Justia Arbitration & Mediation Opinion Summaries

In an appeal by allowance, the issue presented for the Pennsylvania Supreme Court’s review was whether, in the context of a grievance arbitration award, an arbitrator has subject matter jurisdiction to adjudicate a dispute between a union and a municipality arising out of a surviving spouse’s pension benefit, where the benefit was afforded to the surviving spouse statutorily and incorporated into the parties’ collective bargaining agreement (CBA). Pamela Cimino’s husband, Thomas J. Cimino, was a police officer for the City of Arnold, Pennsylvania (City) from July 1, 1990 until April 4, 2002. On April 4, 2002, Officer Cimino died off-duty of natural causes. At the time of his death, Officer Cimino had completed 11.77 years of service. The City issued Mrs. Cimino 142 consecutive monthly death benefit payments, from May 1, 2002 to February 1, 2014. However, in a 2014 compliance audit, the Commonwealth Auditor General’s Office determined that the City was incorrectly administering the death benefit. According to the Auditor General’s compliance audit, the City had been paying Mrs. Cimino twice as much as it should have under its interpretation of the applicable statute. The Wage Policy Committee of the City of Arnold Police Department (Union) initiated a grievance on behalf of Mrs. Cimino to dispute the 50% reduction in her death benefit pension payments. The Union followed the grievance procedure contained in the CBA between the City and the Union. The Pennsylvania Supreme Court concluded a dispute as here was arbitrable under the Policemen and Firemen Collective Bargaining Act (“Act 111”), 43 P.S. secs. 217.1-217.10, because the surviving spouse’s pension benefit was incorporated into the CBA. Accordingly, the Court reversed the order of the Commonwealth Court which held to the contrary. View "City of Arnold v. Wage Policy Committee" on Justia Law

San Francisco Baseball Associates (the Giants) unsuccessfully moved to compel arbitration of the wage and hour claims of Melendez, a security guard employed at AT&T Park. Melendez argued that he and other security guards were employed “intermittingly” for specific assignments and were discharged “at the end of a homestand, at the end of a baseball season, at the end of an inter-season event like a fan fest, college football game, a concert, a series of shows, or other events,” and, under Labor Code section 201, were entitled to but did not receive immediate payment of their final wages upon each “discharge.” The Giants argued that immediate payment was not required because, under the terms of the collective bargaining agreement (CBA) between the Giants and the union, Melendez and all such security guards are not intermittent employees but are “year-round employees who remain employed with the Giants until they resign or are terminated pursuant to the CBA.” The Giants argued that the action is preempted by section 301 of the federal Labor Management Relations Act, 29 U.S.C. 185(a). The court of appeal affirmed, finding that the dispute is not within the scope of the CBA's arbitration provision but that arbitration is required by section 301. View "Melendez v. San Francisco Baseball Associates" on Justia Law

The Fund, a multi-employer benefit plan established under Labor Management Relations Act, 29 U.S.C. 186(c)(5). The Act broadly prohibits employers from providing payments of money or other items of value to employee representatives, with an exception for employee benefit trust funds that comply with statutory requirements, including mandatory administration by a board of trustees composed of an equal number of employee and employer representatives. The Fund is overseen by five union-designated trustees and five employer-designated trustees. The Act requires such funds to install a mechanism allowing a federal district court to appoint a neutral party to resolve any impasse; the Fund’s Agreement specifies that “[i]n the event of a deadlock,” the Trustees “may agree upon an impartial umpire to break such deadlock.” If they cannot agree with a reasonable time, they may petition the District Court for the Western District of Pennsylvania to appoint an impartial umpire. The Trustees deadlocked on a motion seeking to approve payment of compensation to eligible Trustees for attendance at Fund meetings and another seeking to clarify and confirm the eligibility requirements for Employer Trustees. In each case, one-half of the board petitioned the court to appoint an arbitrator to settle the dispute, and the opposing half sought to prevent the requested appointment. The court declined to send either conflict to arbitration. The Third Circuit remanded, finding that both disputes were within the purview of the parties’ agreement to arbitrate. View "Employer Trustees of Western Pennsylvania Teamsters v. Union Trustees of Western Pennsylvania Teamsters" on Justia Law

Kho worked as a mechanic for One Toyota (OTO) from 2010-2014, when his employment was terminated. Kho filed a wage claim with the California Labor Commissioner. After settlement discussions failed, OTO filed a petition to compel arbitration. Under the arbitration agreement, which OTO required Kho to execute without explanation, the wage claim was subject to binding arbitration conducted by a retired superior court judge. Because the intended procedure incorporated many of the provisions of the Code of Civil Procedure and the Evidence Code, the anticipated arbitration proceeding would resemble ordinary civil litigation. The trial court denied the petition to compel. Under the state supreme court’s 2013 “Sonic-Calabasas” decision, an arbitration agreement that waives the various advantageous provisions of the Labor Code governing the litigation of a wage claim is substantively unconscionable if it fails to provide the employee with an affordable and accessible alternative forum. The trial court concluded that the alternative anticipated by OTO’s arbitration agreement failed this standard because it effectively required Kho to retain counsel and did not expressly provide for him to recover his attorney fees if he prevailed. The court of appeal reversed, concluding the arbitration proceeding satisfies the Sonic requirements of affordability and accessibility. View "OTO, L.L.C. v. Kho" on Justia Law

Moon performed at the Breathless Men’s Club in Rahway. She rented performance space in the Club and signed an Independent Dancer Rental Agreement, stating: Dancer understands and agrees that he/she is an independent contractor and not an employee of club. Dancer is renting the performance space for an agreed upon fee previously agreed to by Dancer and Club. … In a dispute between Dancer and Club under this Agreement, either may request to resolve the dispute by binding arbitration. THIS MEANS THAT NEITHER PARTY SHALL HAVE THE RIGHT TO LITIGATE SUCH CLAIM IN COURT OR TO HAVE A JURY TRIAL – DISCOVERY AND APPEAL RIGHTS ARE LIMITED IN ARBITRATION. ARBITRATION MUST BE ON AN INDIVIDUAL BASIS. THIS MEANS NEITHER YOU NOR WE MAY JOIN OR CONSOLIDATE CLAIMS IN ARBITRATION, OR LITIGATE IN COURT OR ARBITRATE ANY CLAIMS AS A REPRESENTATIVE OR MEMBER OF A CLASS. Moon sued under the Fair Labor Standards Act, 29 U.S.C. 201; the New Jersey Wage Payment Law; and the state Wage and Hour Law. The district court denied a motion to dismiss and ordered limited discovery on the arbitration issue. After discovery, the court granted the Club summary judgment. The Third Circuit reversed. Moon’s claims do not arise out of the contract itself; the arbitration clause does not cover Moon’s statutory wage-and-hour claims. View "Moon v. Breathless Inc" on Justia Law

For purposes of the Iskanian rule, the Private Attorneys General Act of 2004 (PAGA) representative claims for civil penalties are limited to those where a portion of the recovery is allocated to the Labor and Workforce Development Agency. Claims for unpaid wages based on Labor Code section 558 are not allocated in this manner and, therefore, the Iskanian rule does not exempt such claims from arbitration. Applying the interpretation of the Iskanian rule and its term of art, civil penalties, to this litigation, the court concluded that some of the claims the employee was pursuing were PAGA representative claims that seek civil penalties. Under the Iskanian rule, those claims were not subject to arbitration. Therefore, the Court of Appeal affirmed the trial court's order insofar as it denied arbitration of the representative claims for civil penalties and remanded for further proceedings. View "Esparza v. KS Industries, LP" on Justia Law

In this employment dispute, Employee filed an action in superior court alleging an unjust enrichment claim against Employee. Employee moved to compel arbitration under the parties’ employment contract’s arbitration provision and brought a claim for severance pay. The superior court granted the motion. Employer asserted various counterclaims. The arbitrator ruled in favor of Employer, finding that Employer properly rescinded the contract based on Employee’s underlying misrepresentations and omissions. The final arbitration award fully settled all claims and counterclaims submitted. The superior court confirmed the award but also granted Employer leave to amend its complaint to reassert its counterclaims. The superior court granted Employer’s motion to amend its complaint. The Supreme Court reversed, holding that Employer, having not specifically challenged the contract’s arbitration provision, may not amend its complaint and litigate its various claims against Employee in this action. View "Hamblen v. Honorable Ralph Hatch" on Justia Law

In 2013, Scheurer applied to work at Richelieu which outsourced its staffing needs to Remedy, a temporary staffing agency. The application form she signed with Remedy for placement with Richelieu contained an arbitration agreement. She was assigned to work for Richelieu, but that assignment ended after some months. About a year later, Remedy placed Scheurer with Fromm. Scheurer alleges that while working at Fromm, her supervisor sexually harassed her and that Fromm took no serious action to address the sexual harassment and instead fired her. Fromm tried to arrange a work situation that would have separated Scheurer from the supervisor, but when that proved “impossible,” Fromm asked Remedy to assign Scheurer to another client. Scheurer filed suit against Fromm, but not Remedy, alleging sexual harassment and retaliation, 42 U.S.C. 2000e‐2(a)(1) & 2000e‐3(a). Fromm argued that arbitration should be compelled under the contract law principle of equitable estoppel and because Fromm was a third‐party beneficiary of the Remedy agreement. The district court denied Fromm’s motion. The Seventh Circuit affirmed. There was no basis for finding that Fromm relied on Scheurer’s arbitration agreement since Fromm did not even know about it and Fromm was not a third‐party beneficiary of Remedy’s agreement with Scheurer. View "Scheurer v. Fromm Family Foods, LLC" on Justia Law

The Unions represents the pilots of merged airlines Flight Options and Flexjet. Flight Options and its pilots have had a collective bargaining agreement since 2010, while Flexjet’s pilots are newly unionized and are not yet party to a CBA. The parties dispute whether the integration of the pilot groups’ seniority lists (ISL) is solely a Union matter, so that the airlines must accept the Union's list or whether the airlines should have been allowed to participate in negotiating the list. The 2010 CBA governs the creation of the ISL when Flight Options acquires another carrier. The district court, acting under the Railway Labor Act (RLA), 45 U.S.C. 152, entered a preliminary injunction ordering the airlines to accept the Union’s ISL. On appeal, the airlines argued that the dispute was “minor” and subject to exclusive arbitral jurisdiction. The Sixth Circuit affirmed in part. The 2010 CBA does not arguably justify the airlines' assertion that they have a right to participate in the ISL process; the dispute is major. The district court properly enjoined the airlines to honor the express terms of the CBA, but those terms provide that if the airlines refuse to accept the Union’s proffered ISL, the Union may invoke an expedited grievance-arbitration process, which uniquely applies to such disputes. The court ordered modification of the injunction accordingly. View "Flight Options v. International Brotherhood of Teamsters" on Justia Law

It was not appropriate to vacate the arbitration award in this case concerning the termination of a police officer.The City of Boston terminated David Williams, a Boston police officer, for using a choke hold in arrested an unarmed suspect for disorderly conduct and making false statements in a departmental investigation. An arbitrator found no underlying misconduct on the part of the officer and ruled that the City of Boston lacked just cause to terminate the officer and ordered his reinstatement. The City filed a complaint seeking to vacate the arbitrator’s award. The superior court dismissed the complaint. The Supreme Judicial Court affirmed, holding that it was not appropriate to vacate the arbitration award where the award neither exceeded the arbitrator’s authority nor violated public policy and where no underlying misconduct was found. View "City of Boston v. Boston Police Patrolmen's Association" on Justia Law