Justia Arbitration & Mediation Opinion Summaries

Peter Quach filed a lawsuit against California Commerce Club (Commerce Club) after being terminated from his job at the casino where he had worked for nearly 30 years. Quach's complaint included claims of wrongful termination, age discrimination, retaliation, and harassment, and he demanded a jury trial. Commerce Club had previously provided Quach with a signed arbitration agreement from 2015, which mandated binding arbitration for employment-related disputes. Instead of moving to compel arbitration, Commerce Club answered the complaint and engaged in extensive discovery, including propounding interrogatories and taking Quach’s deposition.The Los Angeles County Superior Court denied Commerce Club’s motion to compel arbitration, finding that Commerce Club had waived its right to arbitrate by engaging in litigation for 13 months. The court noted that Commerce Club had actively participated in discovery and requested a jury trial, actions inconsistent with an intent to arbitrate. Commerce Club appealed, and the Second Appellate District, Division One, reversed the trial court’s decision, holding that Quach had not shown sufficient prejudice from Commerce Club’s delay in seeking arbitration.The Supreme Court of California reviewed the case and abrogated the state’s arbitration-specific prejudice requirement, aligning with the U.S. Supreme Court’s decision in Morgan v. Sundance, Inc. The court held that under California law, as under federal law, courts should apply the same principles to determine waiver of the right to compel arbitration as they do for other contracts. The court concluded that Commerce Club had waived its right to compel arbitration by engaging in litigation conduct inconsistent with an intent to arbitrate. The judgment of the Court of Appeal was reversed, and the case was remanded for further proceedings consistent with this decision. View "Quach v. Cal. Commerce Club, Inc." on Justia Law

Danny Lopez, an airline fuel technician, filed a wage-and-hour lawsuit under California law against his employer, Menzies Aviation (USA), Inc. Lopez alleged that Menzies violated state requirements for meal periods, rest periods, overtime wages, minimum wages, and other employment conditions. Menzies sought to compel arbitration based on an arbitration agreement Lopez signed as part of his employment.The United States District Court for the Central District of California denied Menzies' motion to compel arbitration. The court found that Lopez, as a transportation worker engaged in foreign or interstate commerce, was exempt from the Federal Arbitration Act (FAA) under 9 U.S.C. § 1. The court reasoned that Lopez’s role in fueling airplanes used in interstate and foreign commerce was integral to the transportation process, thus qualifying him for the exemption.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s decision. The Ninth Circuit held that a fuel technician who places fuel in planes used for foreign and interstate commerce is a transportation worker engaged in commerce. The court emphasized that such a worker plays a direct and necessary role in the free flow of goods across borders. The court clarified that there is no requirement for the worker to have hands-on contact with goods or be directly involved in their transportation to fall within the FAA exemption. Consequently, the Ninth Circuit concluded that Lopez was exempt from the arbitration requirements of the FAA and affirmed the district court’s denial of Menzies' motion to compel arbitration. View "LOPEZ V. AIRCRAFT SERVICE INTERNATIONAL, INC." on Justia Law

A labor dispute arose between the City of Cleveland and the Ohio Patrolmen’s Benevolent Association (the union representing dispatch supervisors) over overtime scheduling. The dispute was submitted to arbitration, where the arbitrator denied the union's grievance. The union then sought to vacate the arbitration award by filing an application in the Cuyahoga County Common Pleas Court, serving the city but not the attorneys who represented the city in the arbitration.The Common Pleas Court initially denied the city's motion to dismiss the union's application, but later reversed its decision after the Eighth District Court of Appeals ruled in a different case that failure to serve the adverse party's counsel deprived the court of jurisdiction. Consequently, the Common Pleas Court dismissed the union's application and confirmed the arbitration award in favor of the city. The Eighth District affirmed this decision, citing two defects: the union's application was in the form of a pleading rather than a motion, and it failed to serve the city's arbitration counsel.The Supreme Court of Ohio reviewed the case and held that under R.C. 2711.13, a party seeking to vacate an arbitration award must serve either the adverse party or its counsel, not necessarily both. However, the court also held that the union's application did not meet the statutory requirements because it was filed as a pleading (a complaint) rather than a motion. The court emphasized that a motion must state with particularity the grounds for the requested order, which the union's filing failed to do. Thus, the Supreme Court of Ohio reversed the Eighth District's decision regarding the service requirement but affirmed the decision that the union's application did not meet the statutory form requirements, leaving the arbitration award in favor of the city intact. View "Ohio Patrolmen's Benevolent Assn. v. Cleveland" on Justia Law

A former employee sued her employer, Charter Communications, Inc., alleging discrimination, harassment, and retaliation under the Fair Employment and Housing Act (FEHA), as well as wrongful discharge. Charter moved to compel arbitration based on an agreement the employee had signed during the onboarding process. The employee opposed, arguing the arbitration agreement was procedurally and substantively unconscionable.The Los Angeles County Superior Court found the agreement to be a contract of adhesion and substantively unconscionable due to provisions that shortened the time for filing claims, allowed Charter to recover attorney fees contrary to FEHA, and imposed an interim fee award for compelling arbitration. The court refused to enforce the agreement, finding it permeated with unconscionability. The Second Appellate District, Division Four, affirmed, identifying additional unconscionable provisions and disagreeing with another appellate decision regarding interim fee awards.The Supreme Court of California reviewed the case and agreed that certain provisions of the arbitration agreement were substantively unconscionable, including the lack of mutuality in covered and excluded claims, the shortened limitations period for filing claims, and the potential for an unlawful award of attorney fees. The court clarified that the discovery limitations were not unconscionable, as the arbitrator had the authority to order additional discovery if necessary.The Supreme Court held that the agreement's unconscionable provisions could potentially be severed, and the matter was remanded for further consideration of whether the unconscionable provisions could be severed to enforce the remainder of the agreement. The court also concluded that the Court of Appeal’s decision did not violate the Federal Arbitration Act. View "Ramirez v. Charter Communications, Inc." on Justia Law

Allied Painting & Decorating, Inc. withdrew from the International Painters and Allied Trades Industry Pension Fund in 2005. Twelve years later, the Fund demanded $427,195 from Allied, claiming it was owed for the withdrawal. The key issue was whether the Fund's delay in sending the demand violated the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), which requires that such demands be made "as soon as practicable" after withdrawal.The United States District Court for the District of New Jersey reviewed the case after Allied contested the demand, arguing that the delay caused significant prejudice. The Arbitrator initially found that the Fund did not act "as soon as practicable" but concluded that Allied failed to prove severe prejudice, thus rejecting Allied's laches defense. The District Court, however, found that Allied was prejudiced by the delay and vacated the Arbitrator's Award.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's order vacating the Arbitrator's Award. The Third Circuit held that the Fund's failure to send the demand "as soon as practicable" after Allied's withdrawal violated the MPPAA. The court clarified that the "as soon as practicable" requirement is a statutory mandate independent of any laches defense, meaning that the Fund's delay alone was sufficient to invalidate the demand, regardless of whether Allied could prove prejudice. Consequently, the Fund could not recover the claimed withdrawal liability from Allied. View "Allied Painting & Decorating Inc v. International Painters and Allied Trades Industry Pension" on Justia Law

StoneMor, Inc. operates cemeteries and funeral homes, with maintenance workers at two cemeteries unionized under the International Brotherhood of Teamsters, Local 469. The Union and StoneMor negotiated a collective bargaining agreement (the "Agreement"), which was ratified on October 5, 2020. The Agreement included a grievance procedure requiring the Union to file grievances within ten days of a dispute. After ratification, StoneMor sent drafts of the Agreement with a clarified wage provision, which the Union contested. The Union did not file a grievance until January 5, 2021, after the Agreement was executed on December 29, 2020.The United States District Court for the District of New Jersey reviewed the case and vacated the arbitrator's award. The District Court held that the Agreement was enforceable upon ratification on October 5, 2020, and that the grievance provision was triggered by October 30, 2020, when paychecks were issued without the salary increase. The court found that the arbitrator's decision, which allowed the Union to wait until January to file a grievance, was contrary to the Agreement's plain meaning.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's judgment. The Third Circuit held that the arbitrator exceeded her powers by disregarding the Agreement's clear terms, which made the Agreement binding upon ratification. The court emphasized that the grievance procedure was mandatory from the ratification date, and the arbitrator's decision to allow a delay in filing the grievance was not supported by the Agreement. The court concluded that the arbitration award reflected a manifest disregard of the Agreement and was correctly vacated. View "Stonemor Inc v. International Brotherhood of Teamsters Local 469" 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

Dominique Keeton, an employee of Tesla, Inc., filed a lawsuit against her employer alleging discrimination, harassment, and retaliation. The parties agreed to resolve the dispute through arbitration as per their employment agreement. However, when Tesla failed to pay its arbitration fees within the stipulated 30-day window, Keeton moved to vacate the order submitting the dispute to arbitration. The trial court granted Keeton's motion, ruling that Tesla had materially breached the arbitration agreement, thereby allowing Keeton to proceed with her claims in court.Tesla appealed the decision, arguing that the trial court erred in granting Keeton's motion to vacate. Tesla's arguments were threefold: the arbitration agreement delegated issues of arbitrability to the arbitrator; the Federal Arbitration Act (FAA) preempts the relevant section of the California Code of Civil Procedure; and the same section of the California Code of Civil Procedure constitutes an unconstitutional impairment of the arbitration agreement.The Court of Appeal of the State of California, First Appellate District, disagreed with Tesla's arguments and affirmed the trial court's decision. The court found that the arbitration agreement did not clearly delegate issues of arbitrability to the arbitrator. It also held that the FAA did not preempt the relevant section of the California Code of Civil Procedure, and that this section did not unconstitutionally impair the arbitration agreement. The court concluded that Tesla had materially breached the arbitration agreement by failing to pay its arbitration fees within the stipulated time, and thus Keeton was entitled to proceed with her claims in court. View "Keeton v. Tesla" on Justia Law

Spencer Mathis and Jaden Fenstermaker, who worked as delivery drivers for Amazon in Tulsa, Oklahoma, were fired by their employer, James Kerr, after Mathis filed a workers' compensation claim. The plaintiffs alleged that Kerr had retaliated against them for pursuing the claim and filed a lawsuit against him. Kerr moved to compel arbitration based on the arbitration provisions in the plaintiffs' employment contracts. The plaintiffs objected, arguing that federal and state law exempted them from arbitration.The trial court granted Kerr's motion to compel arbitration and stayed the lawsuit until the completion of arbitration. The plaintiffs appealed this decision, but the Court of Civil Appeals affirmed the trial court's ruling.The Supreme Court of the State of Oklahoma granted certiorari to review the case. The court held that employees who deliver Amazon packages are exempt from arbitration under federal law. The court also found that the district court's exclusive jurisdiction over retaliatory discharge claims precluded arbitration of those claims under Oklahoma law. The court reversed the trial court's decision, vacated the Court of Civil Appeals' opinion, and remanded the case for further proceedings. View "MATHIS v. KERR" on Justia Law

The case revolves around an employment dispute between Nelida Soltero and Precise Distribution, Inc. Soltero, who was placed at Precise Distribution by a temporary staffing agency, Real Time Staffing Services, filed a class action complaint against Precise Distribution for alleged failure to provide required meal periods and rest breaks to employees, among other claims. Precise Distribution sought to compel arbitration based on an arbitration agreement between Soltero and Real Time. However, Real Time was not a party to the lawsuit.The Superior Court of San Bernardino County denied Precise Distribution's motion to compel arbitration. Precise Distribution argued that it should be able to compel arbitration under the agreement between Soltero and Real Time, despite not being a party to it, based on theories of equitable estoppel, third-party beneficiary, or agency.The Court of Appeal, Fourth Appellate District Division One State of California, affirmed the lower court's decision. The court concluded that Precise Distribution was not a party to the arbitration agreement between Soltero and Real Time and could not compel arbitration based on the theories it proposed. The court found that Soltero's claims against Precise Distribution were not dependent upon or founded in the underlying contractual obligations of the agreement containing the arbitration clause. Furthermore, Precise Distribution was not an intended third-party beneficiary of the arbitration agreement, and there was no evidence of an agency relationship between Precise Distribution and Real Time. Therefore, the court affirmed the order denying Precise Distribution's motion to compel arbitration. View "Soltero v. Precise Distribution" on Justia Law