Justia Arbitration & Mediation Opinion Summaries

Local 36 obtained an arbitration award against Whitney d/b/a Whitney Industrial, a non-signatory to any collective bargaining agreement, under an alter-ego theory. Whitney appealed the district court's order enforcing the arbitration award. The court held that a non-signatory to an arbitration agreement need not participate in the arbitration while expressly reserving jurisdictional questions, file a preemptive declaratory judgment action, notify the arbitrator of its refusal to participate, or timely initiate a court action to vacate the arbitrator's award in order to have "the question of whether the parties agreed to arbitrate . . . decided by the court, not the arbitrator." Accordingly, the court agreed with Whitney that the joint adjustment board had no authority to determine whether his new company was the alter ego of Whitney Mechanical, and thus, bound by the collective bargaining agreement. Accordingly, the court vacated the judgment and remanded. View "Local 36 Sheet Metal Workers' Int'l Assoc. v. Whitney" on Justia Law

Wachovia appealed from the district court's refusal to vacate an arbitration award entered against it after it sued several former employees on what the arbitrators determined were frivolous claims. Wachovia argued that the arbitrators violated section 10(a)(3) of the Federal Arbitration Act (FAA), 9 U.S.C. 10(a)(3), and "manifestly disregarded" the law when they awarded attorneys' fees and costs under the South Carolina Frivolous Civil Proceedings Act (FCPA), S.C. Code Ann. 15-36-10. The court held that arbitrators have broad discretion to set applicable procedure and the court would not overturn an award for violating section 10(a)(3)'s protection against "any other misbehavior by which the rights of any party have been prejudiced" where the arbitrators attempted to address the one party's unhappiness with the fairness of the hearing and that party refused to take advantage of the opportunity provided. The court could not hold that the arbitrators manifestly disregarded the law when they awarded the attorneys' fees and costs where, in this case, the court found whether the arbitrators erred by not applying the FCPA's procedural requirements was a question that was itself not clearly defined and was subject to debate. Accordingly, the judgment was affirmed. View "Wachovia Securities, LLC v. Brand, II" on Justia Law

In 2006, plaintiff was a citizen of California and agreed to relocate to Illinois to work for defendant. When he quit about five months after moving, his family was still in California. He filed suit in state court, seeking relocation benefits the company allegedly promised. The company, which has its principal place of business in California removed to federal court, asserting that plaintiff was a citizen of Massachusetts. Plaintiff had a home in Massachusetts when the case was removed, was registered to vote there, and had a Massachusetts driver's license. The district court ordered arbitration under one of the contracts between the parties. The Seventh Circuit affirmed dismissal and denied sanctions. Relocation benefits are "employment related" and subject to arbitration under the agreement. The court noted that the company also failed to follow the rules. The company "should be able to tell the difference between residence and domicile, and should not have any difficulty complying with Rule 38."View "Heinen v. Northrop Grumman Corp." on Justia Law

Plaintiff, the former in-house counsel for Toyota Motor Corp. (TMS), presented TMS with a claim asserting, inter alia, constructive wrongful discharge related to TMS's alleged unethical discovery practices. TMS and plaintiff settled the claims and entered into a Severance Agreement. TMS subsequently sued in state superior court seeking a temporary restraining order (TRO) and permanent injunctive relieve to prevent plaintiff from violating the attorney-client privilege and plaintiff filed a cross complaint for a TRO and a permanent injunction prohibiting TMS from interfering with his business practices and those of his consulting business. The court held that the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., governed the Severance Agreement; the FAA authorized limited review of the Final Award; and the arbitrator did not manifestly disregard the law governing the Severance Agreement where the arbitrator's writing was sufficient under the terms of the Severance Agreement and the arbitrator did not manifestly disregard California law in addressing plaintiff's affirmative defenses. The court also held that the district court did not err in denying plaintiff's contempt motion. Accordingly, the judgment was affirmed. View "Biller v. Toyota Motor Corp., et al." on Justia Law

In 2005, during plaintiff's employment, defendant issued an employee handbook, including a provision that all employment-related disputes, whether initiated by an employee or by defendant, would be "resolved only by an arbitrator through final and binding arbitration," that disputes under the Fair Labor Standards Act were among those subject to the arbitration policy, that disputes cannot be brought as class actions or in representative capacities, and that the Federal Arbitration Act was its governing authority. Plaintiff signed a receipt that reiterated the arbitration policy. After his employment ended, plaintiff filed a class action, alleging violation of the FLSA by failing to adequately compensate him and other similarly-situated employees for overtime work. The district court denied a motion to stay proceedings and compel arbitration, finding that the provision was illusory because the employer retained the right to terminate or modify the provision at any time. The Fifth Circuit affirmed, noting that under the provision the company could make amendments almost instantaneously. View "Carey v. 24 Hour Fitness USA, Inc." on Justia Law

This case arose when Union entered into a limited job-preference agreement with Peabody Coal where the agreement included an arbitration clause. The district court subsequently entered judgment in favor of Union, ruling that the arbitrator properly determined the arbitrability of the dispute. In the alternative, the district court concluded that the dispute was arbitrable, even if the arbitrator lacked authority to decide the arbitrability question. Peabody Coal appealed. The court held, as an initial matter, that the court, not the arbitrator must decide whether the dispute was arbitrable. The parties' agreement lacked the requisite "clear and unmistakable" language evincing an intent to arbitrate arbitrability. Exercising the court's independent judgment on the arbitrability question, the court concluded that Peabody Coal had not rebutted the ordinary presumption in favor of arbitrability. Accordingly, the court affirmed the judgment and the parties must proceed to arbitration. View "Peabody Holding Co. v. United Mine Workers of America" on Justia Law

Exum, an employer of Elrac, served a notice of intention to arbitrate on Elrac, seeking uninsured motorist benefits. Elrace petitioned to stay the arbitration. Supreme Court granted the petition, but the Appellate Division reversed, permitting the arbitration to proceed. The court affirmed and held that a self-insured employer whose employee was involved in an automobile accident could not be liable to that employee for uninsured motorist benefits, notwithstanding the exclusivity provision of the Workers' Compensation Law. View "Matter of Elrac, Inc. v Exum" on Justia Law

Plaintiff sued the Union for damages caused by a work stoppage conducted by the Union in alleged violation of the collective bargaining agreement. The district court entered summary judgment without reaching the merits holding that the dispute was subject to arbitration under the contract. Plaintiff appealed. The court held that, in this case, the employee oriented grievance machinery in the parties' contract qualified and limited the universe of claims and grievances subject to arbitration, and the language negated the intention that the employer's claim for damages must be submitted to arbitration. Accordingly, the district court's grant of summary judgment was reversed and the case remanded for further proceedings. View "Jim Walter Resources, Inc. v. United Mine Workers of America, et al." on Justia Law

Plaintiff appealed from a judgment of the district court denying her petition to vacate an arbitration decision that rejected her claims, which asserted principally that defendant, her former employer, discriminated against her on the basis of gender in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq. On appeal plaintiff principally contended that the arbitrators' decision should be vacated in light of the Lilly Ledbetter Fair Pay Act of 2009 (Fair Pay Act), Pub. L. No. 111-2, 123 Stat. 5. The court reviewed the district court's conclusions of law de novo and found plaintiff's contentions to be without merit. Accordingly, the judgment of the district court was affirmed. View "Schwartz v. Merrill Lynch & Co, Inc." on Justia Law

Plaintiffs-Appellants Eddie Lee Howard and Shane Schneider (Employees) entered an employment contract with Defendant-Appellee Nitro-Lift Technologies, L.L.C. For two years following termination, the contract prohibited employees from: working for, leasing to, or selling equipment to competitors. The contract contained an arbitration agreement requiring application of Louisiana law with disputes to be resolved in Houston, Texas. After the employees terminated their employment with Nitro-Lift, they went to work for a competitor in Arkansas. The employer filed an arbitration proceeding in Houston. Howard and Schneider filed an application for a declaratory judgment and injunctive relief in Oklahoma asserting that the non-competition agreement violated public policy. The district court initially granted the employees a temporary injunction, prohibiting Nitro-Lift from continuing the arbitration proceedings in Texas. Thereafter, the employer filed a motion to dismiss. After considering the parties' briefs and arguments, the district court found the arbitration clause to be valid on its face and reasonable in its terms, lifted the temporary restraining order, and granted the motion to dismiss. Upon review, the Supreme Court held that: (1) the existence of an arbitration agreement in an employment contract did not prohibit judicial review of the underlying agreement; and as drafted, the non-competition covenants were void and unenforceable as against Oklahoma public policy. The Court reversed the district court's judgment and remanded the case for further proceedings. View "Howard v. Nitro-Lift Technologies, LLC" on Justia Law