An hourly fuel tech and driver brought an action under the FLSA. The arbitrator concluded that the agreement allowed for a collective action, and the U.S. Fifth Circuit affirmed the District Court’s rejection of the defendant’s motion to vacate that determination:
The district court’s refusal to vacate the arbitrator’s award under Section 10(a)(4) of the Federal Arbitration Act is proper, the Court held, “if the award has some basis in the arbitration agreement. The correctness of the arbitrator’s interpretation is irrelevant so long as it was an interpretation.”
In this case, “the arbitrator pointed to the breadth of claims subject to arbitration – with few exceptions not applicable here, ‘any claim that could be asserted in court or before an administrative agency’ and ‘any controversy or claim’ arising out of the employment relationship fell within the agreement’s ambit. Likewise, the arbitrator noted that the agreement authorized arbitration of ‘all remedies which might be available in court.’ Finally, the arbitrator noted that the parties agreed that the American Arbitration Association (AAA) rules for employment disputes would govern arbitration. And those rules permit class proceedings.”
The Court then rejected the defendant’s argument that the issue of whether the arbitration agreement permits class proceedings “is a gateway issue for courts, not arbitrators, to decide” – absent clear and unmistakable language to the contrary. Initially, the Court notes that the arbitration agreement at issue appears to assign the question of class arbitrability to the arbitrator, rather than the court, overcoming the presumption. “But we ultimately need not reach the issue, because Sun Coast forfeited it. In fact, Sun Coast forfeited the issue, not once, but twice – first, by not presenting it to the arbitrator at all, and second, by not presenting it in a timely manner to the district court. First, Sun Coast joined Conrad in submitting the class arbitrability question to the arbitrator – and did not once suggest to the arbitrator that he had no authority to decide class arbitrability issues…. Moreover, in a subsequent scheduling order, the company again agreed ‘that the most efficient and expeditious use of time and resources is for the Arbitrator to first decide whether or not this arbitration may proceed as a collective action proceeding.’” The Court noted, among other things, that “Sun Coast provided the district court with a highlighted copy of Opalinski II. The highlighted portions cover the Third Circuit’s discussion of whether the arbitration agreement authorizes class arbitration – not the authority of the arbitrator to decide that issue, the issue decided in Opalinski I.”
Finally, the Court took the opportunity to address the defendant’s demand for oral argument: “Sun Coast’s motion misunderstands the federal appellate process in more ways than one. To begin, the motion claims that ‘oral argument is the norm rather than the exception.’ Not true. More than 80 percent of federal appeals are decided solely on the basis of written briefs. Less than a quarter of all appeals are decided following oral argument. In addition, Sun Coast suggests that deciding this case without oral argument would be ‘akin to … cafeteria justice.’ In this appeal, the panel unanimously agreed that the decisional process would not be meaningfully aided by oral argument. That should surprise no one, considering the one-sided language of the agreement, Sun Coast’s failure to preserve its argument before either the arbitrator or the district court, and its confusion on appeal between Opalinski I and Opalinski II. Arbitration has sometimes been criticized for favoring ‘powerful economic interests’ over those the interests harm. But another tactic powerful economic interests sometimes use against the less resourced is to increase litigation costs in an attempt to bully the opposing party into submission by war of attrition – for example, by filing a meritless appeal of an arbitration award won by the economically weaker party, and then maximizing the expense of litigating that appeal. Dispensing with oral argument where the panel unanimously agrees it is unnecessary, and where the case for affirmance is so clear, is not cafeteria justice – it is simply justice.”
Sun Coast Resources v. Conrad, 956 F.3d 335, 341 (5th Cir. 2020).
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