No Class Arbitration Under the FAA Unless Specifically Agreed, At Least for Now

Today the Supreme Court decided a case important in the employment law field although the underlying case was a commercial dispute. The question in Stolt-Nielsen v. AnimalFeeds International (S.Ct. 4.27.10) [pdf] was whether under the Federal Arbitration Act, arbitrators could decide that class action was appropriate if the arbitration agreement was silent on that issue. Holding that the answer was no, Justice Alito wrote:

From these principles, it follows that a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.

The vote was the now familiar one with Justice Alito being joined by C.J. Roberts and Justices Scalia, Kennedy and Thomas. Justice Sotomayor did not participate and Justice Ginzberg wrote the dissent. In an argument that too has become familiar, she argued that the Court was prematurely answering the question.

This is extremely good news for all the employers who have arbitration agreements which are silent on class action.

However, just like the members of the majority, the members of the dissent, and even the argument for the dissent, we all know what comes next -- the cry for Congressional reversal.

Hopefully I will be wrong, as class arbitration is something that should be undertaken only after a long and careful study. In fact, class actions may be in for such a look in the Duke v. Wal-Mart decision which ultimately has to end up on the Supreme Court's plate.

The possible pyrrhic nature of today's victory for employers could come if it sparks greater interest in passage of the Arbitration Fairness Act, which would in its present form solve the question of employment law class action cases in arbitration by doing away with arbitration in such matters altogether.

Round 2 in Dukes v. Wal-Mart to Plaintiffs

Today, in a 6-5 decision the 9th Circuit has affirmed the lower court's certification of a 1.5 million person class in a Title VII sex discrimination claim again Wal-Mart. See the article at Yahoo Finance, Court: Wal-Mart to face massive class action suit.

The decision itself checks in at 137 pages, which includes what the Yahoo Finance article calls a "blistering dissent." I have not read it yet, but I will hopefully get around to it before Round 3, which could be when the application for certiorari is filed, although there may be some more interim skirmishing in the 9th Circuit.

Road Racing in England

Important Note(particularly directed at any police officer reading this): my blog expresses a personal view which should not be assumed to be shared by my club or any other body.

Yesterday my club, Thames Velo hosted its annual road races.  I rode (rather ineffectively) in the 3/4 event and marsalled the E/1/2/3 event.  As a club we take pride in putting on a good safe race and a lot of time is invested in doing our bit to ensure that road racing continues to thrive.  However there has always been, and continues to be, an uneasy relationship between the car culture and those who seek to use the roads for non-motorised activity such as a bicycle race.  For many years, whilst road racing thrived on the continent, it was illegal here.  While the classics developed in France, Belgium and Holland racing in the UK was a clandestine underground affair frowned upon even by cycling organisations (who no doubt feared a backlash if the motoring public were even slightly inconvenienced.)  However during World War II cyclists began to organise road races in defiance of their national bodies and in 1960 the relevant government minister, exercising powers under the Road Traffic Act, promulgated the Cycle Racing on the Highways Regulations.  Though subsequently amended, these remain the governing regulations.  Under these regulations, Road Racing is permitted on the Highway provided notice is given to the local police, who have the power to impose such conditions as they think fit.
Therein lies a problem, as police authorities vary in the conditions that they 'see fit'.  This results, for example, in road races in one police authority being cancelled because the police 'see fit' to prevent simultaneous races on the same circuit; whereas the neighbouring police authority sees no problem with this.  It is an important democratic prinicple that the police are there to enforce the law not to enact it.  Giving the police a blanket discretion effectively to prevent a road race is clearly a matter in need of urgent review.
Second, the safety of road races is best ensured by competent marshalling and escorting (particularly by motorcycles such as the highly expereinced National Escort Group) and not by police discretion.  Acting as  a marshal I have never encountered a problem with asking motorists to stop for a short period to allow a cycle race to pass; many clearly enjoy the spectacle and express a keen interest on what is occuring.  Equally motorcycle escorts seldom meet resistance when they invite motor traffic to stop.  Whether motorcycle escorts and marshals have legal powers to force a motorist to stop is for practical purposes largely academic.  However some police authorities and officers are so motor-centric that they object to marshals or escorts requesting traffic to stop.  For that reason it is now high time that recognised escorts and marshals have the legal power to stop traffic to prevent danger.  This works well in Wales and is most needed where the local police authority is least sympathetic to the sport.
Thirdly, some difficulties can arise with an overzealous interpretation or application of the law.  Police have been known to object to cyclists being across the road when there is nothing coming the other way and no restriction on overtaking.  Speed radar guns are sometimes pointed at escorting vehicles because they (though not of course the cyclists) are required to adhere to speed limits which govern motor traffic.  It seems reasonable in the interests of safety, to provide that recognised escorting vehicles may exceed speed limits provided that they drive carefully.
British Cycling is raising the issue of road racing with prospective parliamentary candidates in a facebook campaign which well deserves the widespread support it is receiving.   Road racing is a sport which the British have been doing particularly well in in recent years, as any follower of the Tour de France will know.  We need a more European type of approach to this sport if it is to flourish and there is a clear need for elected law-makers to take control from the law-enforcers.

POWER To The People and Unintended Consequences

Immigration is a political hot button, which may be one of the greatest understatements of the year. It is certainly an issue on which people disagree, unfortunately, often disagreeably.

I certainly don't want to add to that unhelpful dialogue, but I have to admit my first reaction on reading the substance of the POWER Act (Protect Our Workers from Exploitation and Retaliation Act) was to quickly jump to what I forsee as unintended consequences.  The bill was introduced by Senator Menendez (D - NJ) and at this point has only three co-sponsors, Senators Gillibrand (D-NY), Murray (D-Wash), and Harkin (D-Iowa).

In short, the bill would prevent the deportation of individuals during the pendency of certain proceedings. One is criminal prosecutions where the individual is important to the prosecution. I can see how that could help overall crime enforcement and since the initiating action, a crime, is by some one other than the person tryng to avoid being deported, not that easy to abuse.

The other type of proceeding hower is serious labor violations. Under that section, an individual could avoid deportation if the individual:

(2)(A) has filed, or is a material witness to, a bona fide workplace claim (as defined in section 274A(e)(10)(B)(iii)(II) of such Act, as added by section 3(b)); and

(B) has been helpful, is being helpful, or is likely to be helpful to--

(i) a Federal, State, or local law enforcement official;

(ii) a Federal, State, or local prosecutor;

(iii) a Federal, State, or local judge;

(iv) the Department of Homeland Security;

(v) the Equal Employment Opportunity Commission;

(vi) the Department of Labor;

(vii) the National Labor Relations Board; or

(viii) other Federal, State, or local authorities investigating, prosecuting, or seeking civil remedies related to the workplace claim.

A summary of key provisions by the National Immigration Law Council makes it seem that protection from deportation would extend to a civil claim:

Stay of removal and employment authorization. Workers who have filed workplace claims or who are material witnesses in a workplace claim may receive a stay of removal and employment authorization until the workplace claim is resolved. This would allow workers to more effectively claim their labor rights and would allow the U.S. Department of Labor (DOL) to effectively prosecute employers who break the law.

It is not clear whether the suit has to be prosecuted by the government or if protection is extended to a suit where the individual employee is the plaintiff.

Although there is a provision that filing a claim just to avoid deportation will not be allowed, it does not take a genius to figure out that this statute will lead to a lot more suits and that "protection" against suits filed for that purpose is feeble to non-existent.

One of the aims of the legislation is certainly laudable, to provide a counter-balance to those unscrupulous employers who hire illegal aliens, take advantage of them and use either actual immigration enforcement or the threat of it to insulate them from liability for their wrong doing.

I won't argue with that aim, but on first blush, I have to believe there is a better solution.

Hat tip to Prof Marcia McCormick at Workplace Prof Blog,  Bill to Protect Non-Citizen Workers.

The Future of Unions: A Key Question

BNA's Daily Labor Report ($) has an article based on its in depth interview with the soon to be former head of the SEIU, Andy Stern, that is well worth the read. See, As Retirement Nears, SEIU's Stern Says Shift in Work Processes Top Issue Facing Unions.

The money quote for me:

Are there different ways workers can be successful in the 21st century in addition to unions or a different role for unions in the 21st century?

Regardless of how you feel about him, Stern has to be viewed as one of the more innovative leaders of the union movement, certainly in my career (and this week end is my 35th year law school reunion).

Although my practice has been much more oriented to employment than labor law, as an interested and somewhat better informed observer than many, that sentence says succinctly what I have thought about unions for a long time.

I believe unions have not adapted to the changing world as fast as needed. In what is a gross over-simplification, unions are operating on a blue collar model in what has increasingly become a white collar workplace; a world where a career is marked by multiple jobs and even free lance type assignments from multiple companies, not one job with one company for your working life.

One could quibble and suggest that by assuming, not questioning, that there is a continuing role for unions that Stern may not be really getting to the ultimate core of the issue. That could well be merely semantics and saying it that bluntly could hardly be expected of someone who has spent his life in the organized labor movement.

Stern hopes to find a spot at a university or other organization to think about things that he didn't have time to do as he was meeting the daily duties of running a large organization.

It will be interesting to see what thoughts and/or actions emanate from Stern's reflections. The common wisdom would be that whatever it is, it will be strenuously opposed by the business community. But his underlying point is a good one:

 If you want to have a middle class in America there has to be some way for workers to share in the gains, not just share in the pain.

While it might well be that I would disagree with the conclusions that Stern, and whatever group he gathers arounds him, reaches, I am glad to see someone with his experience embarking on the journey.

He has posed the right question.  I wish him well.

First Employment Law Test for Justice Steven's Replacement: Figuring Out the Cat's Paw

Assuming that notwithstanding the current posturing, come the first October in 2010 there is a replacement for Justice Stevens, one of their first tests may be helping to define the parameters of the Cat's Paw theory in discrimination cases. An issue that has been lurking around the Supreme Court agenda for awhile. See my earlier post, 5th Circuit Panel Looks At Cat's Paw Theory .

As is almost always the case, the first to bring it to my attention is Ross Runkel at his LawMemo Employment Law Blog, SCOTUS will review "cat's paw" case. The issue in the 7th Circuit case of Staub v. Proctor Hospital(3/25/09):

In what circumstances may an employer be held liable based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision?

A couple of quick points. The underlying cause of action is USERRA which is not a statute that often comes under Supreme Court review. Since the Cat's Paw theory is more general in nature, I don't think that means we will necessarily get much insight into how the Supreme Court views USERRA. However, given the group that it protects, one would expect most courts to give it as pro-employee favorable view as any statute.
And one of the frequently mentioned candidates for the Supreme Court position is Judge Diane Wood of the 7th Circuit. She was not on the panel that decided Staub. It would be somewhat ironic if she were appointed and one of her first employment law cases as a Supreme Court Justice was reviewing the handiwork of her generally more conservative former peers.

Medical Marijuana: Accomodation Required? Which Way Do You Think Oregon Went?

Probably depends on how liberal you view Oregon. Since I have spent little time there (which will hopefully be somewhat ameliorated by a vacation week there in a couple of months) my guess is based more on perception than actual knowledge. If pushed, I would have guessed for a pro-employee outcome.

But I would have been wrong. In Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries (Oregon 4/14/10), the Oregon Supreme Court dealt with it succinctly:

The Oregon Medical Marijuana Act authorizes persons holding a registry identification card to use marijuana for medical purposes. ORS 475.306(1). It also exempts those persons from state criminal liability for manufacturing, delivering, and possessing marijuana, provided that certain conditions are met. ORS 475.309(1). The Federal Controlled Substances Act, 21 USC § 801 et seq., prohibits the manufacture, distribution, dispensation, and possession of marijuana even when state law authorizes its use to treat medical conditions. Gonzales v. Raich, 545 US 1, 29, 125 S Ct 2195, 162 L Ed 2d 1 (2005); see United States v. Oakland Cannabis Buyers' Cooperative, 532 US 483, 486, 121 S Ct 1711, 149 L Ed 2d 722 (2001) (holding that there is no medical necessity exception to the federal prohibition against manufacturing and distributing marijuana).

The question that this case poses is how those state and federal laws intersect in the context of an employment discrimination claim; specifically, employer argues that, because marijuana possession is unlawful under federal law, even when used for medical purposes, state law does not require an employer to accommodate an employee's use of marijuana to treat a disabling medical condition. ...We also hold that, under Oregon's employment discrimination laws, employer was not required to accommodate employee's use of medical marijuana. (emphasis added)(all interior cites removed)

It will be a long time before that question ever arises in Texas, but I have been surprised how many times it has come up for the employers that our firm represent in those states where some form of medical marijuana use is legal.

Given that legalization is on the ballot in California in November, see a summary of the proposal and get the actual text here,  this could become an even bigger issue.

Hat tip to the locals who called this to my attention, the folks at Stoel, Rives who not only posted about the result, Oregon Supreme Court: Employers Are Not Required to Accommodate Medical Marijuana, but filed an amicus brief on behalf of the Pacific Legal Foundation and the National Federation of Independent Business, and to  Ross Runkel, Professor of Law Emeritus at Willamette University College of Law (Salem, Oregon).