Jock v. Sterling Jewelers Inc.
2011 U.S. App. LEXIS 13633
| 2d Cir. | 2011Background
- In May 2005, Jock filed a Title VII and Equal Pay Act discrimination charge against Sterling Jewelers.
- Eighteen additional female employees joined with similar claims, initiating RESOLVE ADR procedures mandated by their contracts.
- RESOLVE comprises three steps: complaint to Sterling, mediation/panel review, then AAA arbitration if unresolved.
- January 2008 EEOC determination found reasonable cause of sex discrimination, noting pay/promotion disparities favoring men.
- March 2008 plaintiffs filed a class action in SDNY and a parallel AAA arbitration; EEOC pursued a separate action in Western District of New York.
- June 2008 the district court stayed litigation and referred to arbitration; June 2009 arbitrator held RESOLVE did not prohibit class arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to decide class arbitration under RESOLVE | Jock: RESOLVE permits class arbitration. | Sterling: RESOLVE does not permit class arbitration; silent clause cannot imply consent. | Arbitrator acted within authority; district court erred in vacating. |
| Effect of Stolt-Nielsen on vacatur standard | Arbitrator correctly analyzed contract to permit class relief. | Stolt-Nielsen limits arbitrator's power when clause is silent on class arbitration. | District court misapplied Stolt-Nielsen; vacatur inappropriate. |
| Whether FAA governs over state law implications | FAA requires deference to arbitrator's interpretation within authority. | State law (Ohio) controls interpretation of contract terms about class arbitration. | FAA principles control; arbitrator's Ohio-law analysis within authority. |
| Whether district court could substitute its view for arbitrator's | Arbitrator's decision should stand if within her authorized scope. | District court properly evaluated record for implicit agreement to class arbitration. | District court erred; review deferential and did not show excess of powers. |
Key Cases Cited
- Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 130 S. Ct. 1758 (2010) (silence on class arbitration cannot imply consent; arbitrator must follow contract/governing law)
- ReliaStar Life Ins. Co. v. EMC Nat’l Life Co., 564 F.3d 81 (2d Cir. 2009) (narrow reading of 10(a)(4); review of arbitral authority, not correctness)
- Westerbeke Corp. v. Daihatsu Motor Co., 304 F.3d 200 (2d Cir. 2002) (vacatur for manifest disregard; distinction between exceeding authority and legal error)
- DiRussa v. Dean Witter Reynolds Inc., 121 F.3d 824 (2d Cir. 1997) (arbitrator authority scope; reviewing errors of law within authority)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (FAA preempts state-law barriers to arbitration; class-action concerns under FAA)