Class Action Defeated by Labor Agreement

Corbett Gordon

 

This case is significant for employers in that it will not allow a plaintiffs’ attorney to aggregate employees who are subject to an arbitration agreement into a class action arbitration where the arbitration agreement is silent on the issue of class arbitration. The Garda employees – Lawrence Hill, Adam Wise, and Robert Miller – filed their case as a class action for wages under state law on behalf of themselves and other similarly situated armored car crews. The court held that the employees, who were subject to grievance and binding arbitration procedures under their union contract, had waived their right to pursue their wage claims in state court by operation of language in the collective bargaining agreement that gave exclusive adjudication of “a legitimate controversy, claim or dispute by an employee… covering rates of pay, entitlement to compensation… or any claim under any federal, state or local law, statute or regulation… related to the employment relationship” to the union grievance and arbitration procedure.

The Court of Appeals agreed with Garda that, because the issues raised are within the exclusive provisions of union arbitration, only a labor arbitrator can determine whether this case could proceed as a class action under this collective bargaining agreement. Having said that, and in reliance on a recent U.S. Supreme Court case decided under § 10(b) of the Federal Arbitration Act, the Court of Appeals remanded the case for individual arbitrations on the grounds that a contract that is silent as to the application of class arbitration lacks the requisite intent and, therefore, does not permit class arbitration.

Corbett Gordon is founder of and senior counsel in the Northwest regional office of Fisher & Phillips LLP.

For more coverage of regulatory decisions that are impacting the local business community, check out the Vancouver Business Journal’s first exclusively law-focused edition publishing on Friday, August 31.

Comments

comments