Justia Arbitration & Mediation Opinion Summaries

Epic Systems sent an email to employees, containing an arbitration agreement mandating that wage-and-hour claims could be brought only through individual arbitration and that the employees waived “the right to participate in or receive money or any other relief from any class, collective, or representative proceeding.” The agreement included a clause stating that if the “Waiver of Class and Collective Claims” was unenforceable, “any claim brought on a class, collective, or representative action basis must be filed in a court of competent jurisdiction.” It stated that employees were “deemed to have accepted this Agreement” if they “continue[d] to work at Epic.”.The following day, Lewis, a “technical writer” at Epic, followed instructions for registering his agreement. Later, Lewis had a dispute with Epic, and sued Epic in federal court, under the Fair Labor Standards Act, 29 U.S.C. 201, and Wisconsin law. Lewis responded that the arbitration clause interfered with employees’ right to engage in concerted activities for mutual aid and protection and was unenforceable. The district court agreed. The Seventh Circuit affirmed denial of the motion to compel arbitration, finding that the agreement violated the National Labor Relations Act, 29 U.S.C. 151, and is also unenforceable under the Federal Arbitration Act, 9 U.S.C. 1. View "Lewis v. Epic Sys. Corp." on Justia Law

In 2007, Linda Johnson enrolled her mother, Inez Roberts (Mrs. Roberts), in Heritage Healthcare of Estill (HHE) to receive nursing home care. Johnson held a general power of attorney for Mrs. Roberts, and as such, signed an arbitration agreement with HHE on her mother's behalf upon Mrs. Roberts's admission to HHE. Within six months of entering HHE, she developed severe pressure ulcers, resulting in the amputation of her leg and ultimately, her death in 2009. Prior to Mrs. Roberts's death, in August 2008, Johnson requested HHE allow her access to Mrs. Roberts's medical records, but HHE refused, citing privacy provisions in the Health Insurance Portability and Accountability Act (HIPAA). Johnson then filed an ex parte motion seeking to obtain a copy of Mrs. Roberts's medical records from HHE and to restrain HHE from changing, altering, or destroying the records. The circuit court granted a restraining order, and HHE filed a motion to dissolve the order, again citing HIPAA's privacy provisions. Subsequently, at Johnson's request, the circuit court appointed her Mrs. Roberts's guardian ad litem (GAL) in order to pacify HHE's HIPAA concerns. However, HHE still refused to produce the records. The court again ordered HHE to produce the records, and HHE appealed. During the pendency of the appeal, Mrs. Roberts died, and Johnson became her personal representative. HHE then produced the records, and the parties dismissed the appeal by consent. Several months after obtaining the records, in August 2010, Johnson filed a notice of intent (NOI) for a wrongful death and survival action against HHE. In October 2010, following an impasse at pre-suit mediation, Johnson filed her complaint. In November 2010, HHE filed its answer and asserted arbitration as one of several defenses, but did not move to compel arbitration at that time. Instead, HHE filed arbitration-related discovery requests on Johnson. Johnson asks this Court to review the court of appeals' decision to reverse the circuit court's finding that Heritage Healthcare of Estill (HHE) waived its right to arbitrate the claims between it and Johnson. Finding that HHE indeed waived its right to arbitrate the claims, the Supreme Court reversed the court of appeals. View "Johnson v. Heritage Healthcare" on Justia Law

Attorney Baxter and his former clients, the Bocks, participated in arbitration under the Mandatory Fee Arbitration Act (Bus. & Prof. Code, 6200), stipulating to be bound by the result. In his decision, the arbitrator concluded the services provided by Baxter should be valued at the amount already paid by the Bocks and awarded Baxter nothing. The parties acknowledge that the arbitrator erred in stating the amount of fees paid by the Bocks. When the error was brought to his attention, the arbitrator declined to correct his award. Later, Baxter discovered the arbitrator was in the business of auditing attorney bills and had written extensively about attorney overbilling. Baxter argued unsuccessfully that the arbitration award should be vacated because the arbitrator erred in stating the amount paid and failed to disclose matters relating to bias. The court of appeal affirmed confirmation of the arbitration award, finding that the arbitrator was not obligated to disclose the nature of his practice and that Baxter was not prejudiced by the arbitrator’s handling of the evidence. The amount of the court’s award of attorney fees to the Bocks was vacated and remanded to the for reconsideration of a lodestar compensation rate assigned to an attorney. View "Baxter v. Bock" on Justia Law

The parties were litigating a dispute involving an estate and family trusts when a family corporation filed for bankruptcy. The parties signed an agreement with a provision stating that they would attempt to settle any disputes by mediation and, if unsuccessful, by binding arbitration. The bankruptcy court’s order approving the settlement contained a permanent injunction prohibiting the parties from suing each other “on subjects pertaining to the subject matter of this litigation” without first obtaining its permission to do so. Later, that court denied Leonard permission to file suit and ordered the parties to comply with the agreement. The parties signed an arbitration agreement and “agreed to a resolution through arbitration pursuant to the provisions of the Texas General Arbitration Act.” Leonard subsequently filed a Complaint in Arbitration, alleging fraudulent conveyance and breach of fiduciary duties. After a hearing, the arbitrator dismissed most of the claims, stating that his ruling was based both on the statute of limitations and lack of standing Other parties sought to confirm the arbitration award; Leonard moved to vacate, alleging the arbitrator manifestly disregarded the law. Manifest disregard is not a ground for vacatur under the Act. The court of appeals held, and the Texas Supreme Court affirmed, that the TAA’s enumerated vacatur grounds (TEX. CIV. PRAC. & REM. CODE 171.087) are exclusive. View "Hoskins v. Hoskins" on Justia Law

Drywall entered into a labor agreement with the Union according to which Drywall assigned to a contractors' association authority to bargain on its behalf. After Drywall attempted to terminate the agreement, it discovered that the Union and association had executed a Memorandum of Understanding extending the term of the agreement. An arbitrator held that Drywall was bound by the Memorandum.The district court vacated the arbitration award and held that the arbitrator’s interpretation of the parties’ agreement was not “plausible” and was, moreover, contrary to public policy. The court held that the district court's decision exceeded its narrow authority to determine whether the arbitrator’s award was based on the parties’ contract and whether it violated an “explicit, well-defined, and dominant public policy,” and therefore the court reversed the district court's decision. View "SWRCC v. Drywall Dynamics" on Justia Law

North Memorial and MNA, pursuant to a collective bargaining agreement (CBA), referred a grievance to arbitration. The district court subsequently granted in part MNA's motion to vacate the arbitral award. The arbitrator addressed whether North Memorial violated the CBA when it refused to regularly schedule the Grievant with no weekend work. The district court imposed a prospective remedy on the parties. The court concluded that the district court correctly concluded the arbitrator was without authority to issue a prospective remedy because his decision exceeded the scope of the submission presented to him by the parties. Reading the plain language of the issue as set out in the decision, the court did not believe that the arbitrator was even arguably acting within the scope of his authority. Accordingly, the court affirmed the judgment. View "Minnesota Nurses Association.v. North Memorial Health Care" on Justia Law

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, T.I.A.S. No. 6997, 21 U.S.T. 2517, requires signatory states to recognize written arbitration agreements “concerning a subject matter capable of settlement by arbitration.” In this appeal, the court addressed an issue of first impression for the Circuit: whether a cruise ship employee who is injured on the job, and whose employment contract contains an arbitration agreement governed by the New York Convention and Chapter 2 of the Federal Arbitration Act, 9 U.S.C. 201, can bar arbitration by showing that high costs may prevent him from effectively vindicating his federal statutory rights in the arbitral forum. The court concluded that it need not definitely answer this question because, even if the court were to assume that plaintiff could raise a cost-based (public policy) defense in response to NCL's motion to compel arbitration, on this record he has plainly failed to establish that the costs of arbitration would preclude him from arbitrating his federal statutory claims. Therefore, the court affirmed the district court’s order compelling the parties to arbitrate. However, the court denied defendant's motion for sanctions. View "Suazo v. NCL (Bahamas), Ltd." on Justia Law

Plaintiff filed suit against his former employer, Yosemite, in state court for breach of contract and wrongful termination. After removal to federal court, and eight months after plaintiff filed his complaint, Yosemite moved to compel arbitration. The court affirmed the district court's denial of Yosemite's motion to arbitrate because Yosemite had waived its right to arbitration. In this case, although Yosemite knew of its existing right to arbitration, it acted inconsistently with this right by proceeding in court for more than eight months before asserting that right. Yosemite invoked the litigation machinery by removing the case to federal court, filing an answer, participating in a pretrial hearing, filing a scheduling report which recommended a trial date and discovery deadlines, and filing a motion to transfer venue. Yosemite also failed to do all it could reasonably have been expected to do to raise its right at the earliest feasible time. Finally, Yosemite's actions caused plaintiff prejudice. View "Messina v. North Central Distrib." on Justia Law

Central States is multiemployer pension fund. Bulk Transport is a Fund member and made contributions to the pension account of its employee, Loniewski. Bulk had certified that Loniewski was entitled by a collective bargaining agreement to participate in the Fund although the agreement was limited to Bulk’s drivers. Loniewski was a Bulk mechanic for 40 years. Bulk now denies that he was covered and has demanded that Central States refund $49,000 that Bulk had contributed to Loniewski’s pension account between 2002 and 2012. The Fund denied the request and sought a declaratory judgment. The district judge rejected Bulk’s claim. The Multiemployer Pension Plan Amendments Act of 1980 amends ERISA by imposing liabilty on employers who withdraw, partially or completely, from participation in an underfunded multiemployer pension fund, 29 U.S.C. 1381. Central States also assessed Bulk with withdrawal liability of $740,000 for the years 2010 through 2012, which Bulk challenged as excessive. At Bulk’s request, the court barred the Fund from enforcing its rules, which require arbitration of such a dispute by and conforming to the procedures of the American Arbitration Association. The Seventh Circuit affirmed with respect to the refund, but reversed with respect to the arbitration rules. View "Cent. States, SE & SW Areas Pension Funds v. Bulk Transp. Corp." on Justia Law

The NFL suspended New England Patriots quarterback Tom Brady for four games because of his involvement in a scheme to deflate footballs during the 2015 AFC Championship Game. After Brady requested arbitration, League Commissioner Roger Goodell, who served as arbitrator, entered an award confirming the discipline. The district court vacated the award based on the reasoning that Brady lacked notice that his conduct was prohibited and punishable by suspension, and that the manner in which the proceedings were conducted deprived him of fundamental fairness. The court concluded that the Commissioner properly exercised his broad discretion to resolve an intramural controversy between the League and a player. In their collective bargaining agreement, the players and the League mutually decided many years ago that the Commissioner should investigate possible rule violations, should impose appropriate sanctions, and may preside at arbitration challenging his discipline. In this case, the court concluded that Brady received adequate notice that deflation of footballs could lead to suspension, the Commissioner's decision to exclude testimony from NFL General Counsel fits within his broad discretion to admit or exclude evidence and raises no questions of fundamental fairness, and there is no fundamental unfairness in the Commissioner's denial of notes and memoranda generated by the investigative team where the collective bargaining agreement does not require the exchange of such notes. The court concluded that the Association's remaining claims are without merit. Accordingly, the court reversed the judgment of the district court and remanded. View "NFL Mgmt. Council v. NFL Players Ass'n" on Justia Law