Justia Arbitration & Mediation Opinion Summaries

Billy Ford worked as a full-time security guard for Parkwest Casino Lotus from September 2018 to December 2021. Upon hiring, Ford signed an arbitration agreement that excluded claims for workers' compensation, unemployment compensation, certain administrative complaints, ERISA claims, and "representative claims under [PAGA]." In February 2022, Ford filed a complaint against Parkwest under PAGA, alleging Labor Code violations, including mandatory off-the-clock health screenings and inaccurate wage statements. Parkwest moved to compel arbitration of Ford's individual PAGA claims and to dismiss the representative PAGA claims, citing Viking River Cruises, Inc. v. Moriana.The Superior Court of Sacramento County denied Parkwest's motion to compel arbitration, finding that the arbitration agreement specifically excluded all PAGA claims. Parkwest appealed, arguing that the agreement was ambiguous regarding the exclusion of individual PAGA claims and that such ambiguity should be resolved in favor of arbitration.The Court of Appeal of the State of California, Third Appellate District, reviewed the case. The court concluded that the arbitration agreement unambiguously excluded all PAGA claims, including individual claims. The court reasoned that the language of the agreement and the circumstances under which it was executed indicated that the parties intended to exclude all PAGA claims from arbitration. The court affirmed the trial court's order denying Parkwest's motion to compel arbitration. View "Ford v. The Silver F" on Justia Law

Michele Cornelius sued CVS Pharmacy Inc., New Jersey CVS Pharmacy, L.L.C., and her former supervisor, Shardul Patel, alleging a hostile work environment. Cornelius claimed that Patel targeted her with negative treatment because she is a woman, including denying her promotions, overworking her, and undermining her relationships with employees. Despite her multiple complaints to CVS, no action was taken against Patel. Cornelius resigned in October 2021, but Patel did not respond, and she was subsequently fired on November 4, 2021.The United States District Court for the District of New Jersey granted CVS's motion to compel arbitration and dismissed Cornelius's complaint. The court concluded that Cornelius's claims were not protected from arbitration under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) because her hostile work environment claim did not constitute a "sexual harassment dispute." The court also found that Cornelius and CVS had entered into a valid arbitration agreement and that the agreement was not unconscionable.The United States Court of Appeals for the Third Circuit reviewed the case. The court agreed with the District Court that the EFAA did not cover Cornelius's claims but reached this conclusion on different grounds, determining that her dispute arose before the EFAA's effective date of March 3, 2022. However, the Third Circuit found that the District Court abused its discretion by not considering whether discovery was necessary before deciding that Cornelius and CVS had a valid agreement to arbitrate. Consequently, the Third Circuit affirmed in part, vacated the judgment, and remanded the case to the District Court for further proceedings, including consideration of whether discovery on the validity of the arbitration agreement was warranted. View "Cornelius v. CVS Pharmacy Inc" on Justia Law

HollyFrontier Cheyenne Refining, LLC transitioned a petroleum refinery into a renewable diesel production facility in 2021. During this transition, HollyFrontier reassigned work from hourly workers to salaried employees with higher education and technical expertise. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union Local 11-574 filed a grievance, alleging that this reassignment violated their collective bargaining agreement (CBA). An arbitrator ruled in favor of HollyFrontier on the reassignment issue but also decided that salaried employees should be included in the bargaining unit, an issue not submitted for arbitration.The United States District Court for the District of Wyoming reviewed the case and granted HollyFrontier's petition to vacate the arbitrator's decision regarding the inclusion of salaried employees in the bargaining unit. The court reasoned that the arbitrator exceeded his authority by deciding an issue that was not submitted for arbitration.The United States Court of Appeals for the Tenth Circuit reviewed the district court's decision. The Tenth Circuit affirmed the district court's vacatur of the arbitration award. The court held that the arbitrator exceeded his authority by addressing an issue not submitted for arbitration. The parties had only submitted the issue of whether HollyFrontier's reassignment of work violated the CBA, and the arbitrator's decision to include salaried employees in the bargaining unit was beyond the scope of the submitted issue. The court emphasized that arbitration is limited to the issues the parties agree to submit, and the arbitrator must stay within those bounds. View "HollyFrontier Cheyenne Refining, LLC v. United Steel Paper" on Justia Law

Haylee Hinton was injured in a car accident caused by another motorist running a red light. She initially sought compensation from her employer’s workers’ compensation insurer and later settled with the motorist’s insurance carrier. Hinton then filed a claim for underinsured motorist benefits with Midwest Family Mutual Insurance, her underinsured motorist coverage provider, and submitted the claim to arbitration as permitted by Utah law.Midwest sought a declaratory judgment from the district court to limit the categories of damages Hinton could recover in arbitration, citing Utah Code section 31A-22-305.3(4)(c)(i), which excludes benefits paid or payable under the Workers’ Compensation Act from underinsured motorist coverage. The district court interpreted the statute to mean that past and future medical expenses and two-thirds of lost wages were payable under workers’ compensation and ruled that Hinton could not recover these categories of damages from Midwest.Hinton petitioned for interlocutory review, arguing that the district court lacked jurisdiction and misinterpreted the statute. The Utah Supreme Court found that the district court had jurisdiction but misinterpreted the statute. The court concluded that “payable” means benefits that can or may be paid to a specific claimant in a particular case, not just categories of damages generally available under workers’ compensation. The court vacated the district court’s order and remanded the matter for further proceedings to determine what benefits remain payable to Hinton under the Workers’ Compensation Act. View "Hinton v. Midwest Family Mutual Insurance" on Justia Law

A collective bargaining agreement between the Teamsters Union and Quality Custom Distribution guaranteed that the top 80% of senior employees would receive at least 40 paid hours per week. During the early months of the COVID-19 pandemic, many Starbucks stores in or near Chicago closed or reduced their hours, resulting in senior employees averaging only 30 hours a week. The Union demanded that the employer make up the difference, but the employer refused, citing an exception for Acts of God.The dispute was taken to an arbitrator, who ruled in favor of the Union. The arbitrator determined that while epidemics might be considered Acts of God, the reduction in work was primarily due to the Governor of Illinois' orders, which were not Acts of God. The employer then filed a suit in the United States District Court for the Northern District of Illinois to nullify the arbitrator's decision. The district court judge declined to nullify the decision.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The court held that as long as the arbitrator interprets the contract, the award must stand. The arbitrator had interpreted the contract's "Act of God" clause, concluding it did not cover the Governor's orders. The court emphasized that judicial review of arbitration awards is limited to ensuring the arbitrator interpreted the contract, not whether the interpretation was correct. The court also noted that the employer's conduct in the litigation process imposed unnecessary costs and ordered the employer to show cause why sanctions should not be imposed. View "Quality Custom Distribution Services LLC v International Brotherhood of Teamsters, Local 710" on Justia Law

Packers Sanitation Services Ltd., LLC (Packers) employed Jose A. Parra Rodriguez (Parra) in California from April 2019 to July 2021. In February 2022, Parra filed a complaint against Packers under the Labor Code Private Attorneys General Act of 2004 (PAGA), seeking civil penalties for alleged violations of the Labor Code and California Code of Regulations. Packers moved to compel arbitration based on an agreement Parra allegedly signed, which included a clause for binding individual arbitration. Parra opposed the motion, arguing he did not recall signing the agreement, his PAGA claims lacked an individual component, and the claims fell under exceptions to arbitration.The Superior Court of Imperial County held an evidentiary hearing and found Parra had signed the agreement. However, the court denied the motion to compel arbitration, interpreting "current law" to mean the law as it stood in 2019, when Iskanian v. CLS Transportation Los Angeles, LLC held PAGA claims were not subject to arbitration. The court concluded the parties had not agreed to arbitrate PAGA claims at all.The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case. Packers argued that under Viking River Cruises, Inc. v. Moriana, Parra’s individual PAGA claim should be compelled to arbitration, and non-individual claims should be dismissed. Parra contended his complaint did not include individual PAGA claims, citing Balderas v. Fresh Start Harvesting, Inc., which held a plaintiff could forgo individual relief and bring a representative PAGA action.The Court of Appeal affirmed the lower court's decision, agreeing with Parra that his complaint did not assert individual PAGA claims. The court found that Parra had not sought individual PAGA relief and thus, there were no individual claims to compel to arbitration. The court did not address whether a PAGA action must include an individual claim, as this issue was not ripe for consideration in this appeal. View "Rodriguez v. Packers Sanitation Services" on Justia Law

Gary Waetzig, a former employee of Halliburton Energy Services, Inc., filed a federal age-discrimination lawsuit against the company. He later submitted his claims for arbitration and voluntarily dismissed his federal lawsuit without prejudice under Federal Rule of Civil Procedure 41(a). After losing in arbitration, Waetzig sought to reopen his dismissed lawsuit and vacate the arbitration award, citing Federal Rule of Civil Procedure 60(b) as the basis for reopening the case.The U.S. District Court for the District of Colorado reopened the case, ruling that a voluntary dismissal without prejudice counts as a "final proceeding" under Rule 60(b) and that Waetzig made a mistake by dismissing his case rather than seeking a stay. The District Court also granted Waetzig's motion to vacate the arbitration award. Halliburton appealed, and the Tenth Circuit reversed the District Court's decision, holding that a voluntary dismissal without prejudice does not count as a "final judgment, order, or proceeding" under Rule 60(b).The Supreme Court of the United States reviewed the case and held that a case voluntarily dismissed without prejudice under Rule 41(a) counts as a "final proceeding" under Rule 60(b). The Court reasoned that a voluntary dismissal is "final" because it terminates the case and aligns with the definitions and historical context of the term "final." The Court also concluded that a voluntary dismissal qualifies as a "proceeding" under Rule 60(b), encompassing all steps in an action's progression. The judgment of the Tenth Circuit was reversed, and the case was remanded for further proceedings consistent with the Supreme Court's opinion. View "Waetzig v. Halliburton Energy Services, Inc." on Justia Law

Angelica Ramirez sued her former employer, Charter Communications, Inc., under the California Fair Employment and Housing Act (FEHA) for discrimination, harassment, retaliation, and wrongful discharge. Charter moved to compel arbitration based on an arbitration agreement signed by Ramirez during her onboarding process. The trial court found the agreement contained unconscionable provisions and refused to enforce it.The Superior Court of Los Angeles County found the arbitration agreement to be a contract of adhesion and identified several substantively unconscionable provisions, including shortened filing periods for claims, improper allocation of attorney fees, and lack of mutuality in claims subject to arbitration. The court denied Charter's motion to compel arbitration. Charter appealed, and a different panel of the Court of Appeal affirmed the trial court's decision, agreeing that the agreement contained multiple unconscionable provisions.The California Supreme Court reviewed the case and concurred that three provisions were substantively unconscionable but remanded the matter to the Court of Appeal to reconsider whether the unconscionable provisions could be severed from the agreement. On remand, the Court of Appeal concluded that severing the unconscionable provisions would not further the interests of justice. The court found that the agreement's central purpose was tainted with illegality and that the multiple unconscionable provisions indicated a systematic effort by Charter to impose arbitration in a manner that favored the employer. Therefore, the Court of Appeal affirmed the trial court's refusal to enforce the arbitration agreement. View "Ramirez v. Charter Communications, Inc." on Justia Law

In this wage-and-hour class action, the plaintiffs, employees of ACE American Insurance Company (ACE), alleged that ACE misclassified them as exempt employees and failed to provide benefits required for nonexempt employees under state law. The plaintiffs also added claims under the Private Attorneys General Act of 2004 (PAGA) for the same alleged violations. The plaintiffs had signed arbitration agreements as a condition of their employment, which required them to submit employment-related legal claims to arbitration.The Superior Court of Los Angeles County initially granted ACE's motion to compel arbitration and stayed the case pending arbitration. However, neither party initiated arbitration. The plaintiffs then moved to lift the stay, arguing that ACE was required to initiate arbitration and had waived its right to arbitrate by failing to do so. The trial court agreed with the plaintiffs, finding that ACE's inaction was inconsistent with its right to arbitrate and lifted the stay.The Court of Appeal of the State of California, Second Appellate District, reviewed the case. The court held that the plaintiffs, not ACE, were required to initiate arbitration under the terms of the arbitration agreements. The agreements specified that the party wanting to start the arbitration procedure should submit a demand, and in this context, it referred to the plaintiffs who had employment-related legal claims. The court concluded that ACE did not breach the arbitration agreements or waive its right to arbitration by failing to initiate the process. Consequently, the trial court's order lifting the stay was reversed, and ACE was awarded its costs on appeal. View "Arzate v. ACE American Insurance Company" on Justia Law

Xerox Corporation filed a petition under Section 301 of the Labor Management Relations Act (LMRA) for injunctive and declaratory relief against Local 14A, Rochester Regional Joint Board, Xerographic Division Workers United (the Union). After the collective bargaining agreement (CBA) between Xerox and the Union expired, Xerox terminated retiree benefits. The Union argued that Xerox could not unilaterally terminate vested benefits and sought to enforce the expired agreement’s arbitration provision. Xerox sought to stay and enjoin arbitration.The United States District Court for the Western District of New York granted Xerox’s petition, concluding that the Union’s grievance was not arbitrable under the expired CBA. The district court reasoned that the Union failed to identify language in the agreement that could be understood to have promised vested benefits beyond the agreement’s expiration. Additionally, the reservation-of-rights clause in plan documents barred an interpretation that benefits had vested.On appeal, the Union argued that the district court erred. The United States Court of Appeals for the Second Circuit agreed with the Union. The appellate court found that the Union identified language that could be reasonably understood as guaranteeing benefits beyond the contract’s expiration or as constituting deferred compensation. Furthermore, the reservation-of-rights clause in plan documents did not conclusively bar an interpretation that benefits had vested. To discern the parties’ intent, the appropriate trier of fact would need to consult extrinsic evidence.Accordingly, the Second Circuit vacated the district court’s judgment and remanded the case for further proceedings. View "Xerox Corporation v. Local 14A, Rochester Regional Joint Board, Xerographic Division Workers United" on Justia Law