Justia Arbitration & Mediation Opinion Summaries

The Michigan office of Alix, an international company, administers payroll and benefits for U.S. employees and is directly involved in U.S. hiring. In 2013, Alix hired Brewington, a Texas resident, for its Dallas Corporate Services team. The employment agreement provides that it “will be construed and interpreted in accordance with the laws of the State of Michigan” and states, “any dispute arising out of or in connection with any aspect of this Agreement and/or any termination of employment . . ., shall be exclusively subject to binding arbitration under the . . . American Arbitration Association . . . decision of the arbitrator shall be final and binding as to both parties.” In 2014, Brewington was terminated. He filed a demand for arbitration, asserting claims under Title VII, 42 U.S.C. 2000e, on behalf of himself and a purported nationwide class of current, former, and potential Alix employees. The Michigan district court ruled that Brewington was precluded from pursuing arbitration claims on behalf of any purported class. The Sixth Circuit affirmed that court’s refusal to dismiss, finding that Brewington had sufficient contacts with Michigan to establish personal jurisdiction, and upheld summary judgment in favor of Alix. An agreement must expressly include the possibility of classwide arbitration to indicate that the parties agreed to it. This clause is silent on the issue and is limited to claims concerning “this Agreement,” as opposed to other agreements. It refers to “both parties.” View "AlixPartners, LLP v. Brewington" on Justia Law

The Union filed suit to compel arbitration under its collective bargaining agreement (CBA) with Shaw. The district court granted the Union’s motion to compel arbitration and ordered the parties to select an arbitrator, which they did. After holding a hearing, the arbitrator issued a written decision siding with the Union. Shaw moved the district court to vacate the award, contending, among other things, that the arbitrator had exceeded her power by improperly modifying the CBA instead of interpreting it. The district court then vacated the award and the Union appealed. In light of United Steelworkers of Am. v. Enter. Wheel & Car Corp., the court concluded that it must resolve the ambiguity in the stated reasons for the award in favor of enforcement. Therefore, the court concluded that the arbitrator interpreted instead of modified the agreement. The court reversed and remanded. View "Wiregrass Metal Trades Council v. Shaw Envtl." on Justia Law

Samaan, a General Dynamics engineer since 1977, believed that the company was using the wrong shock-and-vibration testing methods on Stryker armored vehicles developed for use by the Army in Afghanistan and Iraq, which led, in turn, to submission of purportedly erroneous reports detailing the shock-and-vibration specifications for the vehicles. Samaan alleged that from 2004-2010 he repeatedly raised his concerns and eventually “filed a formal claim of data misrepresentation, fraud, and retaliation” with the Human Resources Department in 2010. General Dynamics allegedly gave Samaan his first poor performance evaluation in 2011, with a statement that his evaluation “would improve if he would ‘forget’ about the testing misrepresentation and fraud.” Samaan eventually took his concerns to the Army. He was suspended without pay, then filed suit, alleging retaliation, and resigned. An arbitrator, required by Samaan’s employment agreement, issued an award in favor of the Company, which the district court declined to vacate. The Sixth Circuit affirmed, rejecting challenges to the procedures employed during arbitration and stating that the Federal Arbitration Act does not allow for vacatur based on the fulfillment of moral and ethical obligations. View "Samaan v. Gen. Dynamics Land Sys., Inc." on Justia Law

Plaintiff filed suit against defendant, alleging causes of action for sexual harassment, sex discrimination, wrongful termination, and intentional infliction of emotional distress. At issue is whether an arbitration in her employee handbook is legally enforceable. In this case, the employee handbook containing the arbitration provision included a welcome letter as the first page, which stated, “[T]his handbook is not intended to be a contract (express or implied), nor is it intended to otherwise create any legally enforceable obligations on the part of the Company or its employees.” Plaintiff signed a form acknowledging she had received the handbook, which mentioned the arbitration provision as one of the “policies, practices, and procedures” of the company. The acknowledgement form did not state that plaintiff agreed to the arbitration provision, and expressly recognized that she had not read the handbook at the time she signed the form. The court found, under these circumstances, that the arbitration provision in the employee handbook did not create an enforceable agreement to arbitrate. Therefore, the court affirmed the trial court's denial of the employer's petition to compel arbitration. View "Esparza v. Sand & Sea, Inc." on Justia Law

Plaintiff alleged that, after her employment terminated, defendants failed to pay all of her final wages. She filed a putative class action under Labor Code sections 201-203, also asserting a representative Private Attorneys General Act (PAGA) claim seeking civil penalties on behalf of plaintiff and other aggrieved employees. Defendants submitted an arbitration agreement signed by plaintiff, stating any disputes would be submitted to arbitration and that “[a]ny such claims must be submitted on an individual basis only and I hereby waive the right to bring or join any type of collective or class claim in arbitration, in any court, or in any other forum.” Defendants conceded that the agreement cannot waive the representative PAGA claim. The trial court compelled arbitration of plaintiff’s individual claim, dismissed the class claims, bifurcated the representative PAGA claim, and stayed the PAGA claim pending the completion of arbitration. The court of appeal concluded the order is nonappealable; the order does not appear to constitute a de facto final judgment for absent plaintiffs. The putative class members/aggrieved employees under PAGA because their PAGA claims remain pending. View "Young v. REMX" on Justia Law

After Cooks terminated him, plaintiff filed suit against the company, alleging claims under the Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. 4301, 4302(b), and Alabama state law. The district court entered an order striking from the arbitration agreement two terms that violated USERRA, dismissing the suit without prejudice, and ordering plaintiff to submit his claims to arbitration. On appeal, plaintiff contends that the district court erred by failing to apply the plain language of USERRA’s non-waiver provision. The court concluded that the contract's arguable delegation clause - which would require that the arbitrator, rather than the court, determine whether the arbitration agreement is enforceable - does not control this appeal. The court also concluded that, in reaching whether the arbitration agreement is enforceable, section 4302(b) is not in conflict with the Federal Arbitration Act (FAA), 9 U.S.C. 1, 2, and the district court properly determined the arbitration agreement is enforceable. Accordingly, the court affirmed the district court's decision to compel arbitration. View "Bodine v. Cook's Pest Control" on Justia Law

Plaintiff filed suit against his employer, Supreme, under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq. After the action was filed but, according to Supreme, before it had learned of the suit, the company announced a new policy requiring employees to arbitrate employment disputes, including FLSA claims. The district court denied Supreme’s motion to dismiss or compel arbitration. The court reversed, concluding that the arbitration agreement is binding and contains a delegation clause transferring the power to decide threshold questions of arbitrability to the arbitrator. The court remanded and directed the district court to enter an order compelling arbitration. View "Kubala, Jr. v. Supreme Production Serv." on Justia Law

Kentucky Shakespeare Festival, Inc. (KSF) and Brantley Dunaway entered into an employment agreement. Two years later, KSF terminated Dunaway’s employment. When KSF informed Dunaway that he was not entitled to a bonus for the 2013 fiscal year, Dunaway filed an action for breach of contract. Nearly one year later, KSF filed a motion for partial summary judgment and declaratory relief, arguing that KSF’s determination that Dunaway was not entitled to a bonus was a binding “arbitration award” issued by an independent accounting firm. The circuit court denied relief, concluding that the employment agreement did not contain an agreement to forgo litigation and arbitrate any bonus dispute. The court of appeals affirmed. The Supreme Court affirmed, holding that no arbitration agreement existed between KSF and Dunaway, and because no arbitration proceeding occurred, there was no arbitration award to be confirmed. View "Kentucky Shakespeare Festival, Inc. v. Dunaway" on Justia Law

In 1993, plaintiff Dean Altobelli began working as an attorney for Miller, Canfield, Paddock and Stone, P.L.C. (“the Firm”). Upon joining the Firm, plaintiff signed the “Miller Canfield Operating Agreement” (“Operating Agreement”), a document governing the Firm’s internal affairs. By January 2006, plaintiff had become a senior principal at the Firm. However, in late May or early June 2010, plaintiff decided he wanted to pursue a new opportunity as an assistant coach for the University of Alabama football team. Plaintiff proposed a 7- to 12-month leave of absence from the Firm to defendant Michael Hartmann, the Firm’s CEO, and defendant Michael Coakley, who was the head of the Firm’s litigation group but was not a managing director. Plaintiff suggested that the Firm permit him to maintain his ownership interest and return to the Firm as a senior principal any time before June 1, 2011. Plaintiff avers that Hartmann initially promised plaintiff that he could spend as much time at the University of Alabama as he wanted and still receive certain allocated income from his clients. Hartmann disputed this, claiming that plaintiff voluntarily withdrew from the partnership. Plaintiff claimed he was improperly terminated, and that the Firm shorted plaintiff's income as a result. Plaintiff's attempt to resolve the matter through the direct settlement and mediation process, as outlined in the arbitration clause of the Operating Agreement, was unsuccessful. In November 2011, plaintiff filed a demand for arbitration as provided for in the arbitration clause. Despite having made the demand for arbitration, he filed suit alleging that the seven individuals named as defendants were responsible for engaging in tortious conduct with regard to plaintiff's request for a leave of absence and retention of his equity ownership in the Firm. Defendants moved for summary judgment and a motion to compel arbitration as required by the arbitration clause. Plaintiff moved for summary judgment too. The circuit court denied defendants’ motions and granted plaintiff's motion for partial summary judgment, finding as a matter of law that plaintiff did not voluntarily withdraw from the Firm. Rather, the circuit court concluded that defendants had improperly terminated plaintiff's ownership interest without authority. The Court of Appeals affirmed. The Supreme Court reversed the part of the Court of Appeals’ opinion regarding the motion to compel arbitration and instead held that this case was subject to binding arbitration under the arbitration clause of the Operating Agreement. Accordingly, the lower courts should not have reached the merits of plaintiff’s motion for partial summary disposition, as the motion addressed substantive contractual matters that should have been resolved by the arbitrator. The case was remanded back to the trial court for further proceedings. View "Altobelli v. Hartmann" on Justia Law

In 2013, Calumet River Fleeting fired a boat operator. The Union, which represents operators in three states, filed a grievance. Calumet refused to participate in arbitration. In 2006, Calumet and the Union had signed a memorandum of agreement binding Calumet to the terms of the Great Lakes Floating Agreement, a collective bargaining agreement that covers marine construction. The agreement contained an “evergreen clause” requiring the employer to adhere to the terms of each successive edition of the agreement until the agreement was properly terminated. In September 2008, Calumet terminated its participation in the Floating Agreement, meaning that contractors who were signatories to the Agreement could no longer hire Calumet without violating the Agreement’s subcontracting provision. Less than two years later, Selvick (Calumet’s owner) organized a new company, Selvick Marine, which signed a memorandum of agreement with the Union. The district court granted summary judgment to Calumet, holding that it was no longer a party to any agreement with the Union that might have required arbitration. The Union appealed, arguing that an earlier arbitration award in an unrelated proceeding had found that Calumet was an alter ego of Selvick Marine. The Seventh Circuit affirmed, rejecting the alter ego argument. View "Calumet River Fleeting, Inc. v. Int'l Union of Operating​ Eng'rsi" on Justia Law