Justia Arbitration & Mediation Opinion Summaries

A company operating stevedoring services at the Port of Mobile, Alabama, entered into a collective bargaining agreement with a union representing longshore workers. The agreement included a no-strike provision and outlined procedures for resolving disputes, including arbitration. After an alleged strike by union members, the company filed a lawsuit in state court seeking a temporary restraining order and later damages for breach of the no-strike provision. The state court issued a restraining order, ending the strike within days. The union subsequently removed the case to federal court, where the company amended its complaint to seek damages, asserting that all conditions precedent for judicial action had been met.In the United States District Court for the Southern District of Alabama, the union moved to compel arbitration, arguing that the dispute should be resolved through the arbitration process outlined in the collective bargaining agreement. The district court denied the motion, concluding that the agreement permitted the company to seek monetary damages in court for violations of the no-strike provision. The union then filed an interlocutory appeal of the order denying arbitration, while the underlying damages action remained pending.The United States Court of Appeals for the Eleventh Circuit reviewed whether it had jurisdiction to hear the interlocutory appeal. The court held that it lacked appellate jurisdiction because the Federal Arbitration Act’s provision for interlocutory appeals does not apply to collective bargaining agreements covering workers engaged in interstate commerce, such as longshoremen. The court also found no basis for jurisdiction under the Labor Management Relations Act or the collateral-order doctrine. Accordingly, the Eleventh Circuit dismissed the appeal for lack of jurisdiction, leaving the district court’s order in place and expressing no opinion on the merits of the underlying dispute. View "APM Terminals Mobile, LLC v. International Longshoremen's Association" on Justia Law

A company that manufactures emergency-use auto-injectors terminated a senior technician after she certified that a probationary employee completed five on-the-job training (OJT) tasks in a single day. The company alleged that this certification was fraudulent and did not comply with its training policies, as the forms lacked supporting documentation and the employee did not demonstrate proficiency. The technician, a qualified trainer, filed a grievance through her union, arguing that it was common practice on her shift to conduct and certify multiple OJTs in one day and that supervisors were aware of these practices.An arbitrator reviewed the grievance under the collective bargaining agreement (CBA) between the company and the union. The arbitrator found that the company failed to prove by a preponderance of the evidence that the technician’s actions were intentionally fraudulent or falsified. The arbitrator also noted that the company’s staffing shortages and established practices contributed to the situation and drew an adverse inference against the company for not calling key supervisors as witnesses. The arbitrator ordered the technician’s reinstatement with back pay and benefits. The United States District Court for the Eastern District of Missouri granted summary judgment to the union, affirming the arbitrator’s award.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s decision de novo for legal conclusions and for clear error on factual findings. The Eighth Circuit held that the arbitrator acted within his authority in interpreting ambiguous terms in the CBA, such as “dishonesty,” and in considering past practices. The court also found that the arbitrator’s adverse inference and allocation of the burden of proof were permissible. Finally, the court concluded that reinstating the technician did not violate any well-defined and dominant public policy. The judgment affirming the arbitrator’s award was affirmed. View "Meridian Medical Technologies, Inc. v. International Brotherhood of Teamsters, Local 688" on Justia Law

A company that provides employee management services hired an employee in California in September 2021. At the start of her employment, she completed onboarding documents that did not mention arbitration. About five months later, she was asked to sign additional documents, including an arbitration agreement, a voluntary dispute resolution policy, and a confidentiality and non-disclosure agreement (CND). The arbitration agreement required most employment-related disputes to be resolved through binding arbitration, with certain exceptions for claims related to confidential information. The CND allowed the company to bring certain claims in court and permitted the company to seek injunctive relief without posting a bond or proving actual damages. The employee later filed a lawsuit alleging various employment law violations.The Solano County Superior Court reviewed the company’s motion to compel arbitration. The company argued that the arbitration agreement was enforceable and, if any provision was found unenforceable, it should be severed. The employee opposed, arguing the agreement was unconscionable due to the manner in which it was presented and its one-sided terms. The trial court found the arbitration agreement to be both procedurally and substantively unconscionable, particularly because it forced the employee’s claims into arbitration while allowing the company’s likely claims to proceed in court, and because of a confidentiality provision that restricted informal discovery. The court denied the motion to compel arbitration and declined to sever the offending provisions, finding the agreement permeated by unconscionability.The California Court of Appeal, First Appellate District, Division Three, affirmed the trial court’s order. The appellate court held that the arbitration agreement and the CND, read together, were unconscionable due to lack of mutuality and an overly broad confidentiality provision. The court also found no abuse of discretion in the trial court’s refusal to sever the unconscionable terms and concluded that any error in denying a statement of decision was harmless. View "Gurganus v. IGS Solutions LLC" on Justia Law

Plaintiff was employed by a staffing company and assigned to work at a warehousing and logistics firm, performing duties as a materials handler and forklift operator. He filed a class action and a separate representative action alleging various wage and hour violations, including claims for unpaid minimum wages, waiting time penalties, and civil penalties under the Private Attorneys General Act (PAGA). The two cases were consolidated. The plaintiff and his direct employer had entered into an arbitration agreement, which referenced the American Arbitration Association (AAA) rules but did not explicitly state that the arbitrator would decide issues of arbitrability.The defendants moved in the Superior Court of Los Angeles County to compel arbitration of the plaintiff’s individual claims, dismiss class allegations, and stay judicial proceedings. They argued that the arbitration agreement was governed by the Federal Arbitration Act (FAA) and that the AAA rules incorporated into the agreement delegated arbitrability issues to the arbitrator. The plaintiff opposed, asserting exemption from the FAA as a transportation worker and arguing that certain claims, including those under PAGA and for unpaid wages, were not arbitrable under California law. The trial court found the FAA did not apply, applied California law, and held that the agreement did not clearly and unmistakably delegate arbitrability to the arbitrator. The court compelled arbitration of some claims but allowed others, including minimum wage and PAGA claims, to proceed in court.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s order. The court held that, in the context of a mandatory employment arbitration agreement, mere incorporation of AAA rules without explicit language in the agreement is not clear and unmistakable evidence of intent to delegate arbitrability to the arbitrator. The court also held that claims for waiting time penalties based on minimum wage violations and all PAGA claims were not arbitrable under California law when the FAA does not apply. View "Villalobos v. Maersk, Inc." on Justia Law

The plaintiff, a former employee, brought a lawsuit against his employer alleging multiple claims of discrimination and harassment. The employer successfully moved to compel arbitration pursuant to an agreement between the parties. During the arbitration, the arbitration provider issued an invoice for fees, which the employer attempted to pay electronically on the last day of the statutory 30-day deadline. However, due to a processing delay, the payment was not received by the provider until three days after the deadline.The Superior Court of Los Angeles County found that the employer’s failure to ensure the arbitration fees were received within the 30-day period constituted a material breach of the arbitration agreement under California Code of Civil Procedure section 1281.98. The court vacated its prior order compelling arbitration, returned the case to court, and awarded the plaintiff $1,750 in sanctions for expenses incurred in bringing the motion. The plaintiff then sought over $300,000 in attorney fees and costs under section 1281.98, subdivision (c)(1), which allows recovery of all fees and costs associated with an abandoned arbitration. The trial court granted only a reduced amount, reasoning that the plaintiff was entitled only to fees and costs for work rendered useless by the termination of arbitration.On appeal, the California Court of Appeal, Second Appellate District, Division One, considered the impact of the California Supreme Court’s decision in Hohenshelt v. Superior Court (2025) 18 Cal.5th 310. Hohenshelt held that federal law preempts a strict application of section 1281.98, and that forfeiture of arbitral rights occurs only if the failure to pay fees is willful, grossly negligent, or fraudulent. The appellate court determined that the employer’s late payment was not willful, grossly negligent, or fraudulent, and therefore, the plaintiff was not entitled to attorney fees under section 1281.98, subdivision (c)(1). The order awarding attorney fees and costs was reversed. View "Wilson v. Tap Worldwide, LLC" on Justia Law

Four individuals who worked as drivers for a ride-sharing company alleged that the company misclassified them as independent contractors rather than employees, resulting in violations of federal and Illinois wage laws. The drivers claimed they were denied minimum wage, overtime pay, and reimbursement for business expenses. Each driver had entered into agreements with the company that included arbitration provisions, but these agreements also allowed drivers to opt out of arbitration within a specified period. One driver, Ken Zurek, opted out of the arbitration provision in a later agreement after not opting out of an earlier one.Before joining the federal lawsuit, Zurek had filed a separate case in Illinois state court, where the company sought to compel arbitration based on the earlier agreement. The state court found that Zurek’s opt-out from the later agreement meant he was not bound to arbitrate claims arising during the period covered by that agreement, even if he had not opted out of the earlier one. The state court did not decide whether Zurek had actually agreed to the earlier arbitration provision, finding it unnecessary for the resolution of the case. The parties later settled the state court case.In the United States District Court for the Northern District of Illinois, the company again moved to compel arbitration for all four drivers. The district court granted the motion for three drivers but denied it for Zurek, holding that the state court’s decision precluded relitigation of whether Zurek was bound by the earlier arbitration agreement. The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s denial of the motion to compel arbitration as to Zurek, holding that issue preclusion applied because the state court had already decided the relevant issue. View "Agha v. Uber Technologies, Inc." on Justia Law

Brian Flores, a current NFL coach, brought a putative class action against the National Football League and several of its member clubs, including the Denver Broncos, New York Giants, and Houston Texans, alleging racial discrimination under federal, state, and local law. Flores’s claims stemmed from his interviews and employment experiences with these teams, during which he alleged discriminatory hiring practices. His employment contracts with various NFL teams incorporated the NFL Constitution, which contains a broad arbitration provision granting the NFL Commissioner authority to arbitrate disputes between coaches and member clubs.The United States District Court for the Southern District of New York reviewed the defendants’ motion to compel arbitration based on Flores’s employment agreements. The District Court granted the motion for claims against the Miami Dolphins, Arizona Cardinals, and Tennessee Titans, but denied it for Flores’s claims against the Broncos, Giants, Texans, and related claims against the NFL. The court found the NFL Constitution’s arbitration provision illusory and unenforceable under Massachusetts law, as it allowed unilateral modification by the NFL and lacked a signed agreement in one instance. The District Court also denied the defendants’ motion for reconsideration.On appeal, the United States Court of Appeals for the Second Circuit affirmed the District Court’s orders. The Second Circuit held that the NFL Constitution’s arbitration provision, which vested unilateral substantive and procedural authority in the NFL Commissioner, did not qualify for protection under the Federal Arbitration Act and was unenforceable because it failed to guarantee Flores the ability to vindicate his statutory claims in an impartial arbitral forum. The court also affirmed the denial of the motion for reconsideration, concluding there was no abuse of discretion. View "Flores v. N.Y. Football Giants" on Justia Law

An employee was hired by a company and, as a condition of employment, signed an agreement requiring all employment-related claims to be resolved through arbitration governed by the Federal Arbitration Act (FAA). The agreement specified that the employer would pay all arbitration costs except for certain fees. After the employee reported alleged workplace harassment and was subsequently terminated, he sued the employer in California Superior Court for retaliation and other violations. The employer moved to compel arbitration, which the court granted, and arbitration commenced. After about a year, the arbitrator issued invoices for fees, which the employer failed to pay within 30 days of receipt, as required by California Code of Civil Procedure section 1281.98. The employee then sought to withdraw from arbitration and proceed in court, arguing the employer’s late payment constituted a material breach under section 1281.98.The Superior Court denied the employee’s motion, reasoning that the arbitrator had set a new due date for payment and the employer paid within 30 days of that date. The California Court of Appeal reversed, holding that the statutory 30-day deadline applied from the original invoice date and that the employer’s late payment resulted in a material breach, allowing the employee to withdraw from arbitration. The Court of Appeal also held that section 1281.98 was not preempted by the FAA.The Supreme Court of California reviewed the case to determine whether section 1281.98 is preempted by the FAA. The court held that section 1281.98 is not preempted, but clarified that the statute does not abrogate longstanding contract principles allowing relief from forfeiture for non-willful, non-grossly negligent, or non-fraudulent breaches. The court reversed the Court of Appeal’s order lifting the stay and remanded for the trial court to determine whether the employer’s late payment was excusable and whether the employee suffered compensable harm. View "Hohenshelt v. Superior Court" on Justia Law

Robert Platt, an employee of Sodexo, Inc., sued his employer, claiming that a monthly tobacco surcharge on his employee health insurance premiums violated the Employee Retirement Income Security Act (ERISA). Platt brought claims on behalf of himself and other plan participants to recover losses under ERISA § 502(a)(1)(B) and § 502(a)(3), and a breach of fiduciary duty claim on behalf of the employer-sponsored health insurance plan (the Plan) for losses under ERISA § 502(a)(2). Sodexo sought to compel arbitration based on an arbitration provision it unilaterally added to the Plan after Platt joined.The United States District Court for the Central District of California denied Sodexo’s motion to compel arbitration, holding that there was no enforceable arbitration agreement because Sodexo unilaterally modified the Plan to add the arbitration provision without Platt’s consent. The court found that Platt did not agree to arbitrate his claims.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court agreed that an employer cannot create a valid arbitration agreement by unilaterally modifying an ERISA-governed plan to add an arbitration provision without obtaining consent from the relevant party. The court held that Platt is the relevant consenting party for claims under ERISA § 502(a)(1)(B) and § 502(a)(3) and that he did not consent to arbitration because he did not receive sufficient notice of the arbitration provision. However, the court held that the Plan is the relevant consenting party for the breach of fiduciary duty claim under ERISA § 502(a)(2) and that the Plan consented to arbitration.The Ninth Circuit affirmed the district court’s denial of Sodexo’s motion to compel arbitration for Platt’s claims under ERISA § 502(a)(1)(B) and § 502(a)(3). It reversed in part the district court’s denial of the motion to compel arbitration for the breach of fiduciary duty claim under ERISA § 502(a)(2) and remanded for the district court to consider Platt’s unconscionability defenses and the severability of the representative action waiver and any other arbitration clauses found unconscionable. View "PLATT V. SODEXO, S.A." on Justia Law

Brian Trematore Plumbing & Heating, Inc. (Trematore) entered into a collective bargaining agreement (CBA) with Sheet Metal Workers Local Union 25 (Local 25) for a project at High-Tech High School in Secaucus, New Jersey. The CBA, initially formed under § 8(f) of the National Labor Relations Act (NLRA), was later converted to a § 9(a) agreement when Local 25 demonstrated majority status. The CBA included an evergreen clause, automatically renewing unless terminated with notice, and a non-repudiation clause. Trematore ceased employing Local 25 members in September 2018 and later subcontracted work to non-union workers, leading to grievances and an unfair labor practice charge by Local 25.The United States District Court for the District of New Jersey denied Trematore's motion for judgment and granted Local 25's cross-motion, holding that the CBA remained in effect due to the evergreen provision and non-repudiation clause. The court found that Trematore could not repudiate the CBA under the one-employee unit rule and that the grievance regarding subcontracting was arbitrable.The United States Court of Appeals for the Third Circuit affirmed the District Court's judgment. The appellate court held that Trematore was bound by the CBA through its evergreen provision and non-repudiation clause, making its attempted repudiation ineffective. The court also held that the grievance concerning subcontracting was arbitrable, as it fell within the scope of the arbitration clause in the CBA. The court concluded that the CBA remained in effect and that Trematore was not entitled to injunctive relief. View "Brian Trematore Plumbing & Heating Co. v. Sheet Metal Workers Local Union 25" on Justia Law