Justia Arbitration & Mediation Opinion Summaries

Real party in interest Alicia Moreno sued her former employer petitioner Garden Fresh Restaurant Corporation for claims related to a variety of alleged Labor Code violations. Moreno filed the action as a putative class action, and also pursued representative relief under the Private Attorney General Act of 2004 (PAGA). Garden Fresh moved to compel arbitration of Moreno's claims, on an individual basis only, based on two arbitration agreements that Moreno signed during her tenure as an employee of Garden Fresh. Garden Fresh requested that the court dismiss Moreno's class and representative claims, arguing that the parties' arbitration agreements did not contemplate class- or representative-based arbitration. The trial court granted the motion to compel arbitration, but specifically left to the arbitrator to decide the question whether the arbitration agreements between the parties contemplated classwide and/or representative arbitration, thereby denying Garden Fresh's request that only Moreno's individual claims be sent to arbitration. Garden Fresh filed a petition for a writ of mandate to the Court of Appeal, presenting one issue: who decides whether an agreement to arbitrate disputes between the parties to the agreement authorizes class and/or representative arbitration when the contract is silent on the matter - the arbitrator or the court? The Court concluded that the question whether an arbitration agreement permits class and/or representative arbitration was a gateway issue, and thus reserved " 'for judicial determination [u]nless the parties clearly and unmistakably provide otherwise.' " The Court granted the request for a writ of mandate to direct the trial court: (1) to vacate that portion of its order leaving it to the arbitrator to determine whether the parties agreed to class and/or representative arbitration; (2) to conduct further proceedings as necessary to determine whether the parties' arbitration agreement contemplates class and/or representative arbitration, and whether the plaintiff's representative PAGA claims may be arbitrated, or rather, whether that claim should be bifurcated; and (3) to enter a new order setting forth the court's determination as to these issues. View "Garden Fresh Restaurant Corp. v. Super. Ct." on Justia Law

After the Town of Athol unilaterally increased copayment amounts that members of the Professional Firefighters of Athol, Local 1751, I.A.F.F. (Union) pay for medical services under their health insurance plans, the Union filed a grievance under the parties’ collective bargaining agreement (CBA). An arbitrator determined that the Town violated the CBA by making the changes unilaterally. The Town filed a complaint in the superior court seeking to vacate the award and other relief. The superior court confirmed the portion of the award compelling the parties to collectively bargain over changes to copayment rates and vacated two remedial aspects of the award. The Supreme Judicial Court reversed in part, holding that the superior court judge erred in vacating any portion of the award. Remanded for entry of a judgment confirming the award in its entirety. View "Town of Athol v. Prof’l Firefighters of Athol, Local 1751, I.A.F.F." on Justia Law

Plaintiff-respondent Network Capital Funding Corporation filed a declaratory relief action alleging its arbitration agreement with defendant-appellant Erik Papke required Papke to arbitrate his wage and hour claims on an individual basis rather than the classwide basis he sought in his pending arbitration proceeding. According to Papke, the broad language in the parties’ arbitration agreement required the arbitrator, not the court, to decide whether the agreement authorized class arbitration. The trial court denied Papke’s petition, concluding it must decide whether the arbitration agreement authorized class arbitration, and in doing so found this particular agreement did not allow class arbitration. Papke appealed. After review, the Court of Appeal agreed with the trial court: "[d]eciding whether the parties’ arbitration agreement authorizes class arbitration does not simply determine what arbitration procedures the parties agreed to use, but rather whose claims the parties agreed to arbitrate. Supreme Court precedent requires courts to decide whose claims are covered by an arbitration agreement unless the parties clearly and unmistakably agree to have the arbitrator decide that question. Because Papke’s and Network Capital’s arbitration agreement does not clearly and unmistakably designate the arbitrator to determine whether the agreement authorizes class arbitration, we conclude the trial court properly decided that question." Furthermore, the Court concluded the trial court properly determined Papke’s and Network Capital’s arbitration agreement did not authorize class arbitration. View "Network Capital Funding Corp. v. Papke" on Justia Law

After Sining Mao left his employment with Seagate Technology, LLC, Mao joined Seagate’s competitor, Western Digital Corporation. Seagate subsequently commenced a district court action alleging that Mao stole Seagate’s trade secrets and confidential information and provided it to Western Digital. Western Digital invoked an arbitration clause in Mao’s employment agreement with Seagate. Before the arbitration hearing, Seagate brought a motion for sanctions against Western Digital and Mao (Appellants) based on alleged fabrication of evidence. An arbitrator issued an award against Appellants in an amount exceeding $500 million. The district court vacated the award in part, but the court of appeals reinstated the award. On appeal, Appellants argued that the arbitrator’s exceeded his authority by issuing punitive sanctions and prejudiced Appellants by refusing to hear evidence material to the controversy. The Supreme Court affirmed the court of appeals’ decision reinstating and confirming the arbitration award in full, holding that the arbitrator did not exceed his authority or refuse to hear material evidence as required for vacatur. View "Seagate Tech., LLC v. W. Digital Corp." on Justia Law

Lacie Smith worked for Express Check Advance of Mississippi, LLC. A condition in her employment papers was that she agreed to submit “any employment-related dispute” to arbitration. Later, in response to her termination, Smith sued Express Check in circuit court. The trial judge compelled arbitration and Smith appealed. Finding no reversible error, the Supreme Court affirmed. View "Smith v. Express Check Advance of Mississippi, LLC" on Justia Law

Polar Tank discharged a maintenance technician for failing to safely complete repair of an overhead crane. The Union grieved the discharge and the grievance was submitted to arbitration. The arbitrator partially upheld the grievance, reducing the technician's discipline to a thirty-day unpaid suspension. Polar Tank sued to vacate the arbitration award and the Union counterclaimed to enforce it. The court affirmed the district court's grant of summary judgment enforcing the award where the award at issue drew its essence from the collective bargaining agreement (CBA). The arbitrator considered the technician's poor performance and concluded that it constituted negligence but not the type of insubordination for which Article 29 mandated discharge; the court rejected Polar Tank's claim that the arbitrator was wrong to disregard the Standards of Conduct; and the arbitrator did not err in disregarding the Management Rights clause.View "PSC Custom, LP v. United Steel, etc." on Justia Law

Plaintiff filed a class action suit to recover unpaid overtime wages from her former employer, Bloomingdale's. The district court granted Bloomingdale's motion to compel arbitration, determining that shortly after being hired by Bloomingdale's, plaintiff entered into a valid, written arbitration agreement and that all of her claims fell within the scope of that agreement. The court concluded that plaintiff had the right to opt out of the arbitration agreement, and had she done so she would be free to pursue this class action in court. Having freely elected to arbitrate employment-related disputes on an individual basis, without interference from Bloomingdale's, she could not claim that enforcement of the agreement violated either the Norris-LaGuardia Act, 29 U.S.C. 101 et seq., or the National Labor Relations Act, 29 U.S.C. 151 et seq. The court concluded that the district court correctly held that the arbitration agreement was valid and, under the Federal Arbitration Act, 9 U.S.C. 1 et seq., it must be enforced according to its terms. The court affirmed the judgment of the district court.View "Johnmohammadi v. Bloomingdale's, Inc." on Justia Law

Plaintiff filed a class action suit alleging that Nordstrom violated various state and federal employment laws by precluding employees from bringing most class action lawsuits in light of AT&T Mobility LLC v. Concepcion. Nordstrom, relying on the revised arbitration policy in its employee handbook, sought to compel plaintiff to submit to individual arbitration of her claims. The district court denied Nordstrom's motion to compel. The court concluded that Nordstrom satisfied the minimal requirements under California law for providing employees with reasonable notice of a change to its employee handbook, and Nordstrom was not bound to inform plaintiff that her continued employment after receiving the letter constituted acceptance of new terms of employment. Accordingly, the court concluded that Nordstrom and plaintiff entered into a valid agreement to arbitrate disputes on an individual basis. The court reversed and remanded for the district court to address the issue of unconscionably.View "Davis v. Nordstorm, Inc." on Justia Law

Petitioners, Broadcasting Board of Governors, sought review of the Board's decision to uphold an arbitrator's finding that the petitioner violated both a collective bargaining agreement (CBA) and federal labor laws when it laid off sixteen employees. The court dismissed the petition for lack of subject matter jurisdiction because Congress has barred the courts from hearing challenges to FLRA orders that involve an award by an arbitrator, unless the order involves an unfair labor practice, and there was no unfair labor practice in this case.View "Broadcasting Board of Governors of Cuba v. FLRA" on Justia Law

AECI filed suit against the Union seeking to vacate the arbitrator's award and the Union counterclaimed for enforcement. Relying on the court's decision in Coca-Cola Bottling Co. v. Teamsters Local Union No. 688, the district court ruled that the last chance agreement (LCA) superseded the collective bargaining agreement and therefore, when the arbitrator ignored the clear and unambiguous terms of the LCA, he imposed his personal standards of industrial justice. The court concluded that the district court read the Coca-Cola bottling decision too broadly. Where a CBA requires "just cause" to discipline or discharge an employee but fails to define the term, the arbitrator's broad authority to interpret the contract, to which the court must defer, includes defining and applying that term of the contract. Viewed from this perspective, the arbitrator's decision to sustain the Union's grievance must be enforced. Because the arbitrator specifically invoked and applied the just cause provision of the CBA, the contract between AECI and the Union that defined his authority, his decision "draws its essence" from the CBA. Accordingly, the arbitrator's decision sustaining the Union's grievance must be enforced. The court declined to enforce the portion of the award granting the employee back pay from the day he was suspended until the day he was discharged. The court reversed and remanded.View "Associated Electric Coop. v. IBEW" on Justia Law