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Posts Tagged ‘collective bargaining agreement’

If an Arbitration Panel Rules on an Issue the Parties did not Agree to Submit to that Panel, Should a Court Vacate the Award?

April 12th, 2019 Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Practice and Procedure, Authority of Arbitrators, Award Vacated, Awards, Enforcing Arbitration Agreements, Exceeding Powers, FAA Chapter 3, Federal Policy in Favor of Arbitration, Grounds for Vacatur, Practice and Procedure, United States Court of Appeals for the Seventh Circuit, Vacatur 2 Comments »

Introduction: Arbitration as a Way to Resolve those Disputes—and Only those Disputes—Parties Submit to Arbitrators

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The “first principle” of labor and commercial arbitration law is that “arbitration is a matter of consent, not coercion” —put differently, arbitration “is a way to resolve those disputes—but only those disputes—that the parties have agreed to submit to arbitration.” Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 678-80 (2010) (citation and quotations omitted); First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995) (citations omitted); Granite Rock Co. v. International Brotherhood of Teamsters, 561 U.S. 287, 295 & n.7, 294 n.6 (2010); AT&T Technologies, Inc. v. Communications Workers, 475 U. S. 643, 648 (1986). That first principle is integrally intertwined with “the central or primary purpose of the [Federal Arbitration Act (“FAA”)][,]” which is “to ensure that  private agreements to arbitrate are enforced according to their terms.”Stolt-Nielsen, 559 U.S. at 679 (citations and quotations omitted).

What happens if the parties agree to submit one category of disputes to a two-person arbitration panel and to submit another category of disputes to a three-person panel?

Continue Reading »

National Children’s Center, Inc. v. Service Employees Int’l Union: What Happens when an Arbitrator Interprets a Contract, but does not even Arguably Apply the Interpretation to the Parties’ Dispute?

October 20th, 2014 Arbitration Agreements, Arbitration Practice and Procedure, Authority of Arbitrators, Awards, Contract Interpretation, Grounds for Vacatur, Judicial Review of Arbitration Awards, Practice and Procedure, United States District Court for the District of Columbia, United States Supreme Court Comments Off on National Children’s Center, Inc. v. Service Employees Int’l Union: What Happens when an Arbitrator Interprets a Contract, but does not even Arguably Apply the Interpretation to the Parties’ Dispute?

Introduction

The deferential Enterprise Wheel/Stolt-Nielsen/Oxford contract-based outcome review standard the U.S. Supreme Court has applied to both labor arbitration awards under Section 301 of the Labor Management Relations Act, and commercial arbitration awards falling under the Federal Arbitration Act, is fairly simple to articulate yet often difficult to apply, especially in close cases.

In National Children’s Center, Inc. v. Service Employees Int’l Union, No. 13-1036, slip op. (D.D.C. Sep’t 19, 2014), United States District Court for the District of Columbia was faced with such a case, and the district court judge had to make a tough call. Applying the sometimes elusive standard, the Court concluded that the award had to be vacated. It was a close call— so close, in fact, that others may disagree and support their conclusions with what may appear to be compelling arguments.

On balance, we think the Court did the right thing given the somewhat unusual circumstances the case presented. But at least on some level it doesn’t matter. The district court judge did exactly what a good judge should do: she followed the law and, faced with the task of applying the law to a rather odd set of circumstances, she did so in the way she thought (and we agree) the law should be applied, even though the result was overturning an award.

It is quite likely that on remand the arbitrator will issue an award reaching the same conclusion and that the second award will be judicially enforced. While some might argue that vacatur should have been denied for expediency’s sake, that would not only have been the wrong decision, but a shortsighted one. Continue Reading »

The Tenth Tells us Time (Usually) Waits for No One: United Food & Commercial Workers Int’l Union v. King Soopers, Inc.

May 7th, 2014 Appellate Practice, Arbitrability, Arbitration Practice and Procedure, Authority of Arbitrators, Awards, Grounds for Vacatur, Judicial Review of Arbitration Awards, Labor Arbitration, Practice and Procedure, State Arbitration Law, State Arbitration Statutes, State Courts, Statute of Limitations, United States Court of Appeals for the Tenth Circuit, United States Supreme Court Comments Off on The Tenth Tells us Time (Usually) Waits for No One: United Food & Commercial Workers Int’l Union v. King Soopers, Inc.

Introduction

Arbitration is supposed to be a speedy alternative to litigation, and that is supposed to be true as respects commercial or employment arbitration governed by the Federal Arbitration Act (the “FAA”) and labor arbitration arising under the Railway Labor Act, 45 U.S.C. §§ 151, et. seq., or Section 301 of the Taft-Hartley Act (a/k/a the Labor Management Relations Act (“LMRA”)), 29 U.S.C. § 185. Arbitration awards are generally presumed to be valid, which puts the burden on challengers to establish their invalidity, at least provided the challenging party entered into a valid and enforceable arbitration agreement with the defending party.

Adjudicating a non-frivolous award challenge usually takes time, and if the challenge turns out to be valid, an order vacating the award does not usually resolve the underlying dispute, which, absent a settlement, must be resolved through further ADR or judicial proceedings. Delay is inevitable and delay undermines arbitration’s ability to compete with litigation.

The FAA and most or all state arbitration statutes try to minimize delay by not only by restricting t he scope of judicial review of awards, but also by imposing short limitation periods for vacating awards—for example, three months under the FAA and 90 days under many state arbitration statutes. See 9 U.S.C. § 12; see, e.g., N.Y. Civ. Prac. L.& R. § 7511(a); Fla. Stat. § 682.13(2); Wash. Rev. Code § 7.04A.230(2). Some state statutes impose shorter periods. See, e.g., Conn. Gen. Stat. § 52-420(b) (30 days); Mass. Gen. Laws ch. 251, § 12(b) (30 days); but see Cal. Code Civ. P. § 1288 (100 days).

By contrast, a motion or petition to confirm an award is usually subject to a longer statute of limitations. Cases governed by Chapter 1 of the FAA (e.g., domestic arbitrations between domestic parties), for example, are subject to a one-year limitation period. See 9 U.S.C. § 9.

Under the FAA, and presumably under many or most state arbitration statutes, if a party does not bring a timely petition to vacate, and the other moves to confirm after the time period for vacating an award has elapsed, then the challenging party cannot raise grounds for vacatur as defenses to confirmation, even if it does not seek an order vacating the award. See, e.g., Florasynth, Inc. v. Pickholz, 750 F.2d 171, 175-76 (2d Cir. 1984) (FAA); Kutch v. State Farm Mutual Auto. Ins. Co., 960 P.2d 93, 97-98 (Colo. 1998) (Colorado law); but see Lyden v. Bell, 232 A.D.2d 562, 563 (2d Dep’t 1996) (Where a confirmation proceeding “is commenced after the 90-day period, but within the one-year period. . . .[,] a party may, by cross motion to vacate, oppose the petition for confirmation on any of the grounds in CPLR 7511 even though his time to commence a separate proceeding to vacate or modify under CPLR 7511(a) has expired.”) (citations omitted) (New York law); 1000 Second Avenue Corp. v. Pauline Rose Trust, 171 A.D.2d 429, 430 (1st Dep’t 1991) (“an aggrieved party may wait to challenge an award until the opposing party has moved for its confirmation”) (New York law).

In United Food & Commercial Workers Int’l Union v. King Soopers, Inc., No. 12-1409, slip op. (10th Cir. Feb. 28, 2014), the United States Court of Appeals for the Tenth Circuit reminds us that the same rules apply to LMRA Section 301 labor-arbitration-award enforcement actions. Section 301 does not specify limitation periods for vacating arbitration awards, and as a general rule, courts “borrow” the most analogous state statute of limitations. See, e.g., Local 802, Assoc. Mus. of N.Y. v. Parker Meridien Hotel, 145 F.3d at 88-89 (2d Cir. 1998). In King Soopers the Tenth Circuit borrowed Colorado’s 90-day statute of limitations for vacating an award.[1]

King Soopers might be looked at as a refresher course in how important it is to act quickly and decisively when one finds oneself at the wrong end of an arbitration award that might not meet the modest criteria for summary confirmation or enforcement. While roughly nine years elapsed between the date the employee filed the grievance and the date the arbitrator issued the award, the Court, reversing the district court’s decision to the contrary, held (quite correctly) that King Sooper’s just-over-90-day delay in asserting grounds to vacate the award foreclosed it from opposing the union’s suit to enforce the award. Continue Reading »

United States Supreme Court Update: Union Pacific and Granite Rock Labor Arbitration Cases

October 11th, 2009 Authority of Arbitrators, Labor Arbitration, United States Court of Appeals for the Ninth Circuit, United States Court of Appeals for the Seventh Circuit, United States Supreme Court 1 Comment »

Introduction

So far the United States Supreme Court has agreed to hear only one arbitration case governed by the Federal Arbitration Act:  Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198), which has been set for oral argument at 10:00 a.m. Eastern Standard Time, December 9, 2009.   (See Russ Kunkel’s LawMemo Arbitration Blog  here.)  We have written extensively on Stolt-Nielsen, which concerns whether class arbitration may be imposed on parties whose contracts are silent on that point.  (Posts available here,  here, here, here, here, here, here, here and here.)

The Supreme Court has also agreed to hear two labor arbitration cases.  The first is Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers & Trainmen (08-604), which is governed by the the Railway Labor Act (“RLA”), 45 U.S.C. §§151 et seq.  The RLA, among other things, requires arbitration before the National Railroad Adjustment Board (“the Board”) of labor disputes involving railway workers.  Union Pacific, for all practical purposes, is therefore not a contractual arbitration case, but an administrative law one, and the outcome will likely have  little or no effect on Federal Arbitration Act jurisprudence.  The Court held oral argument on October 7, 2009.  (Oral argument Tr. here

The second is Granite Rock Co. v. International Brotherhood of Teamsters (08-1214), which arises under Section 301 of the Labor Management Relations Act.  The Court is expected to set argument for later this Fall.  (See Russ Kunkel’s LawMemo Employment Law Blog here.)   Though not governed by the Federal Arbitration Act, Granite Rock, unlike Union Pacific, is a contractual arbitration case.  And the outcome may be relevant to cases falling under the Federal Arbitration Act. 

We briefly summarize below the issues the Court will presumably address in these labor arbitration cases and discuss why Granite Rock may be more controversial than it appears at first blush.    Continue Reading »

Shipkevich v. Staten Island Univ. Hosp., 14 Penn Plaza LLC v. Pyett, and the “Clear and Unmistakable” Rule

June 30th, 2009 Arbitrability, Authority of Arbitrators, United States District Court for the Eastern District of New York, United States Supreme Court 1 Comment »

 On April 4 we reported on 14 Penn Plaza LLC v. Pyett, 129 S. Ct. 1456 (2009) (Thomas, J.), and published a follow-up post on April 7, 2009 (posts available here and here).     The question before the Court was whether “a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate [Age Discrimination in Employment Act (“ADEA”)] claims is enforceable as a matter of federal law.”   The Court told us the answer was “yes.”   

That answer, of course, begs the question whether any particular collective bargaining agreement (“CBA”) “clearly and unmistakably” requires arbitration of statutory claims.  The Court in Shipkevich v. Staten Island Univ. Hosp., No. 08-CV-1008 (FB)(JMA), 2009 WL 1706590 (E.D.N.Y. June 16, 2009) recently considered, among other things, whether the CBA before it clearly and unmistakably required arbitration of claims under  Title VII of the Civil Rights Act of 1964 (“Title VII”), New York State civil rights legislation, and New York City’s Human Rights Law, and said the answer was “no.”  So let’s take a brief  look at Shipkevich to get some perspective on what “clear and unmistakable” means.  Continue Reading »

The Senate Weighs in With Its Own Arbitration Fairness Act

May 7th, 2009 Arbitrability, Authority of Arbitrators, Legislative Developments, United States Supreme Court 1 Comment »

On April 29 — a/k/a “Arbitration Fairness Day” – – Senator Russ Feingold (D-WI) introduced the Senate’s version of the Arbitration Fairness Act of 2009 (S. 931).  The Senate’s version  tracks the House version in many respects, but there are some important differences between the two. 

The Senate Arbitration Fairness Act adds a Chapter 4 to the Federal Arbitration Act, rather than amending Section 2 of Chapter 1.  This Proposed Chapter 4 consists of two sections:  Section 401, entitled “Definitions”; and Section 402, entitled “Validity and Enforceability.”  Proposed Section 402(a) states:  “In General – Notwithstanding any other provision of this title, no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment, consumer, franchise, or civil rights dispute.”  Proposed Section 402(b) provides: 

(1)  IN GENERAL – An issue as to whether this chapter applies to an arbitration agreement shall be determined under Federal law.  The applicability of this chapter to an agreement to arbitrate and the validity and enforceability of an agreement to arbitrate to which this chapter applies shall be determined by the court, rather than the arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement. 

(2)  COLLECTIVE BARGAINING AGREEMENTS – Nothing in this chapter shall apply to any arbitration provision in a contract between an employer and a labor organization or between labor organizations, except that no such arbitration provision shall have the effect of waiving the right of an employee to seek judicial enforcement of a right arising under a provision of the Constitution of the United States, a State constitution, or a Federal or State statute, or public policy arising therefrom.  Continue Reading »

Some Interesting Questions Raised by the Pyett Decision

April 7th, 2009 Arbitrability, Authority of Arbitrators, Legislative Developments, United States Supreme Court 4 Comments »

On April 4 we reported on 14 Penn Plaza LLC v. Pyett, ___ U.S. ___ (2009) (Thomas, J.) (available here), as did many others last week.  Professor Sarah Cole of the ADR Prof Blog  published a thoughtful and well-written piece on Pyett (available here), which raised some interesting questions.   For example, Professor Cole observed that “if the Arbitration Fairness Act passes, it would not surprise me to see a subsequent effort to overturn the Pyett decision.”   As discussed in a series of posts we are publishing on the Fairness Act (Part I available here), the Act would render arbitration agreements falling within the scope of the FAA invalid and unenforceable to the extent they require predispute arbitration of consumer, employment, franchise and statutory civil rights disputes.  Continue Reading »