Justia Arbitration & Mediation Opinion Summaries

The Arbitration Board, in its Merits Award, held that Verizon violated a Collective Bargaining Agreement (CBA) with its Union by contracting with common carriers to deliver FiOS TV set-top boxes to “existing customers” for self-installation, work that used to be performed exclusively by Union Service Technicians. Months later, the Board, in creating a “remedy,” expanded the scope of the violation to include deliveries to both existing and new customers and also the accompanying self-installations.The Third Circuit affirmed the district court in vacating the Remedy Award to the extent that it awards damages for work that falls beyond the outer bounds of the Merits Award--the delivery of boxes to existing customers. The deference given to arbitration awards is almost unparalleled, but not absolute. An arbitrator’s powers are limited by the parties’ agreement, which is made against a background of default legal rules. Under these default rules, an arbitrator who has decided an issue is prohibited from revising that decision without the consent of the parties. He can decide other issues submitted by the parties, correct clerical errors, and clarify his initial decision— but nothing more. The Board improperly awarded punitive damages, which are not permitted under the CBA. View "Verizon Pennsylvania LLC v. Communications Workers of America" on Justia Law

Harper runs deliveries under the “Amazon Flex” program, which supplements Amazon’s traditional delivery services. Interested drivers use an app to sign up to drive packages from Amazon warehouses, affiliated grocers, and participating restaurants to home shoppers. Harper signed up, clicking on a brightly colored button stating, “I AGREE AND ACCEPT” following the Terms of Service. The Terms included an arbitration provision with an “opt-out” process and specified that Washington law applies. Harper filed a putative class action on behalf of similarly situated New Jersey Amazon Flex drivers, alleging that Amazon misclassified them as independent contractors when they really are employees. Amazon moved to compel arbitration under the Federal Arbitration Act. Harper cited the exemption for a “class of workers engaged in foreign or interstate commerce,” 9 U.S.C. 1, noting that the drivers make some deliveries across state lines. Amazon argued that the claim is also arbitrable under state law. The district court ordered discovery to determine whether Harper falls within the FAA exception, declining to reach Amazon’s alternative state law argument.The Third Circuit vacated. Federal courts sitting in diversity must decide state law claims, including state arbitrability, even where the FAA may apply. That is a threshold inquiry, ensuring prompt review of state law claims, particularly before turning to discovery to sort through a comparatively complex federal question. View "Harper v. Amazon.com Services, Inc." on Justia Law

The Union represents about 165 employees at the Clinton research facility, staffed by EMRE. In 2015, a bargaining unit member retired. After advertising internally failed to fill the open position, EMRE used independent contractors to staff the position. The Union filed a grievance regarding the propriety of EMRE contracting out bargaining unit positions and attempting to permanently fill bargaining unit positions with contractors. The Collective Bargaining Agreement (CBA) allows the Company to “let independent contracts” as long as: during any period of time when an independent contractor is performing work of a type customarily performed by employees and employees qualified to perform such work together with all of the equipment necessary in the performance of such work are available in the Company facilities, the Company may not because of lack of work demote or lay off any employee(s) qualified to perform the contracted work."Arbitrator Klein found that the CBA “expressly limits contracting to a ‘period of time” and that EMRE pursued a plan to replace employees with contractors as they left EMRE. She concluded that EMRE’s actions undermined the composition and breadth of the bargaining unit. The Third Circuit affirmed the arbitration award preventing EMRE from permanently contracting out bargaining unit positions at the Clinton facility. Rejecting an argument that the arbitrator improperly considered extrinsic evidence contrary to the CBA, the court noted that the standard of review for upholding arbitration awards is highly deferential. The award “withstands the minimal level of scrutiny.” View "Independent Laboratory Employees' Union, Inc. v. ExxonMobil Research and Engineering Co." on Justia Law

Motorized-wheelchair users filed a purported class action, alleging that Uber discriminated against individuals with mobility disabilities by not offering a “wheelchair accessible vehicle” (WAV) option in the Pittsburgh area, citing the Americans with Disabilities Act (ADA), 42 U.S.C. 12181. They argued that but for the unavailability of WAVs, Plaintiffs would download the Uber app and use its ridesharing service. Uber moved to compel arbitration under the Federal Arbitration Act, 9 U.S.C. 3–4, contending that although Plaintiffs had never registered for an Uber account or accepted its Terms of Use, they were nevertheless bound by the mandatory arbitration clause of that agreement; Plaintiffs could not establish standing to sue in federal court unless they “step into the shoes” of actual Uber Rider App users.The Third Circuit affirmed an order denying Uber’s motion. Plaintiffs’ failure to download the Uber app, agree to the terms and perform the “futile gesture” of requesting a WAV ride did not prevent them from pleading an injury in fact. Plaintiffs’ disability discrimination claim did not rely on or concerncUber’s Terms of Use, but was based on the ADA. On interlocutory appeal from the denial of a motion to compel arbitration, appellate jurisdiction is confined to review of that order; the court has no independent obligation to review non-appealable orders, even jurisdictional ones concerning standing. View "O'Hanlon v. Uber Technologies Inc" on Justia Law

In a dispute concerning a construction company’s liability for contributions to the Benefits Fund, the Fund unilaterally scheduled arbitration. The company sought to enjoin arbitration, alleging fraud in the execution of the agreement it signed. The district court concluded that the court had the primary power to decide whether fraud in the execution vitiated the formation or existence of the contract containing the arbitration provision. The court enjoined arbitration pending resolution of factual issues that bear upon that claim.The Third Circuit affirmed. Under the Federal Arbitration Act (FAA), 9 U.S.C. 4, questions about the “making of the agreement to arbitrate” are for the courts to decide unless the parties have clearly and unmistakably referred those issues to arbitration in a written contract whose formation is not in issue. Here, the formation of the contract containing the relevant arbitration provision is at issue. View "MZM Construction Co. Inc. v. NJ Building Laborers Statewide BenefitsFunds" on Justia Law

The Union sought confirmation of an arbitration award under the Federal Arbitration Act, 9 U.S.C. 9. Section 9 provides that a district court “must grant” a confirmation order for an award upon application where the award has not been “vacated, modified, or corrected” under the Act. UPS, the loser in arbitration, opposed confirmation and filed a cross-motion to dismiss, arguing that the district court did not have subject-matter jurisdiction because there was no case or controversy as required by Article III of the Constitution, given that UPS agreed to abide by the award and corrected any subsequent violations.The Third Circuit reversed. The district court had subject matter jurisdiction to confirm the award even in the absence of a new dispute about it. The confirmation of an arbitration award is a summary proceeding that merely makes what is already a final arbitration award a judgment of the court. Confirmation is the process through which a party to arbitration completes the award process under the Act, as the award becomes a final and enforceable judgment, 9 U.S.C. 13. The Act not only authorizes but mandates, that district courts confirm arbitration awards by converting them into enforceable judgments through a summary proceeding. View "Teamsters Local 177 v. United Parcel Service" on Justia Law

The plaintiffs obtained payday loans from AWL, an online entity owned by the Otoe-Missouria Tribe of Indians. The loan agreement stated that the loan was governed by tribal law and that the borrowers consented to the application of tribal law. The plaintiffs filed a purported class action, asserting that AWL charged unlawfully high interest rates, in violation of federal and Pennsylvania law, including the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961-1968. The defendants moved to compel arbitration. The district court denied their motion, holding that the loan agreements, which provided that only tribal law would apply in arbitration, stripped the plaintiffs of their right to assert statutory claims and were therefore unenforceable. The Third Circuit affirmed. Because AWL permits borrowers to raise disputes in arbitration only under tribal law, and such a limitation constitutes a prospective waiver of statutory rights, its arbitration agreement violates public policy and is therefore unenforceable. View "Williams v. Medley Opportunity Fund II, LP" on Justia Law

Six U.S. plaintiffs rented cars from Payless. Each signed a one-page agreement, itemizing charges, below the final paragraph, which provides: “I agree the charges listed above are estimates and that I have reviewed & agreed to all notices & terms here and in the rental jacket.” After they signed their agreements, the rental associate folded the agreement, placed it a “rental jacket,” and handed it back. The rental jacket bears the title “Rental Terms and Conditions” and contains 31 paragraphs. The word “jacket” appears in only the second paragraph. The twenty-eighth paragraph requires arbitration. The rental associates said nothing about the rental jacket. Lee rented a car in Costa Rica, using a two-sided document. The front side contains the details of the transaction. The back is titled “Rental Agreement” and includes pre-printed terms, including an arbitration clause. Both sides have signature lines but Lee signed the only front.Plaintiffs brought a putative class action, alleging violations of New Jersey, Florida, and Nevada consumer protection statutes, unjust enrichment, and conversion, alleging that they were charged for products and services that they had not authorized. The Third Circuit affirmed the denial of a motion to compel arbitration. The rental jackets were not adequately incorporated into the U.S. Agreements; the U.S. Plaintiffs did not assent to the arbitration provision. A genuine dispute exists over whether Lee was on reasonable notice of the arbitration provision on the backside of the Costa Rica Agreement. View "Bacon v. Avis Budget Group Inc" on Justia Law

MHS, a private, non-denominational school, hired the Darringtons as full-time houseparents for student housing. The Union represents full-time MHS houseparents. The collective bargaining agreement arbitration provision covers “any dispute arising out of [its] terms and conditions,” including the “discipline or discharge” of Union members. A grievance includes “any dispute alleging discrimination against any [Union members].” The Union, on behalf of itself and any allegedly aggrieved Union members, waived any right to a private lawsuit alleging employment discrimination regarding matters encompassed within the grievance procedure. If aggrieved Union members are unsatisfied with the resolution of their disputes after discussions with MHS officials, “the Union [may seek] further consideration” by submitting the grievance to arbitration on their behalf.The Darringtons filed unsuccessful reports with the local state agency for children and youth services, concerning MHS's mandatory religious programming. They then filed charges of discrimination with the EEOC and the Pennsylvania Human Relations Commission alleging discrimination based on religion. Two months later, MHS fired the Darringtons, who filed additional charges. After receiving right-to-sue letters, the Darringtons filed a complaint, alleging discrimination and retaliation, Title VII, 42 U.S.C. 2000e. The district court denied MHS’s motion to compel arbitration. The Third Circuit reversed. The CBA clearly and unmistakably waives a judicial forum for the statutory discrimination claims. View "Darrington v. Milton Hershey School" on Justia Law

The Hospital has approximately 1,100 employees. About 500 are represented by the Union. Supervisors are not included in the bargaining unit. The collective bargaining agreement (CBA) provides that [v]acation will, so far as possible, be granted at times most desired by employees; but the final right to allow vacation periods, and the right to change vacation periods[,] is exclusively reserved to the Hospital. Any changes in vacation schedules may be realized by mutual consent. In the event the Hospital unilaterally changes a schedule causing the employee to suffer financial loss, the Hospital agrees to reimburse the employee for provable loss. Konsugar requested vacation during the week of December 25, 2017. The Hospital denied her request because her supervisor had requested that same week off and both could not be away at the same time. Konsugar filed a grievance. The arbitrator stated he could not “conclude that the subsequent reservation of exclusivity in allocating vacations entirely to the Hospital completely negates . . . ‘so far as possible’” and sustained the grievance. In a suit under the Labor Management Relations Act, 29 U.S.C. 185, the Third Circuit affirmed summary judgment in favor of the Hospital. The arbitrator’s decision disregarded the plain language of the CBA, ignored the intentions of the parties, and failed to construe such provision to give effect to all parts of the provision. View "Monongahela Valley Hospital, Inc. v. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union" on Justia Law