Presenting a live 90 ‐ minute webinar with interactive Q&A Structuring Employment Arbitration Agreements and Class Action Waivers After American Express and Oxford Health THURS DAY, AUGUS T 15, 2013 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific T d Today’s faculty features: ’ f l f Henry D. Lederman, S hareholder, Littler , Walnut Creek, Calif. hareholder, Littler , Los Angeles William J. Emanuel, S The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Arbitration Agreements After Italian Colors and Oxford Health Presented by: Henry D. Lederman William J. Emanuel Littler Mendelson P.C. Littler Mendelson P.C. Treat Towers 2049 Century Park East 1255 Treat Blvd Suite 600 1255 Treat Blvd, Suite 600 5th Floor 5th Floor Walnut Creek, CA 94597 Los Angeles, CA 90067 925-932-2468 310-553-0308 hlederman@littler.com wemanuel@littler.com
Precursors: The Supreme Court Has Spoken – Arbitration Agreements Must Be Enforced As Written Arbitration Agreements Must Be Enforced As Written • AT&T Mobility LLC v. Concepcion , , y p 131 S.Ct. 1740 (2011) • CompuCredit Corp. v. Greenwood , 132 S.Ct. 665 (2012) • Marmet Health Care Center, Inc. v. Brown , 132 S.Ct. 1201 (2012) Bro n 132 S Ct 1201 (2012) • Nitro-Lift Technologies, LLC. V. Howard , 133 S Ct 500 (2012) S.Ct. 500 (2012) 6
AT&T Mobility v. Concepcion • The Federal Arbitration Act prohibits States from p conditioning the enforceability of arbitration agreements on the availability of class-wide arbitration procedures. 7
AT&T Mobility v. Concepcion • Thus, a California court-made rule limiting the , g enforcement of class action waivers in a consumer arbitration agreement “stands as an obstacle to the accomplishment and execution of the full purposes and accomplishment and execution of the full purposes and objectives of Congress” and is preempted by the FAA. 8
After Concepcion • Concepcion has been repeatedly p y p applied in the employment context and has been cited dozens of times in various court opinions and orders. p – Also, the Supreme Court vacated Sonic Calabasas A, Inc. v. Moreno 51 Cal 4th 659 (2011) Moreno , 51 Cal. 4th 659 (2011), which refused to enforce an employment arbitration agreement and remanded the agreement, and remanded the case for further consideration in light of Concepcion . 9
CompuCredit Corp. v. Greenwood, 132 S Ct 665 ( 2012) 132 S. Ct. 665 ( 2012) • The federal Credit Repair Organizations Act does not p g preclude enforcement of an arbitration agreement in a lawsuit alleging violations of that Act because the Act does not expressly provide that those claims may not be does not expressly provide that those claims may not be arbitrated. 10
CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012) 132 S Ct 665 (2012) • The FAA requires that the arbitration agreement be q g enforced as written absent an Act of Congress expressly stating otherwise. • Confirms primacy of the FAA’s objective to promote C fi i f th FAA’ bj ti t t alternative dispute resolution. 11
As for the State Courts, the U.S. Supreme Court’s Judicial Fuse is Getting Short Judicial Fuse is Getting Short • States may not rely on their “public policy” to preclude enforcement of arbitration agreements covered (and therefore protected) by the FAA. – Marmet Health Care Center, Inc. v. Brown , 132 S.Ct. 1201 (2012) • West Virginia Supreme Court: Based on state public policy, tort claims arising out of mistreatment of nursing home patients were not arbitrable. • U.S. Supreme Court: “When this Court has fulfilled its duty to interpret federal law a state court may not contradict or fail to interpret federal law, a state court may not contradict or fail to implement the rule so established.” – Nitro-Lift Technologies, LLC. V. Howard , 133 S.Ct. 500 (2012) • Oklahoma Supreme Court: An arbitration clause in an illegal • Oklahoma Supreme Court: An arbitration clause in an illegal non-competition agreement was not enforceable. • U.S. Supreme Court: Oklahoma “disregards this Court’s precedents on the FAA.” Court s precedents on the FAA. 12
But What About Federal Statutory Class Claims? Italian Colors Rest. v. Am. Express Travel Related Servs. Co. 667 F.3d 204, 217 (2d Cir. 2012) • Second Circuit held class action waiver in arbitration agreement unenforceable in an antitrust case. g • Distinguished Concepcion, which applied to a state contract law claim: “[O]ur holding rests squarely on a vindication of statutory rights.... statutory rights ” • Unavailability of class action makes cost of individual arbitration “prohibitive, effectively depriving plaintiffs of the statutory protections of the antitrust laws.” t t t t ti f th tit t l ” 13
Supreme Court Reverses on June 20, 2013 • [A]rbitration is a matter of contract. See Rent-A-Center, West, Inc. v. Jackson , 561 U. S. ___, ___ (2010) (slip op., at 3). And consistent with that text, courts must “rigorously enforce”arbitration agreements according to their terms, Dean Witter Reynolds Inc. v. Byrd , 470 U. S. 213, 221 (1985), d 470 U S 213 221 (1985) Witt R ld I B including terms that “specify with whom [the parties]choose to arbitrate their disputes,” Stolt-Nielsen , supra , at 683, and “the rules under which that arbitration will be conducted ” Volt rules under which that arbitration will be conducted, Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ ., 489 U. S. 468, 479 (1989). That holds true for claims that allege a violation of a federal statute, true for claims that allege a violation of a federal statute, unless the FAA’s mandate has been “‘overridden by a contrary congressional command.’” CompuCredit Corp. v. Greenwood , 565 U. S. ___, ___ (2012) (slip op., at 2–3) . . .. 14
“Effective Vindication” Argument Not Effective • But the fact that it is not worth the expense involved in p proving a statutory remedy does not constitute the elimination ofthe right to pursue that remedy. . . . The class action waiver merely limits arbitration to the two class-action waiver merely limits arbitration to the two contracting parties. It no more eliminates those parties’ right to pursue their statutory remedy than did federal law before its adoption of the class action for legal relief in f f f f 1938 . . .. Or, to put it differently, the individual suit that was considered adequate to assure “effective q vindication”of a federal right before adoption of class- action procedures did not suddenly become “ineffective vindication” upon their adoption vindication upon their adoption. 15
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