Nominee Ketanji Brown Jackson’s ADR Work

By Tamia Sutherland and Russ Bleemer

President Biden’s nominee to the U.S. Supreme Court, U.S. District of Columbia Circuit Court of Appeals Judge Ketanji Brown Jackson, is well acquainted with conflict resolution’s role in legal practice from her law firm days.

The 51-year-old was elevated just last June to the appeals court by Biden, but has been on the bench since 2013, serving as a U.S. District Court judge in Washington, D.C. She would be the first black woman Supreme Court justice if she is confirmed.

While her ADR-centric cases on the bench were few, Jackson–who clerked in 1999-2000 for Justice Stephen G. Breyer, whom she would replace, though she wasn’t at the Court for the justice’s seminal arbitration cases–has significant commercial conflict resolution work in her CV.

Most notably, while of counsel in the Washington office of Morrison & Foerster, Jackson did extensive work on the seminal case of Hall Street Associates LLC v. Mattel Inc., 552 U.S. 576 (2008) (available at http://bit.ly/38ELtSU), successfully preserving respondent Mattel’s arbitration award (pending additional court review) and standing for the proposition that the parties cannot expand the scope of review for an award because it is contrary to the Federal Arbitration Act’s mission.

Jackson’s MoFo litigation department work, on both the civil and criminal sides, was preceded by two years as an associate at one of the nation’s highest-profile commercial conflict resolution practices with mediator Kenneth Feinberg.  Jackson was an associate in Feinberg’s Washington firm, then known as the Feinberg Group, in 2002-2003, in the midst of Feinberg’s best-known case, when he served as special master of the September 11th Victim Compensation Fund of 2001. Congress established the fund to aid victims and survivors of the 9/11 attacks; the fund used mediation-style processes to reach out to potential claimants, and evaluated applications, determined appropriate compensation, and disseminated awards.

Judge Jackson described her work at the firm in her Senate Judiciary Committee Questionnaire for Judicial Nominees ahead of a hearing on her nomination last April:

While at the Feinberg Group, I assisted in the negotiated (non-litigation) resolution of mass tort claims. I attended arbitration proceedings and advised client corporations regarding trust payment structures for
resolving mass-tort liability, such as asbestos claims.

She noted later in her disclosure, “my typical clients were large corporations facing mass tort liability. I specialized in mediation and arbitration procedures and in the evaluation of trust structures for the settlement of current and potential (future) tort claims.” She noted that she did not appear in court while working at the firm.

“I recall quite well the superlative legal skills of Judge Jackson while a member of the Feinberg Group Law Firm,” notes Ken Feinberg in an email. He continues:

Ketanji was involved in a series of matters relating to ADR: asbestos mediation, Dow-Corning breast implants mediations and some work on the 9/11 Victim Compensation Fund. Quite apart from her obvious legal skills, she proved to be a creative lawyer looking for paths to resolve complex mass tort litigation outside of the conventional legal system. She quickly recognized that mediation, arbitration and negotiation were cost effective, efficient and an abbreviated way to “get to yes.”

Feinberg concludes, “It was clear to me some 20 years ago that she was destined for greatness.”

* * *

Jackson was confirmed to the D.C. Circuit Court by the Senate 53-44 on June 14. In a statement this morning, the White House noted that the president “sought a candidate with exceptional credentials, unimpeachable character, and unwavering dedication to the rule of law,” but also noted, in anticipation of a close confirmation vote, that “Judge Jackson has been confirmed by the Senate with votes from Republicans as well as Democrats three times.”

Senate Majority Leader Chuck Schumer, D., N.Y., told reporters Friday afternoon he will seek “a prompt hearing” by the Senate Judiciary Committee, to be followed quickly by Senate confirmation to the U.S. Supreme Court seat.

* * *

Judge Jackson further detailed her ADR work in her Senate Judiciary Committee questionnaire. She listed on her questionnaire the sole arbitration case for which she wrote an opinion, CEF Energia B.V. v. Italian Republic, No. 19-cv-3443 (KBJ) (D.D.C. Jul. 23, 2020).  In the case, Jackson granted Italy’s request to decline to confirm arbitration awards.  The two awards in favor of four energy companies against the Italian government were stayed in a Sweden court pending Italy’s challenge to the award, and the companies sought enforcement before Judge Jackson.

Jackson conducted an analysis of the power to stay proceedings in the United States while a foreign arbitral matter is continuing under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, best known as the New York Convention. 

Noting “the ongoing set-aside proceedings that are taking place in Sweden (the primary jurisdiction of the parties’ arbitrations) and the significant interests in judicial economy and international comity that weigh in favor of staying this case,” Jackson stayed the confirmation decision pending the outcome in Sweden.

She wrote that a federal district court “must recognize and enforce a foreign arbitral award ‘unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.’” 9 U.S.C. § 207. Furthermore, Jackson found that “a court ‘may refuse to enforce the award only on the grounds explicitly set forth in Article V of the Convention.’”

The applicable grounds for refusal Jackson highlighted from Article V of the New York Convention, were that the agreement is not valid if (1) “award …has been set aside or suspended by a competent authority of the country in which … that award was made[,]” or (2) recognition or enforcement… would be contrary to the public policy of that country. New York Convention Art. V(1)(e), Art. V(2)(b).

But Judge Jackson’s holding to stay the confirmation was supported by her findings that the interest of the judicial economy, and the test in Europcar Italia S.P.A. v. Maiellano Tours, 156 F.3d 310 (2d Cir. 1998), which she wrote weighed in favor of staying the case. Quoting Naegele v. Albers, 355 F. Supp.2d 129, 141 (D.D.C. 2005), Jackson stated that  “[l]itigating essentially the same issues in two separate forums is not in the interest of judicial economy or in the parties’ best interests.”

In concluding her point that the interest of the judicial economy weighed in favor of staying the case, she acknowledged the length of time that had elapsed and wrote:

This Court fully understands that Petitioners have been pursuing recompense from Italy since 2015 and that the resolution in the [Sweden] Court may take one to two more years. . . . But it is not at all clear that proceeding with the instant litigation will necessarily lead to a faster resolution of the complex issues that must be determined prior to enforcing the awards. …

Judge Jackson carefully analyzed each of the six Europcar factors in deciding whether to stay an action under Article VI of the New York Convention in relation to the CEF Energia B.V. facts, concluding that the Europcar factors weighed in favor of staying the case.

She also noted that the European litigation over the awards stemmed from the controversial European Court decision in Slovak Republic v. Achmea B.V., Case C-284/16 (2018) (available at https://bit.ly/2Kf8OmM), in which the court found that “intra-[European Union] treaty arbitration provisions are invalid to the extent that they prohibit judicial review of EU law by EU courts.” Achmea concerned cases under the Energy Charter Treaty—the treaty under which the CEF Energia B.V. arbitrations were conducted.

* * *

In addition to CEF Energia, B.V. v. Italian Republic, Judge Jackson had eight other arbitration-focused cases on her docket covering a range of arbitration issues. In Metropolitan Municipality of Lima v. Rutas De Lima S.A.C. Jackson presided over an issue regarding Federal Arbitration Act Section 10, where the city of Lima, Peru, petitioned and moved for an order vacating an arbitral award that was rendered in favor of the respondent, a contractor. The matter was reassigned to Judge Florence Y. Pan before Jackson could rule on the merits.  

The other cases mostly involved confirmation proceedings.

* * *

Here is how Judge Jackson described her work on Hall Street Associates from her Senate Judiciary questionnaire:

From 2007 to 2008, I was part of a litigation team that represented respondent Mattel in a Supreme Court case involving the section of the Federal Arbitration Act that grants expedited judicial review to confirm, vacate, or modify an arbitration award. I was responsible for reviewing the factual record related to the subject matter of the underlying arbitration, and I drafted parts of both the primary brief for respondent and two supplemental briefs on specified issues the Supreme Court ordered. I also assisted in the preparation of oral argument counsel. The Supreme Court ultimately agreed with Mattel’s argument that the Act’s grounds for vacatur and modification of arbitration awards are exclusive for parties seeking expedited review under the FAA, but remanded the case for a determination regarding whether the parties did, in fact, intend for the arbitration proceeding at issue to be governed by the FAA.

She listed the case as one the 10 most significant litigated matters she has worked on in her career on the Senate Judiciary questionnaire.

The case is often cited for limiting the ability of parties to contract for review of their arbitration awards, though it does not apply to arbitration awards written solely under state laws, where, at least theoretically, parties could contract for expanded review under some circumstances.

Hall Street Associates also left alive the judicial standard of “manifest disregard” of the law for overturning awards under FAA Section 10, which commentators have urged needs clarification.  See, e.g., Stuart M. Boyarsky, “The Uncertain Status of the Manifest Disregard Standard One Decade after Hall Street,” 123 Dick. L. Rev. 167 (2018) (available at https://bit.ly/3slmLTk), and Michael H. LeRoy, “Are Arbitrators Above the Law? The ‘Manifest Disregard of the Law’ Standard,” 52 B.C. L.Rev. 137 (2011) (available at https://bit.ly/3ImK05i).  

The 116-page Senate Judiciary Questionnaire prepared by Judge Jackson containing descriptions of her professional work and education history can be found at https://bit.ly/35vbFSJ.

* * *

Sutherland, a second-year law student at the Howard University School of Law, in Washington, D.C., is a CPR 2021-22 intern. Bleemer edits Alternatives to the High Cost of Litigation for CPR.

[END]

Senate Sends Bill Restricting Arbitration for Workplace Sexual Assault Victims for Biden’s Signature

By Tamia Sutherland & Russ Bleemer

The U.S. Senate passed H.R. 4445, Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, this morning on a voice vote.

The bill had bipartisan support in both legislative chambers and quickly cleared the 60-vote procedural step to advance in the Senate. The House had passed the bill on Monday by a vote of 335-97.

President Biden has signaled he will sign the bill, which will take effect immediately. The Office of Management and Budget expressed the administration’s support in a Statement of Administration Policy letter, published Feb. 1, noting, “This bipartisan, bicameral legislation empowers survivors of sexual assault and sexual harassment by giving them a choice to go to court instead of being forced into arbitration.”

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act invalidates pre-dispute arbitration agreements and waivers of joint proceedings for individuals alleging conduct constituting a sexual harassment dispute or sexual assault. It effectively overrides employment contracts that require arbitration and allows all cases which include sexual assault or harassment claims to be resolved in court, despite the signed agreement containing an arbitration clause.

The language targets predispute arbitration agreements and predispute joint-action waivers, but not ad hoc or post-dispute processes. In fact, the law apparently allows employees an option to stay in existing arbitration agreements, noting at the outset that an arbitration clause will not be valid “at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct. . . .” The law focuses on the filing of cases; a determination of the arbitrability of matters is sent by the law to courts, not arbitrators. . . .”

In introducing the bill this morning, Senate Majority Leader Charles Schumer, D., N.Y., noted the bipartisan agreement on the bill, and emphasized that it will apply retroactively.  The law states that it “shall apply with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act.” Said Schumer, “That’s an important point that hasn’t gotten enough attention.”

The text of the bill is available here.

Arbitration clauses in employment contracts have been characterized by legislators as “forced” and were discussed in depth at the Nov. 16 House Judiciary hearing, “Silenced: How Forced Arbitration Keeps Victims of Sexual Violence and Sexual Harassment in the Shadows.” A blog post about the Nov. 16 hearing can be accessed here, and the hearing can be viewed in its entirety at https://bit.ly/3wTDLkf.

Some legislators and attorneys were worried that the proposed reforms could unwittingly fail in practice. There is concern because litigation can be more expensive; the bill does not prevent companies from forcing people to sign nondisclosure agreements that also could hide sexual misconduct allegations, and plaintiffs’ attorneys could be incentivized to include sexual harassment allegations in cases that have nothing to do with sexual harassment to evade arbitration.

“Unfortunately, some of the language in the statute is potentially ambiguous,” says Christopher C. Murray, a shareholder in the Indianapolis office of Ogletree, Deakins, Nash, Smoak & Stewart, and co-chair of the firm’s Arbitration and Alternative Dispute Resolution Practice Group. He explains:

Specifically, the statute bars enforcement of certain arbitration agreements with respect to “cases” relating to sexual harassment and sexual assault disputes.  The statute probably should state it bars enforcement of agreements with respect to ‘claims’ relating to sexual harassment and sexual assault disputes. Some plaintiffs’ counsel may try to make hay out of this ambiguous use of ‘cases’ and seek to expand the scope of the statute to bar the arbitration of other types of claims that happen to be in the same case. I expect that effort by plaintiffs’ counsel will ultimately be unsuccessful under cases like CompuCredit Corp. v. Greenwood, but the ambiguity may still result in some extra litigation in the short term. . There’s no indication the new law is intended to change the “Congressional command” analysis for claims under other federal statutes that have nothing to do with a sexual harassment or sexual assault dispute.

In CompuCredit Corp. v. Greenwood, 565 U.S. 95 (2012), the Supreme Court held that because the Credit Repair Organizations Act is silent on whether claims can be arbitrated, the Federal Arbitration Act required the plaintiff’s arbitration agreement to be enforced according to its terms. Moreover, the case stands for the proposition that an arbitration agreement should be enforced if the claims at issue are federal statutory claims, unless the mandate of the Federal Arbitration Act, 9 U.S.C. § 1, et seq., has been overridden by a contrary Congressional command. Parties likely will dispute whether the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which specifically amends the FAA, changes that analysis in any way for claims under federal statutes that do not relate to sexual harassment or assault.

* * *

The Senate also was concerned about the misuse of sexual assault and harassment claims to piggyback arbitrable claims into court, and this morning addressed the issue. 

Sen. Joni Ernst, R., Iowa, emphasized that the act should not be used for other workplace disputes. “Those claims are meaningfully different,” she said, emphasizing that if an employment agreement has a predispute arbitration provision and a sexual assault or harassment claim is brought with another claim, and the assault or harassment claim is later dismissed, “the court should remand the other claim back to the arbitration” system.

Ernst told the Senate that the presence of sexual assault or harassment claims “should not effectively destroy arbitration in employment litigation.”

Ernst pledged to work with Schumer and other senators, she said, “if there are indications that there is gaming of the system” by claimants or lawyers.

Sponsor Kirsten Gillibrand, D., N.Y., expressed appreciation for work on the bill by Ernst and Sen. Lindsey Graham, R., S.C., and agreed with Ernst’s cautions. “I do not believe that survivors of sexual assault and harassment will use the claims” to avoid arbitration, she said, adding, “If those claims on assault or harassment are dismissed, [victim claimants] will go back to arbitration.”

“But,” continued Gillibrand, “it is important that all claims related to assault or harassment are dealt with at the same time” to avoid sending victims to multiple forums. “If victims and attorneys break those rules, they can be sanctioned in court,” she said.

Ahead of the voice vote, Lindsey Graham said, “It does not hurt business to make sure that people harassed in the workplace [get justice]. It helps business.  . . . Arbitration has its place in business.  . . . [But] you’re not going to sign away your life.”

He concluded, “This is not bad for business. This is good for America.”

* * *

The passing of the Ending Forced Arbitration Act marks a significant national reform in the fight against sexual misconduct in the workplace that emerged from the bravery of the #MeToo movement.  It also may be a harbinger of more to come in terms of arbitration restrictions. The White House statement supporting the legislation, which now goes to the president’s desk to be signed into law, ended by noting,

The Administration also looks forward to working with the Congress on broader legislation that addresses these issues as well as other forced arbitration matters, including arbitration of claims regarding discrimination on the basis of race, wage theft, and unfair labor practices.

* * *

Sutherland, a second-year law student at the Howard University School of Law, in Washington, D.C., is a CPR 2021-22 intern.  Bleemer edits Alternatives to the High Cost of Litigation for CPR.

[END]

House Subcommittee Introduces Bill that Would Restrict Arbitration

By Tamia Sutherland

The House Committee on Education and Labor’s Subcommittee on Health, Employment, Labor, and Pensions held a Nov. 4 hearing on employment arbitration to introduce the “Restoring Justice for Workers Act.” The meeting and bill was presented by House Education and Labor Committee Chairman Bobby Scott, D., Va., and House Judiciary Committee Chairman Jerrold Nadler, D., N.Y.

The text of the Restoring Justice for Workers Act is available here. The act would

  • prohibit pre-dispute arbitration agreements that require arbitration of work disputes;
  • prohibit retaliation against workers for refusing to arbitrate work disputes;
  • provide protections to ensure that post-dispute arbitration agreements are truly voluntary and with the informed consent of workers;
  • amend the National Labor Relations Act to prohibit agreements and practices that interfere with employees’ right to engage in concerted activity regarding work disputes, and
  • reverse the U.S. Supreme Court’s 5-4 decision in Epic Systems Corp. v Lewis, available here. (Earlier this week, the Court agreed to hear a case that could clarify the extent of the seminal case’s application. For more, see Mark Kantor, “U.S. Supreme Court Adds an Arbitration Issue: Is Proof of Prejudice Needed to Defeat a Motion to Compel?” CPR Speaks (Nov. 15) (available at https://bit.ly/3FnfyGd).

The subcommittee meeting, “Closing the Courthouse Doors: The Injustice of Forced Arbitration Agreements,” began with an opening statement from committee Chairman Mark DeSaulnier, D., Calif. Senior Georgia Republican committee  Rick W. Allan gave an opening statement, and then four witnesses provided testimony:

  1. Alexander Colvin, Dean of the School of Industrial and Labor Relations at Cornell University;
  2. Glenda Perez, Former Implementation Set-Up Representative at Cigna;
  3. G. Roger King, Senior Labor and Employment Counsel at the Arlington, Va.-based HR Policy Association, a nonprofit membership group of “over 390 large” corporations’ chief human resource officers; and
  4. Kalpana Kotagal, a Partner in Cohen Milstein Sellers & Toll’s Washington, D.C., office.

First, Chairman DeSaulnier began by introducing the topic of “forced arbitration” agreements and collective action waivers, explaining that for many employees, employment documents “include an arbitration clause, hidden in the fine print,” which requires workers to sign the document or forgo employment.

Next, he provided data to support the assertion that the use of these agreements is widespread. He explained that “in 1990, 2.1% of non-union employees had an arbitration clause in their employment contracts . . . [and in] 2018, nearly 60% of all nonunionized private-sector employees were covered by forced arbitration agreements.”

Chairman DeSaulnier provided other examples of what he described as unfair practices and, finally, introduced the Restoring Justice for Workers Act as a solution.

Rep. Allan countered in his opening statement that the act is another instance of heavy-handed government reach that will be burdensome to employers and unfairly target job creators. Moreover, he asserted that the act would delay justice and continue to clog an already overrun court system.

Prof. Colvin, a longtime critic of mandatory arbitration processes, was the first witness to provide testimony. He provided statistics from his studies, cited at his link above, to show the increase use of arbitration, and how employees do worse in arbitration as opposed to the court. He also discussed how employees who use the arbitration process for the first time are at a structural disadvantage to companies who repeatedly use the process.

Next, Glenda Perez provided a personal account of her struggles with the arbitration process without a lawyer. Perez reported that she and her husband worked for Bloomfield, Conn.-based insurer Cigna from October 2013 to  July 2017. In April 2017, Cigna put her on a performance correction plan for work “errors” after meeting with her team on pharmacy benefits.

Her husband, a Cigna analyst, found evidence of errors by white women but none by his wife, according to Perez’s witness statement. She filed a discrimination complaint with Cigna’ human resources department. Typically, a full investigation takes 60 days, she reported, but in her statement, Perez said her investigation took one day, with human resources backing her manager’s claim. Two months later, she was fired.

Perez wanted to file a claim for discrimination and retaliation, but could not find an attorney to represent her in mandatory arbitration. She said she was forced to drive to a law library to do research while also taking care of her three children and looking for a new job. She claimed it took several months to choose an arbitrator.

Moreover, Perez reported, the arbitrator selected may have had a conflict of interest that was not disclosed. Perez’s testimony focused on arbitrator’s lack of impartiality. She reported that there are photos online of the arbitrator, and Cigna’s attorney, at the arbitrator’s 50th birthday party, which she filed with her committee testimony. Additionally, she testified, the arbitrator formerly worked for the firm representing Cigna and had Cigna’s counsel as a reference on his CV.

The arbitrator denied Perez’s request for materials to prove her case as Cigna claimed it would cost more than $1 million to retrieve “even though,” she said, “I was only requesting my employee personal profile.” Cigna moved for summary judgment, and then the arbitrator ruled in favor of Cigna, and canceled a hearing that had been scheduled. When Perez filed a motion to vacate the decision in court, she said Cigna fired her husband.

HR Policy Association attorney Roger King said that two of the legislation’s primary objectives are big mistakes and are a substantial overreach of congressional action. He explained that completely eliminating pre-dispute arbitration was a mistake, and a total prohibition on class-action waivers would be burdensome. Also, in response to Glenda Perez’s testimony, he asserted that generally, arbitrators are ethical.

Finally, Kalpana Kotagal testified that the justification for forced arbitration is predicated on myths because (1) there is no equal bargaining power in most forced arbitrations, (2) it burdens those who are already marginalized, (3) it is not speedy, and (4) it deters workers from bringing claims.

The meeting concluded with a Q&A from other committee members.

* * *

A video of the hearing, and witness statements, is available here. The Congressional repository page for the event can be found here.

* * *

The author, a second-year law student at the Howard University School of Law in Washington, D.C., is a CPR 2021 Fall Intern.

[END]

House Passes ‘PRO’ Act, Which Includes Arbitration Restrictions

By Mark Kantor

Yesterday, the proposed Protecting the Right to Organize Act (PRO Act) passed the U.S. House of Representatives by a 225-206 vote, with five Republicans voting Yay and one Democrat voting Nay.  The bill was sent to the U.S. Senate for consideration. 

While much arbitration-related attention in the new Congress has focused on the arbitration-only FAIR Act (for details and links, see Mark Kantor, “House Reintroduces a Proposal to Restrict Arbitration at a ‘Justice Restored’ Hearing,” CPR Speaks (Feb. 12) (available at http://bit.ly/3rze7y1)), the PRO Act contains significant provisions that, if finally enacted, would limit employment arbitration.

Most important, the PRO Act would make it an unfair labor practice for an employer to prevent employees requiring arbitration agreements that obligate an employee “not to pursue, bring, join, litigate, or support any kind of joint, class, or collective claim arising from or relating to the employment of such employee in any forum that, but for such agreement, is of competent jurisdiction.” 

Note that the coverage of the proposed PRO Act encompasses both employment contracts of adhesion and individually negotiated employment contracts, as well as covering individual independent contractors.  See Section 101(b) of the legislation at the act’s link above.

Section 104 of the PRO Act would override Epic Systems v. Lewis,138 S. Ct. 1612 (May 21)(available at https://bit.ly/2rWzAE8), with respect to employment arbitration and class proceedings. 

According to the accompanying section-by-section analysis released by the House, “ . . .  on May 21, 2018, the Supreme Court held in Epic Systems Corp. v. Lewis that … employers may force workers into signing arbitration agreements that waive the right to pursue work-related litigation jointly, collectively or in a class action. This section overturns that decision by explicitly stating that employers may not require employees to waive their right to collective and class action litigation, without regard to union status.”  (The analysis is available at https://bit.ly/2OGrKNj).

The ultimate Senate fate of the PRO Act is linked to the fate of the filibuster.  As Politico states:

But the Protecting the Right to Organize Act, which advanced mostly along party lines, is unlikely to win the 60 votes needed for passage in the narrowly controlled Senate. And already, some union leaders — who hold outsize sway in the Biden administration — are amping up pressure on Democrats to eliminate the filibuster so they can see one of their top priorities enacted.

Eleanor Mueller and Sarah Ferris, “House passes labor overhaul, pitting unions against the filibuster,” Politico (March 9) (available at http://politi.co/3vbgFEu). For the latest on the limited prospects for overturning the filibuster in the Senate, see Burgess Everett, “Anti-filibuster liberals face a Senate math problem,” Politico (March 9) (available at http://politi.co/2ObVou0). 

The filibuster affects large swaths of proposed legislation coming out of the House of Representatives and the Biden Administration agenda. We can anticipate daily media attention to every word any member of Congress or the administration speaks about the topic for some time to come.

The operative PRO Act text in Sec. 104 overriding Epic Systems reads as follows:

(e) Notwithstanding chapter 1 of title 9, United States Code (commonly known as the ‘Federal Arbitration Act’), or any other provision of law, it shall be an unfair labor practice under subsection (a)(1) for any employer—

“(1) to enter into or attempt to enforce any agreement, express or implied, whereby prior to a dispute to which the agreement applies, an employee undertakes or promises not to pursue, bring, join, litigate, or support any kind of joint, class, or collective claim arising from or relating to the employment of such employee in any forum that, but for such agreement, is of competent jurisdiction;

“(2) to coerce an employee into undertaking or promising not to pursue, bring, join, litigate, or support any kind of joint, class, or collective claim arising from or relating to the employment of such employee; or

“(3) to retaliate or threaten to retaliate against an employee for refusing to undertake or promise not to pursue, bring, join, litigate, or support any kind of joint, class, or collective claim arising from or relating to the employment of such employee: Provided, That any agreement that violates this subsection or results from a violation of this subsection shall be to such extent unenforceable and void: Provided further, That this subsection shall not apply to any agreement embodied in or expressly permitted by a contract between an employer and a labor organization.”;

Also, according to the proposal’s section-by-section analysis, PRO Act Section 109(c) would create a private right of action in U.S. federal court if the NLRB fails to pursue a retaliation claim.

(c) Private right to civil action.  If the NLRB does not seek an injunction to protect an employee within 60 days of filing a charge for retaliation against the employee’s right to join a union or engage in protected activity, that employee may bring a  civil  action  in  federal  district  court. The  district  court  may  award  relief  available  to employees who file a charge before the NLRB.

Yesterday’s hearings have gone viral via fiery words backing the act’s passage by Tim Ryan, D., Ohio, who chided Republicans for failing to support workers.  “Heaven forbid we pass something that’s going to help the damn workers in the United States of America!” shouted Ryan in the House chambers, adding, “Heaven forbid we tilt the balance that has been going in the wrong direction for 50 years!”

Republican opponents immediately fired back, saying that the bill would hurt workers by hurting business and the economy. For details, see Katie Shepherd, “Tim Ryan berates GOP over labor bill: ‘Stop talking about Dr. Seuss and start working with us,’” Washington Post (March 10) (available at http://wapo.st/3bz2YaF).

* * *

Mark Kantor is a member of CPR-DR’s Panels of Distinguished Neutrals. Until he retired from Milbank, Tweed, Hadley & McCloy, he was a partner in the firm’s Corporate and Project Finance Groups. He currently serves as an arbitrator and mediator. He teaches as an Adjunct Professor at the Georgetown University Law Center (Recipient, Fahy Award for Outstanding Adjunct Professor). He also is Editor-in-Chief of the online journal Transnational Dispute Management. He is a frequent contributor to CPR Speaks, and this post originally was circulated to a private list serv and adapted with the author’s permission. Alternatives editor Russ Bleemer contributed to the research.

[END]

Roundup: Legislation with Mediation or Arbitration…Maybe for the future?

By Elena Gurevich

According to Congress.gov, the official website for U.S. federal legislative information, and Govtrack.us, an organization that tracks legislation and votes, several bills have been introduced in the U.S. House of Representatives and the Senate this year that touch upon arbitration or mediation.

Out of five bills introduced, only one deals with mediation as well as arbitration. Although (according to Govtrack) it is highly unlikely that these bills will be passed by the present Congress, they might get a shot in the future under a different Congress.

H.R. 156—Labor Relations First Contract Negotiations Act of 2017. The bill, introduced on Jan. 3 by Rep. Gene Green, D., Texas, has a prognosis of passage of 1%, according to Govtrack, whose projection estimates are supplied by Skopos Labs, a New York software company. The bill amends the National Labor Relations Act to address initial contract negotiation. Specifically, the bill requires mediation if an employer and a newly certified union have not reached a collective bargaining agreement within 60 days. “Either the employer or the union may request binding arbitration if the parties have not reached an agreement within 30 days of selecting a mediator.”

See https://www.congress.gov/bill/115th-congress/house-bill/156.

H.R. 832—Arbitration Transparency Act of 2017, with a 3% chance of passage, requires that an arbitration proceeding between a consumer and a financial institution, in a dispute involving a consumer financial product or service, must be open to the public. It was introduced Feb. 2 by Rep. Michael Capuano, D., Mass.

See: https://www.congress.gov/bill/115th-congress/house-bill/832?r=10

H.R. 1374—Arbitration Fairness Act of 2017 was introduced on March 7. The bill prohibits a predispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute. The bill, sponsored by Rep. Hank Johnson, D., Ga., has a 3% chance of passing, according to Govtrack.

See: https://www.congress.gov/bill/115th-congress/house-bill/1374?r=7

  1. 542—Safety Over Arbitration Act of 2017 was introduced on March 7, with a current prognosis of 9%. The Congress.gov summary says the bill “prohibits the use of arbitration whenever a contract between an individual and another party requires arbitration to resolve a claim or controversy alleging facts relevant to a hazard to public health or safety unless all parties to the controversy consent in writing after the controversy arises.” The sponsor is Sheldon Whitehouse, D., R.I.

See: https://www.congress.gov/bill/115th-congress/senate-bill/542?r=22

  1. 647—Mandatory Arbitration Transparency Act of 2017. The bill has only a 2% chance of passing in this Congress, according Govtrack and Skopos Labs. The bill amends U.S.C. Title 9 on arbitration. According to the Congress.gov summary, the bill “prohibits predispute arbitration agreements from containing a confidentiality clause regarding an employment, consumer, or civil rights dispute that could be interpreted to prohibit a party from: (1) making a communication in a manner such that the prohibition would violate a whistle-blower statute; or (2) reporting or making a communication about tortious conduct, unlawful conduct, or issues of public policy or public concern. But the prohibition shall not apply if a party can demonstrate a confidentiality interest that significantly outweighs the private and public interest in disclosure.” Richard Blumenthal, D., Conn., is the sponsor.

See: https://www.congress.gov/bill/115th-congress/senate-bill/647

* * *

The author is a CPR Institute 2017 Fall Intern.

Congress Responds Rapidly to Block CFPB Rule Banning Mandatory Arbitration Clauses

On Monday, July 10, the Consumer Financial Protection Bureau announced its new rule preventing banks and credit card companies from using mandatory arbitration clauses in new customer accounts.

On Tuesday, July 11, and as predicted on “CPR Speaks,” Congress moved to stop the CFPB final rule. Arkansas Republican Sen. Tom Cotton announced he was drafting a resolution to get the new CFPB rule rescinded using the Congressional Review Act. Pennsylvania Republican Sen. Pat Toomey, Chair of the Subcommittee on Financial Institutions and Consumer Protection, is reported to be considering a similar step.

The newly popular 1996 Congressional Review Act—see the “CPR Speaks” link above–provides expedited  procedures through which the Senate may overrule regulations issued by federal agencies by enacting a joint resolution.

Characterizing the CFPB as having gone “rogue,” and its new rule as an “anti-business regulation,” Cotton is stressing the benefits of arbitration, as well as consumers’ capacity to make business decisions.

Financial Services Committee Chairman Jeb Hensarling, R., Texas, is also publicly criticizing the rule as bureaucratic and beneficial only to class action trial attorneys. He is urging Congress to work with President Trump to reform the CFPB and excessive administration by government. As also mentioned in yesterday’s post, in April Hensarling proposed H.R. 10, the Financial CHOICE Act of 2017, which would repeal the CFPB’s authority to restrict arbitration. The bill has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.

It remains to be seen whether the CFPB’s new rule will survive these and other potential congressional and court challenges. Much will depend upon the Senate and how many Republicans switch sides on this issue. Please stay tuned to this space for important developments.