Narrative Opinion Summary
This case involves a group of plaintiffs who brought a lawsuit against Sterling Jewelers, Inc., alleging sex discrimination in promotion and compensation practices. The plaintiffs sought arbitration under the 'RESOLVE' dispute resolution agreement, leading to a Class Determination Award by an arbitrator. The award certified a class for Title VII disparate impact claims for declaratory and injunctive relief but not for monetary damages. However, the arbitrator allowed class members to opt out of the relief, which Sterling contested, arguing that the arbitrator exceeded her authority by including class members who did not consent to arbitration. The court agreed with Sterling, finding that the arbitrator's decision to permit opt-outs from a Rule 23(b)(2) class violated established legal principles, as such classes are mandatory and do not allow opt-outs, according to Wal-Mart v. Dukes. The court vacated the arbitrator's award regarding the opt-out provision, citing a manifest disregard of law and lack of justification. The court confirmed the remainder of the arbitrator's award and instructed the closure of the docket number related to this issue.
Legal Issues Addressed
Arbitration Authority Under Federal Arbitration Actsubscribe to see similar legal issues
Application: The court evaluates whether the arbitrator exceeded her authority by certifying a class that included members who did not consent to arbitration.
Reasoning: Sterling is currently seeking to vacate the Arbitrator's Class Determination Award, contending that the Arbitrator lacked the power to include roughly 44,000 alleged class members who did not consent to join the arbitration, as only 254 plaintiffs had opted in.
Class Certification Under Rule 23(b)(2)subscribe to see similar legal issues
Application: The court determined that the arbitrator improperly certified an opt-out class for injunctive and declaratory relief, violating the mandatory nature of Rule 23(b)(2) classes.
Reasoning: The arbitrator improperly certified an opt-out class for injunctive and declaratory relief under Rule 23(b)(2). According to established law, as reiterated in Wal-Mart Stores, Inc. v. Dukes, Rule 23(b)(2) does not permit opt-outs for class members.
Deference to Arbitrators in Class Determinationsubscribe to see similar legal issues
Application: The court emphasizes that while arbitrators are given significant deference, there are limits, particularly when an arbitrator's decision lacks a minimally acceptable rationale or disregards established law.
Reasoning: The Court sustains its decision to vacate the Arbitrator's class determination award allowing opt-outs, citing the Arbitrator's manifest disregard of law and the lack of 'barely colorable justification' for the ruling.
Manifest Disregard of Lawsubscribe to see similar legal issues
Application: The court vacated the arbitrator's decision to allow opt-outs from a class seeking injunctive relief, citing a manifest disregard of the well-established legal principle prohibiting opt-outs in Rule 23(b)(2) classes.
Reasoning: The Arbitrator's decision to allow opt-outs from a class seeking such relief lacked a sufficient legal basis, constituting a failure to provide a 'barely colorable justification.' Additionally, the Arbitrator's ruling was made in 'manifest disregard of law.'