Justia Arbitration & Mediation Opinion Summaries

Dismissal for failure to exhaust collective bargaining agreement (CBA) grievance process was improper where it was unclear that CBA required resort to that process for claims under Fair Labor Standards Act (FLSA).Vega worked for Forest as a seasonal employee, subject to a CBA that included a mandatory four-step procedure culminating in arbitration to resolve employee grievances. Forest terminated Vega. At the time, Vega was owed compensation for 54 hours of work in the preceding two weeks. Forest did not tender a final paycheck, purportedly because it discovered that Vega lacked a valid Social Security number and it did not know how to lawfully make payment to him without such a number. The parties dispute whether Vega made efforts to initiate a grievance. The district court dismissed Vega’s suit under the FLSA, 29 U.S.C. 206(b), for failure to exhaust the grievance procedure. The Seventh Circuit reversed, stating that the collective bargaining agreement did not clearly and unmistakably waive Vega’s right to pursue his FLSA claim in a judicial forum. The district court did not consider whether the CBA required Vega to resort to the grievance process when he is pursuing rights granted to him by the FLSA rather than the contract itself. View "Vega v. New Forest Home Cemetery, LLC" on Justia Law

The First Circuit answered two questions of first impression regarding the Federal Arbitration Act (FAA) by holding (1) in a case where a federal district court is confronted with a motion to compel arbitration under the FAA and the parties have delegated questions of arbitrability to the arbitrator, the applicability of the FAA is a threshold question for the court to determine before compelling arbitration under the FAA; and (2) a provision of the FAA that exempts contracts of employment of transportation workers from the FAA’s coverage applies to a transportation-worker agreement that purports to establish an independent-contractor relationship. Accordingly, the First Circuit affirmed the district court’s order denying the motion to compel arbitration and dismissed this appeal for lack of appellate jurisdiction. View "Oliveira v. New Prime, Inc." on Justia Law

General Mills terminated employees and offered them benefits in exchange for releasing all Age Discrimination in Employment Act (ADEA), 29 U.S.C. 626(f)(1), claims and arbitrating release-related disputes. Plaintiffs, 33 employees who signed releases, subsequently filed suit seeking a declaratory judgment that the releases were not "knowing and voluntary." Plaintiffs also raised collective and individual ADEA claims. The district court denied General Mills' motion to compel arbitration. The court rejected plaintiffs' claim that the agreement to arbitrate applies only to claims "relating to" the release of claims, and their substantive ADEA claims are not related to the release of claims. Rather, the court found that the agreements' "relating to" sentence showed the parties' intent to arbitrate both disputes about the release and substantive ADEA claims. Therefore, the ADEA claims were covered by the agreements. The court explained that, absent a contrary congressional command, General Mills can compel employees who signed the agreements to arbitrate their ADEA claims. In this case, the court concluded that no "contrary congressional command" overrides the Federal Arbitration Act's (FAA), 9 U.S.C. 1 et seq., mandate to enforce the parties' agreement to arbitrate substantive ADEA claims. Accordingly, the court reversed and remanded for further proceedings. View "McLeod v. General Mills, Inc." on Justia Law

The right of firefighters and police officers to collectively bargain for purposes of wages, hours, and working conditions was secured through the Police and Firemen Collective Bargaining Act, commonly known as Act 111. Appellant, the International Association of Fire Fighters, Local 302 (“IAFF”), was the exclusive bargaining representative for the firefighters of Appellee, the City of Allentown (the “City”), for purposes of collective bargaining with the City. The City and the IAFF were parties to a seven-year collective bargaining agreement which ran from January 1, 2005 through December 31, 2011. In this appeal by allowance, the issue this case presented for the Supreme Court's review was, in the context of an interest arbitration award, whether a provision requiring a certain minimum number of firefighters on duty per shift is a mandatory subject of bargaining or a non-bargainable managerial prerogative. The Court concluded that the number of required firefighters per shift was a mandatory subject of bargaining, and implicated managerial responsibilities, but did not unduly infringe upon those managerial rights, and, thus, could properly serve as a component of an interest arbitration award. The Court reversed the Commonwealth Court, which held to the contrary. View "City of Allentown v. Int'l Assoc. of Firefighters" on Justia Law

Farrar was hired by Direct Commerce as its vice-president of business development and negotiated an employment agreement set forth in a six-page offer letter detailing her compensation, additional bonus structure, and stock options. The agreement also included an arbitration provision, set off by the same kind of underlined heading and spacing as the other enumerated paragraphs of the agreement. When Farrar sued Direct, alleging breach of contract, conversion, wrongful termination, breach of the covenant of good faith and fair dealing, and failure to pay wages owed and waiting time penalties, the employer unsuccessfully sought to compel arbitration. The trial court found the arbitration provision procedurally and substantively unconscionable. The court of appeals reversed. While the arbitration provision is one-sided, as it excludes any claims arising from the confidentiality agreement Farrar also signed, that offending exception is readily severable and, on this record, should have been severed. View "Farrar v. Direct Commerce, Inc." on Justia Law

Plaintiff-respondent Roberto Betancourt sued his employer, defendant-appellant Prudential Overall Supply (Prudential). In Betancourt's complaint, he alleged Betancourt and other Prudential employees worked over eight hours per day or more than 40 hours per week, and that Prudential failed to compensate Betancourt and other employees for all the hours they worked, as well as for missed breaks and meal periods. Prudential moved to compel arbitration but the trial court denied Prudential’s motion. Prudential argued on appeal the trial court erred. Finding no error, the Court of Appeal affirmed the judgment. View "Betancourt v. Prudential Overall Supply" on Justia Law

A police union and the City of Norwalk were parties to a collective bargaining agreement (CBA) governing the terms and conditions of employment for certain city police officers. The CBA provided that disputes over its interpretation will be resolved through arbitration. The Board of Police Commissioners determined that Stephen Couture, a police sergeant employed by the Norwalk Police Department, had violated departmental rules and that his employment should be terminated. Couture ultimately initiated an arbitration proceeding with the State Board of Mediation and Arbitration, and a majority of the arbitration board found that Couture had been terminated for just cause. The trial court vacated the arbitration award on the ground that the City had disciplined Couture twice for the same misconduct in manifest disregard of the law. The Supreme Court reversed, holding that the arbitration board’s decision was not in manifest disregard of the law, and therefore, the trial court improperly vacated the award of the arbitration board. View "Norwalk Police Union, Local 1727 v. City of Norwalk" on Justia Law

This appeal concerned a dispute between employees represented by a Union and their successor employer. The parties agreed to arbitrate this dispute regarding change in the terms of pension provision in a collective bargaining agreement. The district court refused to compel arbitration on the grounds that ERISA preempted the Union’s claims, and this, in turn, presented an issue of arbitrability properly decided by a judge, not an arbitrator. The First Circuit vacated the order of the district court and remanded with instructions to grant the Union’s motion to compel arbitration, holding that the issue of ERISA preemption in this case was not an issue of arbitrability but, rather, one that was squarely for the arbitrator to decide. View "Prime Healthcare Services - Landmark LLC v. United Nurses & Allied Professionals, Local 5067" on Justia Law

Plaintiff filed a putative class action against Wet Seal, alleging that the company violated the Labor and Business and Professions Codes, Industrial Welfare Commission Wage Order No. 7, and Title 8 of the California Code of Regulations. Plaintiff's claim also included a representative claim under the Private Attorneys General Act (PAGA), Lab. Code, § 2699. On appeal, Wet Seal challenges the denial of its motion to compel arbitration, and the grant of plaintiff's motion to compel discovery responses. The court concluded that Wet Seal's motion to compel arbitration was properly denied where the trial court declared the entire arbitration agreement was void and unenforceable based on its determination that the PAGA waiver was invalid, and applied the arbitration agreement's nonseverability provision. Wet Seal also asserts that the trial court should not have reached the merits of the discovery motion while its motion to compel arbitration was undetermined. The court concluded that there is no requirement for a trial court to issue a tentative ruling, or to announce its final ruling before taking a matter under submission. Because there is no basis to treat the appeal from the nonappealable order as a petition for writ of mandate, the court dismissed this portion of the appeal. The court affirmed in all other respects. View "Montano v. Wet Seal Retail, Inc." on Justia Law

Defendant-appellant Ross Stores, Inc. (Ross) appealed the denial of its motion to compel arbitration. Plaintiff-respondent Martina Hernandez was employed at a Ross warehouse in Moreno Valley, and filed a single-count representative action under the California Private Attorney General Act (PAGA), alleging Ross had violated numerous Labor Code laws, and sought to recover PAGA civil penalties for the violations. Ross insisted that Hernandez had to first arbitrate her individual disputes showing she was an "aggrieved party" under PAGA and then the PAGA action could proceed in court. The trial court found, that the PAGA claim was a representative action brought on behalf of the state and did not include individual claims. As such, it denied the motion to compel arbitration because there were no individual claims or disputes between Ross and Hernandez that could be separately arbitrated. On appeal, Ross raised the issue of whether under the Federal Arbitration Act (FAA), an employer and employee had the preemptive right to agree to individually arbitrate discreet disputes underlying a PAGA claim while leaving the PAGA claim and PAGA remedies to be collectively litigated under "Iskanian v. CLS Transportation Los Angeles LLC," (59 Cal.4th 348 (2014)). The Court of Appeal upheld the trial court's denial of the motion to compel arbitration. View "Hernandez v. Ross Stores" on Justia Law