Justia Arbitration & Mediation Opinion Summaries

Articles Posted in Civil Rights
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Plaintiff, a Missouri resident, filed suit in state court against her former employer, Ferrellgas, a propane supplier, as well as James Ferrell and Pamela Brueckmann, Kansas residents and employees and officers of Ferrellgas. Plaintiff alleged gender discrimination claims under the Missouri Human Rights Act against Ferrellgas (Counts I and II), and tort claims against all defendants (Counts IIIVI). After removal to the district court, the district court granted defendants' motion to compel arbitration in part.The Eighth Circuit reversed, concluding that the district court erred in concluding that no language in plaintiff's employment agreement suggested that she consented to arbitrate tort claims arising from actions which predated her employment. The court explained that, though plaintiff's claims are based on alleged misrepresentations and omissions made before and at the time she accepted employment, they are subject to arbitration because they arise out of and relate to the resulting employee agreement and employee relationship. The court also concluded that Ferrell and Brueckmann, officers and agents of Ferrellgas who were not parties to the Employee Agreement, may enforce the arbitration clause. The court concluded that a signatory plaintiff cannot avoid arbitration when she treated signatory and non-signatory defendants as a single unit. In this case, each of plaintiff's tort claims against defendants is a single one that should be referred in its entirety to arbitration. View "Morgan v. Ferrell" on Justia Law

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Defendant appealed from an order denying its petition to compel arbitration of Labor Code claims pursued by former employees, who contend that their lawsuit is limited to recovering civil penalties under the Private Attorneys General Act of 2004 (PAGA).The Court of Appeal again interpreted the California Supreme Court's decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, to mean "that PAGA representative claims for civil penalties are not subject to arbitration" under a predispute arbitration agreement. In this case, the PAGA claims alleged in the former employees' complaint are owned by the state and are being pursued by the former employees as the state's agent or proxy. The court explained that the arbitration agreements at issue are not enforceable as to the PAGA claims because the state was not a party to, and did not ratify, any of those agreements. Furthermore, after the former employees became representatives of the state, they did not agree to arbitrate the PAGA claims. Consequently, under the rule of California law recognized in Esparza v KS Industries, L.P. (2017) 13 Cal.App.5th 1228, 1234, and many other decisions of the Court of Appeal, the court concluded that the PAGA claims cannot be forced into arbitration based on agreements made by the former employees before they became authorized representatives of the state. Accordingly, the trial court correctly applied this rule of law.The court also concluded that defendant's argument that arbitration is compelled by the Federal Arbitration Act (FAA) and federal preemption fails for similar reasons. The court concluded that the FAA does not reach the PAGA claims alleged in this case and, therefore, federal law does not preempt the rule of California law stating PAGA claims are subject to arbitration only if the state, or the state’s authorized representative, consents to arbitration. View "Herrera v. Doctors Medical Center of Modesto, Inc." on Justia Law

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The Supreme Court conditionally granted mandamus relief in this arbitration dispute, holding that the trial court abused its discretion in determining that pre-arbitration discovery was warranted in this case.After Plaintiff's employment was terminated she sued Defendant, her former employer, claiming discrimination and retaliation. Defendant moved to compel arbitration pursuant to the company's employee handbook acknowledgment and agreement, which contained an arbitration agreement. At issue was Plaintiff's second motion to compel pre-arbitration discovery claiming that an enforceable arbitration agreement did not exist. After the trial court granted the motion Defendant sought mandamus relief. The court of appeals denied the motion. The Supreme Court conditionally granted mandamus relief, holding that the trial court clearly abused its discretion in ordering pre-arbitration discovery because Plaintiff failed to provide the trial court with a reasonable basis to conclude that it lacked sufficient information to determine whether her claims were arbitrable. View "In re Copart, Inc." on Justia Law

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The Supreme Court granted a writ of prohibition prohibiting the circuit court from enforcing its order denying Petitioners' motion to dismiss or, in the alternative, to compel arbitration, holding that the circuit court erred in finding that the arbitration agreement put forth by Petitioners was not authentic.After her employment ended, Respondent filed a lawsuit alleging wrongful and discriminatory discharge. Petitioners filed a motion to dismiss/compel arbitration, asserting that this matter was subject to a valid and binding arbitration agreement. The circuit court denied the motion, concluding that significant questions existed with regard to the authenticity of the arbitration agreement. Petitioners then filed the instant petition for a writ of prohibition seeking to prevent enforcement of the circuit court's order. The Supreme Court granted the requested writ, holding that the circuit court committed clear legal error in denying Petitioners' motion to dismiss or, in the alternative, to compel arbitration by finding the arbitration agreement was not authentic. View "State ex rel. Troy Group v. Honorable David J. Sims" on Justia Law

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Epstein, an optometrist, entered into a VSP “Network Doctor Agreement.” VSP audited of Epstein’s claims for reimbursement, concluded he was knowingly purchasing lenses from an unapproved supplier, and terminated the provider agreement. The agreement included a two-step dispute resolution procedure: the “Fair Hearing” step provided for an internal “VSP Peer Review.” If the dispute remained unresolved, the agreement required binding arbitration under the Federal Arbitration Act (FAA), under procedures set forth in the policy. A “Fair Hearing” panel upheld the termination.Instead of invoking the arbitration provision, Epstein filed an administrative mandamus proceeding, alleging the second step of the process was contrary to California law requiring certain network provider contracts to include a procedure for prompt resolution of disputes and expressly stating arbitration “shall not be deemed” such a mechanism. (28 Cal. Code Regs 1300.71.38.) He claimed that state law was not preempted by the FAA, citing the McCarran-Ferguson Act, which generally exempts from federal law, state laws enacted to regulate the business of insurance.The court of appeal affirmed the rejection of those challenges. State regulatory law requiring certain network provider agreements to include a dispute resolution process that is not arbitration pertains only to the first step of the dispute resolution process and does not foreclose the parties from agreeing to arbitration in lieu of subsequent judicial review. While the arbitration provision is procedurally unconscionable in minor respects, Epstein failed to establish that it is substantively unconscionable. View "Epstein v. Vision Service Plan" on Justia Law

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Pfizer’s Human Resources Department sent an e-mail to Pfizer employees at their corporate e-mail addresses announcing Pfizer’s five-page Mutual Arbitration and Class Waiver Agreement (Agreement) and included a link to that document. The e-mail also included a included a link to a document that listed “Frequently Asked Questions,” including “Do I have to agree to this?” to which the response indicated, “The Arbitration Agreement is a condition of continued employment with the Company. If you begin or continue working for the Company sixty (60) days after receipt of this Agreement, it will be a contractual agreement that binds both you and the Company.” The “FAQs” document also encouraged any employee who had “legal questions” about the Agreement “to speak to [his or her] own attorney.” Pfize terminated Amy Skuse's employment in August 2017, and Skuse filed a complaint alleging that Pfizer and the individual defendants violated the Law Against Discrimination by terminating her employment because of her religious objection to being vaccinated for yellow fever. Defendants moved to dismiss the complaint and to compel arbitration. Skuse opposed the motion, contending that she was not bound by Pfizer’s Agreement, arguing that she was asked only to acknowledge the Agreement, not to assent to it, and that she never agreed to arbitrate her claims. The trial court dismissed Skuse’s complaint and directed her to proceed to arbitration in accordance with the Agreement. The Appellate Division reversed, identifying three aspects of Pfizer’s communications to Skuse as grounds for its decision: Pfizer’s use of e-mails to disseminate the Agreement to employees already inundated with e-mails; its use of a “training module” or a training “activity” to explain the Agreement; and its instruction that Skuse click her computer screen to “acknowledge” her obligation to assent to the Agreement in the event that she remained employed for sixty days, not to “agree” to the Agreement. The New Jersey Supreme Court reversed, finding the Agreement was valid and binding, and held the trial court was correct in enforcing it. View "Skuse v. Pfizer, Inc." on Justia Law

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Plaintiffs, a group of current and former retail sales employees of Sterling Jewelers, filed suit alleging that they were paid less than their male counterparts, on account of their gender, in violation of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act. After an arbitrator certified a class of Sterling Jewelers employees that included employees who did not affirmatively opt in to the arbitration proceeding, the district court held that the arbitrator exceeded her authority in purporting to bind those absent class members to class arbitration.The Second Circuit reversed, holding that the arbitrator was within her authority in purporting to bind the absent class members to class proceedings because, by signing the operative arbitration agreement, the absent class members, no less than the parties, bargained for the arbitrator's construction of their agreement with respect to class arbitrability. The court remanded to the district court to consider, in the first instance, the issue of whether the arbitrator exceeded her authority in certifying an opt-out class. View "Jock v. Sterling Jewelers Inc." on Justia Law

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The First Circuit affirmed the order of the district court finding that an arbitration agreement between the parties in this case was enforceable, granting AT&T Mobility Puerto Rico, Inc.’s (AT&T) motion to compel arbitration and dismissing Nereida Rivera-Colon’s (Rivera) suit, holding that Rivera manifested her intent to accept the agreement to arbitrate legal grievances as per Puerto Rico law.Rivera filed suit against AT&T, her former employer, alleging age discrimination and wrongful termination. AT&T entered a special appearance and moved to stay the proceedings and compel arbitration. In response, Rivera argued that there was no valid arbitration agreement. The district court held that the arbitration agreement was enforceable and granted the motion to compel arbitration. The First Circuit affirmed, holding that, under Puerto Rico law, Rivera was bound by the arbitration agreement because she failed to opt out of the agreement. View "Rivera-Colon v. AT&T Mobility Puerto Rico, Inc." on Justia Law

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In this case alleging several violations of federal and state discrimination laws the First Circuit affirmed the decision of the district court denying Defendant’s motion to stay the proceedings in district court and compel arbitration, holding that the contract to arbitration in between the parties was unenforceable.Plaintiffs - several individuals and the National Federation of the Blind - filed a complaint alleging that Defendant - the Container Store, Inc. - failed to utilize tactile keypads on its point-of-sale devices in its stores that could independently be used by customers who are blind in violation of federal and state discrimination laws. Defendant moved to compel arbitration, citing an arbitration provision in the terms and conditions of a loyalty program of which the individual plaintiffs were members. The district court denied the motion. The First Circuit affirmed, holding (1) based upon the lack of evidence that the in-store plaintiffs had any knowledge that arbitration terms applied to their enrollment in the loyalty program, Defendant failed to establish that an agreement to arbitrate was consummated between it and three of the four individual plaintiffs; and (2) the district court did not err in finding that the loyalty program agreement was illusory and therefore void. View "National Federation of the Blind v. Container Store, Inc." on Justia Law

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In this appeal by the Rhode Island Troopers Association from a judgment granting declaratory and equitable relief in favor of the State, the Supreme Court affirmed the first six declarations and vacated the remaining two declarations in the superior court’s judgment.Here, the superior court (1) declared that the Governmental Tort Liability Act, R.I. Gen. Laws chapter 31 of title 9, vests the Attorney General with the nondelegable, nontransferable legal duty to determine whether the State should provide a defense and indemnification in a civil action brought against a state employee; and (2) permanently enjoined arbitration of issues related to the Attorney General’s decision to decline to provide a defense and indemnification for a state trooper in a federal civil rights action brought against him in his individual capacity. The Supreme Court held (1) the trial court properly enjoined the arbitration proceedings because the issues raised were not arbitrable within the collective bargaining process; (2) the superior court properly declared that the Attorney General possesses the nondelegable, nontransferable, sole legal duty to determine whether a state employee was acting within the scope of employment and is therefore entitled to a defense and indemnification; and (3) the remaining two declarations were superfluous to the issues in this case. View "State v. Rhode Island Troopers Ass’n" on Justia Law