SCOTUS Upholds Employer Arbitration Requirement

This month, in a 5-4 decision, the U.S. Supreme Court ruled that an employer can lawfully require employees to arbitrate as a condition of employment any related disputes on an individual basis and to waive their right to participate in a class action suit or class arbitration. The case involved an effort by workers to file a class action suit against an employer for violating the federal minimum wage law. The employer sought to dismiss the case because it insisted as a condition of employment that the employees waive their ability to go to court or be part of any class action. Rather, any dispute had to be resolved out of court in a private arbitration. The case, Epic Systems v. Lewis, arose from the U.S. Court of Appeals for the Seventh Circuit. Companion cases, Ernst & Young v. Morris, from the Ninth Circuit and National Labor Relations Board v. Murphy Oil, from the Fifth Circuit were argued as a trio before the Supreme Court which decided they differed only in detail, not substance. The Federal Arbitration Act (FAA) requires courts to enforce arbitration agreements between employers and employees according to their terms, even when the agreements provide only for arbitration through “individualized proceedings” rather than a class. In this holding, the Court refused to read the National Labor Relations Act (NLRA) to prohibit arbitration agreements requiring individualized arbitration as an impermissible restriction on employee rights under the NLRA to “engage in … concerted activities for the purpose of … mutual aid or protection,” 29 U.S.C. § 157, holding that Section 7 of the act “focuses on the right to organize unions and bargain collectively” and “does not even hint at a wish to displace" the FAA. The Court stated the FAA and the NLRA have long coexisted (since 1925 and 1935 respectively) and found the suggestion they might conflict something quite new. The Court reasoned that the employees’ theory ran “afoul of the usual rule that Congress does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions..." See more in article here-- https://bit.ly/2Jk3e04 and read full opinion here-- https://bit.ly/2rWzAE8

Join us next month in Orlando!

Next month, at The Florida Bar Annual Convention in Orlando, our Alternative Dispute Resolution (ADR) Section Executive Council (EC) will hold its annual meeting at the Hilton Bonnet Creek and an ADR CLE/CME Program: Inside the Mediator’s Mind. The June 14th CLE/CME will occur at 1:00pm, followed by a reception to take place from 4:30-6:30pm. The ADR EC meeting is set for June 15th at 9:00am. The ADR Section plans to continue advancing new programs and opportunities for continued growth and participation in the section. The ADR Section was established in 2010 to provide a forum for lawyers interested in alternative dispute resolution and to provide for discussion and exchange of ideas leading to an improvement of individual ADR skills and abilities. The ADR Section keeps members informed and updated regarding legislation, rules, and policies in connection with mediation and other ADR processes and the responsibilities they impose on mediator and arbitrator members, as well as provide quality continuing legal education programs. Additionally, ADR Section committees are open to members to plan and execute section activities, events, and programs to benefit section members. More information can be found at ADR section website, www.fladr.org. Our goal is to make the ADR Section more accessible to all Florida Bar members, engaging them through information on available on the website, such as links to MEAC opinions, and by our social media posts on Facebook and Twitter (@FlaBarADR). In addition, each issue of the section’s "News & Tips" publication can be viewed from the website. See the Bar's Annual Convention page for a full schedule of events here-- https://bit.ly/2G2J98F and https://bit.ly/2wDFzmf Join our ADR Section by applying here-- https://bit.ly/2wLlIRQ or click to add it when paying your Florida Bar dues renewal-- https://bit.ly/2k0fTXT

Deepwater Arbitrator Not Biased

The English Court of Appeal ruled that an arbitrator chairing an insurance case arising from the Deepwater Horizon oil rig explosion in the Gulf of Mexico ought to have disclosed involvement in overlapping cases, but said failure to do so did not make him biased. In a dispute following the Deepwater Horizon incident which caused extensive environmental damage along the Gulf Coast, numerous claims were made against BP, as well as Transocean and Halliburton, both of which had liability insurance from Chubb. After settling with claimants, both companies made claims under their insurance policies which Chubb rejected on the basis that the settlements were unreasonable. Halliburton commenced arbitration proceedings against Chubb and each party appointed an arbitrator. The parties could not agree on the identity of the third arbitrator who was then court-appointed to chair the tribunal. The chair disclosed that he was already in two unrelated insurance cases to which Chubb was party. Transocean later also commenced arbitration against Chubb. Chubb named the chair arbitrator in the Halliburton case as its party-appointed arbitrator. Prior to accepting this appointment, it was disclosed to Transocean that the same arbitrator was appointed chair in the Halliburton case and in the other Chubb arbitrations which had been disclosed to Halliburton. However, the arbitrator failed to disclose to Halliburton his proposed appointment in the Transocean dispute. Halliburton later tried to remove the arbitrator on the grounds of doubts as to impartiality, but a trial court found there was no appearance of bias against Halliburton which then appealed. While the appeals court accepted Halliburton’s concerns of unfairness where an arbitrator accepts appointments in overlapping cases with only one common party, the court found arbitrators, like judges, are to be assumed trustworthy and to understand that they should approach every case with an open mind. They found the mere fact of an overlap does not give rise to justifiable doubts of impartiality. While finding best practice calls for an arbitrator to disclose circumstances that would lead an observer to see a real possibility of bias, such that disclosure should have been made, they nevertheless rejected the appeal. See more here-- https://bit.ly/2I7QA3u and https://bit.ly/2I2ljir