BREAKING NEWS: SECOND CIRCUIT ALLOWS CLASS ARBIRTATION OF EMPLOYMENT DISPUTE

The Second Circuit has just issued a ruling on the hot topic of whether or arbitration agreements can bar class actions.  In Jock v. Sterling Jewelers, Inc., the Second Circuit reversed a District Court decision which had reversed an arbitrator’s decision which allowed a class arbitration of an employment dispute.

The arbitration agreement submitted all matters to arbitration and did not expressly prohibit nor authorize class arbitrations.  The arbitrator found an implied agreement to arbitrate.  The District Court, relying on the U.S. Supreme Court’s ruling in Stolt-Nielsen S.A. v. AnimalFeeds International Corp. , __ U.S. __, 130 S. Ct. 1758 (2010),held that an agreement that does not expressly allow class arbitrations must be interpretted to prohibit them.

The Second Circuit disagreed.  It held that the arbitrator’s decision cannot be vacated simply because the District Court disagreed with its legal analysis.  Further, it held that Stolt-Nielsen did not hold that abitration agreements must expressly allow for class arbitrations in order for them to occur.  It held that an abitrator may find an implied agreement to arbitrate.

The take away for plaintiffs is that they should advance class arbitrations even if the agreement doesn’t expressly allow them.

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2 Comments

  1. Rob says:

    Richard, thanks for your diligence on overtime law. Because of your persistence and the resources I found on your site, myself and my fellow co-worker are on our way to having some serious meetings with our boss in regards to the fact that we are being treated as exempt, when clearly we are not.

    I’m gonna be a happy camper when I finally start getting treated fairly!

    Thanks!

    ctd1984@live.com

  2. George E. Bourguignon, Jr. says:

    It appears this is more about an implied agreement, what some may call waiver, than anything to do about arbitration agreements baring class actions.

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