The Potential Impact of Today's Supreme Court's 5-4 Decision on Arbitrability
by Michael Fox
It is never too much a surprise when the Supreme Court reverses the 9th Circuit, nor in recent years is it a surprise when the Court hands down a decision favoring arbitration of disputes, even in employment law matters. In a narrow sense, that is the substance of today's 5-4 decision in Rent-A-Center, West, Inc. v. Jackson, (S.Ct. 6/21/10) [pdf].
The dispute was a procedural one, who has the power to determine the initial question of arbitrability in a particular set of circumstances, the court or the arbitrator. In one sense, all the Supreme Court did was lay down the guideline for how the challenge should be made if the party wishes the Court to be the interpreter. If that were the only consequence, it would be an important case for practitioners dealing with these issues, but at least the applicable law would be more clear and parties could make their arguments accordingly.
If that is the only result of today's ruling, then at least to me, this will ultimately be a rather inconsequential decision. In the short term, this employer will have won a victory (although not on the merits of the case) and parties will adapt their positions going forward to comply with the holding.
However, rather than being another good day for employers in the Supreme Court, which is much rarer than most believe, it is quite possible that employers may rue the day that Justice Kennedy cast his lot with Justices Scalia (the author of the opinion), Thomas, Roberts and Alito on this case.
I can almost guarantee, in fact it may very well occur before I finish drafting this post, that there will be a hue and outcry by Senator Leahy and others that the Supreme Court has dealt yet another vicious and erroneous blow to employee rights and that the only recourse is swift and sure Congressional action. (If that occurs, I think most objective commentators will agree that it a tremendous overstatement of what really happened today.)
The problem for employers is that the swift and sure Congressional action if it should come, is unlikely to merely undo Rent-A-Center. It is much more likely to be the enactment of the Arbitration Fairness Act, which notwithstanding what you may hear, will be the end of arbitration as a means of dispute resolution in the employment setting except for collective bargaining agreements.
I am not sure what term one uses to describe something that is far worse than a mere pyrrhic victory, but if the result of today's decision is the passage of the Arbitration Fairness Act , then the employer community will certainly need one.
Update: The first linkage (at least that I have seen to the AFA):
Public Citizen's Gupta noted that the House Judiciary Committee on June 23 is scheduled to consider the proposed Arbitration Fairness Act. "The timing is interesting," he said, adding, "The Court and Congress are moving in very different directions. I think this decision will help provoke a legislative response. It really is an attempt by the Court to take away the last safety valve available to consumers and employees."
from a National Law Journal article
discussing today's decision.
I am not quite sure when Senator Patrick Leahy's statement
on today's case was released, so I can't say how accurate I was on the timing, but I did nail the content pretty well:
Today, five members of the Supreme Court struck a blow to our nation’s civil rights laws and the protections that American workers have long enjoyed under those laws.
And while there is no mention in the press release about the pending Arbitration Fairness Act, it doesn't take much reading between the lines to see where Senator Leahy stands:
There is no rule of law in arbitration. There are no juries or independent judges in the arbitration industry. There is no appellate review. There is no transparency. And as a result of today’s divisive ruling, there will likely be no justice for millions of American workers and their families. The courthouse doors have simply been closed to them. Today’s opinion also gives big business a disincentive to treat their employees fairly and will no doubt lead to virtually all companies requiring their employees to sign one-sided arbitration agreements as a condition of employment.
This is a big issue, although it may not seem so to the general public. Unfortunately, that means it may be easier than some other legislation to slide by under the radar.
If you have an interest in retaining arbitration as part of a dispute resolution program, it is high time to be making sure your senators and representatives are aware of your position.
Tuesday, June 15, 2010
Post-Vacation, On the Road Again, Posting
by Michael Fox
Back when there were only two or three of us bending your ear on employment and labor law related matters, I felt a weird compunction to announce when I was going to be on an extended trip with no posting. Now that employment law related blogs are both numerous and more importantly of extremely high quality, it seems much less important, and in fact somewhat grandiose. (Not to say that it wasn't before, I just feel differently about it now.)
So, all last week I was enjoying Portland and the Oregon coast and the cool weather. The rain, well not as much, but it was better than the heat in Austin.
Today, I am back on the (business) road again and was curious to see Workplace Diva's post, More Business Travelers Have Roommates.
I am not surprised to find that more companies are asking employees to share given the economic times, I am surprised that an increased group seems more willing to put up with it. I think that probably is more a true measure of how really concerned about their jobs individuals are than as Chris so nicely puts it, looking forward to "making conversation with a co-worker who is trimming his nose hair and wearing Simpsons pajamas."
What it also did was remind me that one of the most clicked through posts of this blog dealt with the same subject more than four years ago, Requiring Rooming on the Road - A Caution From Your Lawyer.
Since my advice has not changed, maybe it would not be a bad idea for anyone considering it to click through again.
And speaking of traveling, congratulations to Prof Rick Bales, who was kind enough to help me with some information for an upcoming speech while he was getting prepared for work/study, and I hope a little time for pleasure, in Malaysia this summer. See, Bales Receives Special Fulbright Grant to Study and Teach in Malaysia.
Tuesday, June 01, 2010
When "inside" Witnesses Support the Other Side -- Recipe for an MDV
by Michael Fox
In a speech I have given about trying employment law suits, one of the first points is that not all lawsuits should be tried. And one of the things that would make me look twice is if there were a key witness, who appeared to have really good inside knowlege, who is not supporting my story.
That seemed to be what happened in the case of an Egyptian born Muslim doctor, who was supported by his immediate supervisor, but claimed discrimination and retaliation from another doctor. See, Medical center ordered to pay Egyptian-born doctor $3.6 million for discrimination. (Actually the headline is ahead of itself as the jury verdict was just returned last Wednesday in federal court in Dallas and the presiding judge has yet to enter a judgment.)
The defendant was the prestigious Texas Southwestern Medical Center. It apparently staffed Parkland's Hospital's AID Clinic, which is where Dr. Naiel Nassar worked. The key witness was his direct supervisor at the AIDS clinic who said that statements made by the head of his Department at Southwestern described a "disconnect between [her] statements and the reality of Dr. Nassar's work." He also at least implied there was a religious bias, since the witness noted the head of the department made it clear that she was Jewish and thought he (the witness) was as well (he was Christian.)
To compound problems, after Dr. Nassar resigned, the same witness said he recommeneded a Pakistani born Muslim to replace Dr. Nassar but the same director "offered the man the job at an unattractively low salary and ultimately hired a less qualified white doctor for more money."
Obviously, that's one side of the story and a bit of the other was the medical school's statement after the verdict that the record introduced at trial showed letters of support and recommendations for Dr. Nassar from the same director of his department being accused of discrimination and retaliation.
Thinking the evidence will support a view that your main was actually a supporter of the Plaintiff, not someone who discriminated against them, could seem fool hardy, but is easier to understand since Dr. Nasser was not fired, but resigned.
Unfotunately, it is hard for both stories to co-exist no matter how they are spun. It might also be one where you would anticipate that an "insider" witness' testimony might carry some additional weight.
If the defendant is the one who has not accurately predicted the view that a jury will take when faced with a binary choice, the result far too often is a large adverse award.
In a case where the positions are diametrically opposed, the jury that rules against your position has found you not only discriminated, but also that you have lied to them about it. An unfortunate double bind, that any employment lawyer practicing on the defense side should know and fear.