Justia Arbitration & Mediation Opinion Summaries

Two plaintiffs, Smith-Phifer and Patterson, served with the Charlotte Fire Department for over twenty years and alleged racial discrimination by the department. They filed a lawsuit against the City of Charlotte, claiming violations of Title VII, 42 U.S.C. §§ 1981 & 1983, and the North Carolina Constitution. The case was initially brought in state court but was removed to federal court. Smith-Phifer and the City reached a settlement during her trial, while Patterson's case was delayed due to illness and later went to mediation.The United States District Court for the Western District of North Carolina granted Smith-Phifer and Patterson’s motions to enforce their settlement agreements. The court found that the City breached the agreements by not treating the settlement payments as pension-eligible wages under the Charlotte Firefighters Retirement Systems Act. The City appealed, arguing that the district court erred in its decision, particularly in not holding an evidentiary hearing for Patterson’s case and in its interpretation of the settlement terms regarding pension eligibility.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court vacated the district court’s order regarding Patterson, stating that an evidentiary hearing was necessary to determine whether a complete settlement agreement was reached. The court found that there were unresolved factual disputes about the terms of the agreement, particularly regarding sick leave and pension eligibility.However, the court affirmed the district court’s decision regarding Smith-Phifer. It held that the City breached the settlement agreement by failing to make the required retirement deduction from the payment to Smith-Phifer. The court concluded that the payment was “Compensation” under the Charlotte Firefighters Retirement Systems Act, which mandated the deduction. The case was remanded for further proceedings consistent with these findings. View "Smith-Phifer v. City of Charlotte" on Justia Law

During the COVID-19 pandemic, Kalitta Air, LLC implemented a vaccine mandate for all its employees. Employees who could not receive a vaccination due to a disability or a sincerely held religious belief could request an accommodation and would be placed on unpaid leave. If they remained unvaccinated after the leave period, they could either voluntarily resign or be terminated. Eleven employees, including five pilots, sued Kalitta under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act, claiming that the mandate discriminated against them based on their religious beliefs and/or disabled status.The district court found that the Railway Labor Act precluded it from hearing certain claims by the pilots, who were subject to a collective bargaining agreement. These claims had to first go through arbitration as minor disputes. The pilots appealed this decision.The United States Court of Appeals for the Sixth Circuit affirmed the district court's decision. The court found that the pilots' claims under Title VII and the Americans with Disabilities Act required interpretation of the collective bargaining agreement, and thus were minor disputes that had to be resolved through arbitration. The court also held that the pilots' claim of discrimination based on perceived disability would require interpretation of the collective bargaining agreement, and was therefore also precluded by the Railway Labor Act. View "Odell v. Kalitta Air, LLC" on Justia Law

In this case, the plaintiff, Jason Schwebke, brought a lawsuit against his employer, United Wholesale Mortgage (UWM), alleging disability discrimination under state and federal law. Schwebke, who is deaf, claimed that UWM failed to provide him with necessary accommodations and retaliated against him. In response, UWM participated in extensive discovery procedures for several months without invoking its right to arbitration as per the parties' employment agreement.Seven months into the case, UWM moved to compel arbitration. The district court denied this motion, reasoning that UWM had implicitly waived its right to compel arbitration through its conduct. On appeal, the United States Court of Appeals for the Sixth Circuit affirmed the district court's decision.The appellate court applied the principle from the Supreme Court's decision in Morgan v. Sundance, Inc., which held that a party may waive its contractual right to arbitrate by participating in litigation. In applying this rule, the court found that UWM's actions—participating in extensive discovery, failing to raise arbitration in its defense, and not moving to compel arbitration until seven months into the case—were completely inconsistent with reliance on the arbitration agreement. The court therefore concluded that UWM had implicitly waived its right to arbitration. View "Schwebke v. United Wholesale Mortgage LLC" on Justia Law

Petitioner was employed at Office Depot as a senior financial analyst. He was responsible for, among other things, ensuring data integrity. One of Ronnie’s principal duties was to calculate and report a metric called “Sales Lift.” Sales Lift is a metric designed to quantify the cost-reduction benefit of closing redundant retail stores. Petitioner identified two potential accounting errors that he believed signaled securities fraud related to the Sales Lift. Petitioner alleged that after he reported the issue, his relationship with his boss became strained. Eventually, Petitioner was terminated at that meeting for failing to perform the task of identifying the cause of the data discrepancy. Petitioner filed complaint with the Department of Labor’s Occupational Safety and Health Administration (OSHA), and OSHA dismissed his complaint. Petitioner petitioned for review of the ARB’s decision.
The Eleventh Circuit denied the petition. The court explained that Petitioner failed to allege sufficient facts to establish that a reasonable person with his training and experience would believe this conduct constituted a SOX violation, the ARB’s decision was not arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with the law. The court wrote that Petitioner’s assertions that Office Depot intentionally manipulated sales data and that his assigned task of investigating the discrepancy was a stalling tactic are mere speculation, which alone is not enough to create a genuine issue of fact as to the objective reasonableness of Petitioner’s belief. View "Chris Ronnie v. U.S. Department of Labor" on Justia Law

Plaintiff sued The Savannah College of Art and Design, Inc. (“SCAD”) for race discrimination and retaliation after he was fired from his job as Head Fishing Coach. As part of his employment onboarding, however, Plaintiff signed a document agreeing to arbitrate—not litigate—all legal disputes that arose between him and SCAD. Accordingly, SCAD moved to dismiss and compel arbitration. The district court, approving and adopting the magistrate judge’s Report and Recommendation (“R & R”), granted SCAD’s motion. On appeal, Plaintiff argued that the district court erred by ignoring that his agreement with SCAD was unconscionable and that SCAD waived its right to arbitrate. He also argued that the district court abused its discretion in rejecting his early discovery request.   The Eleventh Circuit affirmed the district court’s order granting SCAD’s motion to dismiss and compel arbitration. The court concluded that the Plaintiff’s arbitration agreement is neither substantively nor procedurally unconscionable. Further, the court found that SCAD did not waive its right to enforce arbitration and that the district court did not abuse its discretion in overruling Plaintiff’s request for early discovery. In short, the court concluded that Plaintiff is bound by his agreement to arbitrate his legal claims against SCAD. View "Isaac Payne v. Savannah College of Art and Design, Inc." on Justia Law

Petitioner is a former employee of International Business Machines Corporation (“IBM”) who signed a separation agreement requiring confidential arbitration of any claims arising from her termination. Petitioner arbitrated an age-discrimination claim against IBM and won. She then filed a petition in federal court under the Federal Arbitration Act (“FAA”) to confirm the award, attaching it to the petition under seal but simultaneously moving to unseal it. Shortly after she filed the petition, IBM paid the award in full. The district court granted Petitioner’s petition to confirm the award and her motion to unseal. On appeal, IBM argued that (1) the petition to confirm became moot once IBM paid the award, and (2) the district court erred in unsealing the confidential award.   The Second Circuit vacated the district court’s confirmation of the award and remanded with instructions to dismiss the petition as moot. The court reversed the district court’s grant of the motion to unseal. The court explained that Petitioner’s petition to confirm her purely monetary award became moot when IBM paid the award in full because there remained no “concrete” interest in enforcement of the award to maintain a case or controversy under Article III. Second, any presumption of public access to judicial documents is outweighed by the importance of confidentiality under the FAA and the impropriety of Petitioner’s effort to evade the confidentiality provision in her arbitration agreement. View "Stafford v. Int'l Bus. Machs. Corp." on Justia Law

Plaintiff worked for Tug Hill Operating, LLC, for approximately a year and a half at rig sites in West Virginia. He commenced an action against Tug Hill under the Fair Labor Standards Act (“FLSA”), alleging that while Tug Hill formally classified him as an independent contractor, he actually qualified as an employee for purposes of the FLSA based on the degree of control that Tug Hill exercised over his work. He, therefore, claimed that Tug Hill was required to pay him overtime for those weeks in which he worked more than 40 hours. Tug Hill filed a motion to dismiss Plaintiff’s action on the ground that Plaintiff was contractually required to arbitrate his claim against it. In addition, RigUp itself filed a motion to intervene in order to seek the action’s dismissal in favor of arbitration. The district court granted both motions.   The Fourth Circuit reversed both rulings and remanded. The court explained that the numerous provisions in the Agreement preclude any conclusion that the Agreement was entered into solely or directly for the benefit of Tug Hill, such that Tug Hill could enforce it as a third-party beneficiary. Accordingly, the district court erred in granting Tug Hill’s motion to dismiss and compelling Plaintiff, under the arbitration agreement between him and RigUp, to proceed to arbitration with respect to his FLSA claim against Tug Hill. Moreover, the court explained that because RigUp’s agreement with Plaintiff expressly disclaimed any interest in any litigation, Plaintiff might have with a company in Tug Hill’s position RigUp cannot now opportunistically claim that intervention is necessary. View "Lastephen Rogers v. Tug Hill Operating, LLC" on Justia Law

Plaintiffs are twenty-six former employees of International Business Machines Corporation (“IBM”) who signed separation agreements requiring them to arbitrate any claims arising from their termination by IBM. The agreements set a deadline for initiating arbitration and included a confidentiality requirement. Plaintiffs missed the deadline but nonetheless tried to arbitrate claims under the Age Discrimination in Employment Act of 1967 (“ADEA”). Their arbitrations were dismissed as untimely. They then sued IBM in district court, seeking a declaration that the deadline is unenforceable because it does not incorporate the “piggybacking rule,” a judge-made exception to the ADEA’s administrative exhaustion requirements. Shortly after filing suit, Plaintiffs moved for summary judgment and attached various documents obtained by Plaintiffs’ counsel in other confidential arbitration proceedings. IBM moved to seal the confidential documents. The district court granted IBM’s motions to dismiss and seal the documents. On appeal, Plaintiffs argued that (1) the filing deadline in their separation agreements is unenforceable and (2) the district court abused its discretion by granting IBM’s motion to seal.   The Second Circuit affirmed. The court first wrote that the piggybacking rule does not apply to arbitration and, in any event, it is not a substantive right under the ADEA. Second, the court held that the presumption of public access to judicial documents is outweighed here by the Federal Arbitration Act’s (“FAA”) strong policy in favor of enforcing arbitral confidentiality provisions and the impropriety of counsel’s attempt to evade the agreement by attaching confidential documents to a premature motion for summary judgment. View "In re IBM Arb. Agreement Litig." on Justia Law

Plaintiff sued her former employer Xceed Financial Credit Union (Xceed) for wrongful termination and age discrimination in violation of the Fair Employment and Housing Act (FEHA). The case was submitted to binding arbitration pursuant to the stipulation of the parties. The arbitrator granted summary judgment in favor of Xceed on the ground Plaintiff’s claims were barred by a release in her separation agreement. The arbitrator rejected Plaintiff’s assertion that the release violated Civil Code section 1668, which prohibits pre-dispute releases of liability in some circumstances. Plaintiff moved to vacate the arbitration award, arguing the arbitrator exceeded his powers by enforcing an illegal release. The trial court denied the motion to vacate and entered judgment confirming the arbitration award.   The Second Appellate District affirmed. The court held that the arbitrator’s ruling for clear error. The arbitrator correctly ruled the release did not violate Civil Code section 1668. Plaintiff signed the separation agreement after she was informed of the decision to terminate her but before her last day on the job. At the time she signed, she already believed that the decision to terminate her was based on age discrimination and that she had a valid claim for wrongful termination. The alleged violation of FEHA had already occurred, even though the claim had not yet fully accrued. Accordingly, the release did not violate section 1668 because it was not a release of liability for future unknown claims. View "Castelo v. Xceed Financial Credit Union" on Justia Law

After being fired by his employer, Anheuser-Busch Companies, LLC, Intervenor filed suit in federal district court, alleging that his termination reflected racial discrimination and retaliation in violation of Title VII. Anheuser-Busch filed a motion seeking to compel arbitration of Intervenor’s district court claims, asserting that at the time when he was hired, Intervenor had agreed to be bound by the company’s Dispute Resolution Policy. Intervenor disagreed that he was required to arbitrate his claims. After Anheuser-Busch asked the district court to compel arbitration, Intervenor filed an unfair labor practice charge with the NLRB, arguing that Defendant’s efforts to enforce its arbitration agreement contravened the collective bargaining agreement and constituted a unilateral change to the terms of Intervenor’s employment, in violation of the National Labor Relations Act (“NLRA”).   The Eleventh Circuit granted the petition for review of the Board’s order dismissing the complaint, vacated the decision of the Board, and remanded for consideration of whether enforcement of the Dispute Resolution Policy against Intervenor would violate the NLRA. The court held that the Board applied an erroneously narrow standard for determining whether Anheuser-Busch’s motion had an illegal objective. The court explained that on remand, the Board should instead determine whether the outcome sought by Anheuser-Busch’s motion— the compelled arbitration of Brown’s Title VII claims under the Dispute Resolution Policy—would violate the NLRA. If the Board decides that the answer to that question is “yes,” it should then order all relief that is appropriate based on Anheuser-Busch’s unlawful conduct. View "International Brotherhood of Teamsters Local 947 v. National Labor Relations Board" on Justia Law