitrary and capricious. Kitsap County appealed this ruling and the Washington Supreme Court granted direct review. Finding the arbitration award proper, the Supreme Court reversed. View "Kitsap County Deputy Sheriffs' Guild v. Kitsap County" on Justia Law