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Daniel C. Murray v. United Food and Commercial Workers International Union, Local 400 Donald Cash Christian Sauter
289 F.3d 297
4th Cir.
2002
Check Treatment
Docket

*3 TRAXLER, Before WILLIAMS and HOWARD, Judges, Circuit United States Judge District for the Eastern Carolina, District North sitting by designation.' by published Reversed and remanded opinion. Judge wrote TRAXLER majority opinion, Judge joined. Judge WILLIAMS HOWARD dissenting wrote a and concurring opinion. be deter- shall complaint process], OPINION through final and adjudicated mined and TRAXLER, Judge. Circuit single, arbitrator A arbitration. binding brought (“Murray”) Daniel C. strike by the alternate be chosen shall the Unit- employer, against his action provid- arbitrators a list method Union, Workers Food & Commercial ed President’s [Local WO] ed office. 400”), Cash (“Local and Donald Local 400 au- have the shall not Such arbitrator al- employee, (“Cash”), managerial a union alterfj change or diminish thority him against they discriminated leging that authority granted to or right any power, of Title race in violation the basis of on Lo- President of Acting President see Act Rights of the Civil VII *4 and conditions the terms cal 400 under (West &1994 §§ 2000e-2000e-17 U.S.C.A. of Local 400. Bylaws of (West § 1981 42 U.S.C.A. Supp.2001), and added). (emphasis J.A. his him from 1994), they terminated when alleged pen- a Murray also employment. 29, 1998, and Donald Local 400 On June against claim for law defamation dent state employ- his Murray that informed Cash director, organizing 400 and Local terminated 400 would be Local ment with (“Sauter”), arising from Sauter Christian 11, Murray returned 1998. July effective made defamatory statements alleged and, on July at Giant Food position his to The dis- Murray fired. after was Sauter Lo- 1998, against action 10, instituted to motion defendants’ granted court trict Title VII and and Cash under cal. Mur- of compel arbitration and to dismiss white 42-year-old a Murray, § 1981. claim, de- granted and ray’s discrimination Cash, 400 and male, Local alleged that Murray’s defa- dismiss motion to fendants’ American, “his terminated is African who Rule of to Federal mation claim pursuant his race even of on account employment 12(b)(6) to state for failure Procedure Civil employ- qualified he is though granted. relief could be upon a claim which plan to retain ment, ... defendants and remand. reverse and We American em- African similarly situated race.” J.A. 8. their of ployees because I. relief, Murray sought rein- Among other & Com- the United Food Local 400 of orga- a union position to his statement union is labor Union a mercial Workers damages. monetary nizer and 40,000 mem- approximately representing 1998, Murray amended September bers, retail employed are many of whom Sauter, Lo- to add Christian complaint his 1997, Murray February food stores. Director, as a defen- Organizing cal 400’s position absence from his took a leave of defamation a state law and dant asserted Inc., Food, and at Giant produce clerk Mur- Sauter. Local 400 and against claim orga- a union full-time as began working him after defamed alleged Sauter ray of 400. As condition nizer for Local position as a from his was terminated he 400, Murray was employment with by telling with Local organizer union containing sign required employees that Giant Food one or more clause: following J.A. good organizer.” “was employed are under Representatives All Bylaws of Local the terms of to dismiss a motion and filed Defendants ... of discrimination Any claims Murray’s discrimi- compel properly remedied ... not been ha[ve] claim, to dismiss ás well as motion nation 400’s discrimina- through internal [Local Murray’s defamation claim for failure to tration agreements upon the same footing ” Maryland contracts,’ state a for relief under claim as other Green Tree Fin. granted law. The district court Corp.-Alabama both mo- v. Randolph, 531 U.S. tions, (1) holding the discrimination (2000) 148 L.Ed.2d 373 (alteration subject claim agree- original) (quoting Gilmer v. ment between Local Murray, 400 and Lane Corp., 500 Interstate/Johnson (2) 20, 24, Sauter’s statements failed to state an 111 S.Ct. 114 L.Ed.2d 26 (1991)). actionable Mary- defamation claim under “Pursuant to th[is] liberal policy, land subsequently ‘any law. district court doubts concerning scope of arbi- Murray’s reconsider, denied motion to tral issues should be resolved in favor arbitration, parties proceeded problem whether the at hand discrimination claim. the construction of the lan contract guage itself allegation waiver, or an arbitration, At the conclusion of the sin- ” delay, or a like defense to arbitrability.’ gle arbitrator ruled favor of Local 400 O’Neil v. Hilton Head Hosp., 115 F.3d Cash, concluding had Cir.1997) 273-74 (quoting Moses failed prima to establish a facie case of Cone, 24-25, H. *5 and, event, unlawful discrimination in any parties When have entered into a valid and that Local 400 had legitimate articulated enforceable agreement to arbitrate their nondiscriminatory Murray’s reasons for disputes and dispute at issue with falls The discharge. district court then con- in scope of agreement, that the FAA firmed the award judg- and entered final requires federal stay judicial courts to pro ment. appeals now district ceedings, § see 9 U.S.C.A. compel and court’s grant of defendants’ motion to dis- arbitration in accordance agree with the miss compel and to his dis- of terms, § ment’s see 9 U.S.C.A. 4. claim, crimination as well as the district court’s dismissal of his defamation claim It is provisions settled that the 12(b)(6). under Rule FAA, policy and its favoring the reso arbitration, lution of through disputes ap

II. ply to employment agreements to arbitrate begin We with contention that brought claims pursuant discrimination the district court in granting erred statutes, federal including Title VII of the motion to dismiss and compel arbitra- Stores, Rights Civil Act. City See Circuit tion of his race discrimination claim Adams, 105, 109, Inc. v. 532 U.S. 121 S.Ct. brought under § Title VII and 1981 1302, (2001); 149 L.Ed.2d 234 Hooters of against Local 400 and Cash. Am., Inc. Phillips, 173 F.3d 937 (4th Cir.1999). Such an is en “

A. ‘[b]y forceable because agreeing to arbi The Federal claim, Arbitration Act trate a statutory a party does (West (“FAA”), 1999) §§ 9 U.S.C.A. 1-16 forgo the rights by substantive afforded represents “a policy statute; liberal federal favor only submits to their resolu ing agreements,” arbitral, H. in Moses judicial, rather than ” Cone Hosp. Hooters, Mem’l v. Mercury Constr. forum.’ 173 F.3d at (quot 937 1, 24, Corp., Gilmer, 460 103 ing S.Ct. 500 U.S. at “ (1983), L.Ed.2d 765 in order reverse If litigant ‘to “the prospective may effectively judicial the longstanding hostility arbi vindicate statutory his or her cause of agreements ... place forum,” and to arbi- action arbitral is claim B. subjected to arbitration appropriately at litigation. Green lieu mind, we principles With these (internal marks quotation a valid and question of whether to the turn omitted). alteration and agreement existed enforceable com Local 400 which Murray and

between well-estab strength of this his race discrimi Murray to submit pelled favoring the enforcement policy lished as arbitration. claim to nation however, agreements, clause, drafted valid that the arbitration serts Rather, courts inquiry. required not end our which he was does 400 and to by Local employment, whether of his upon to determine as a condition are called to accede it is one to be because at is and enforceable dispute not valid issue is particular so, Local 400. in favor of doing structurally biased through arbitration. resolved Murray points specifically, review to ensure More in a limited engage “we (1) sin “[a] that i.e., requirement dispute arbitrable — alter chosen shall be gle be to arbitrate exists valid of arbitra from list strike method nate the specific tween office”; the President’s provided by tors scope the substantive dispute falls within (2) that, event, arbitra any “[s]uch Hooters, 173 F.3d agreement.” [,] authority to alter have the shall not tor omitted). (internal quotation marks right or any power, change or diminish circumscribed,” “ju Although “highly ... of to the President authority granted solely on ... focused inquiry is not dicial terms and conditions 400 under the formation for contractual an examination J.A. 79. Local 400.” Bylaws of of mutual assent as lack defects such *6 claims, these together, Construed Rather, the Id. of consideration.” want grossly un agreement render the clauses parties that contemplates specifically FAA choice of by placing the fair and one-sided an revocation of arbitration may also seek in of Local exclusively the hands arbitrator as exist grounds “under ‘such agreement event, that, any in Local and providing 400 fraud, du including equity,’ at law or in result disregard can 400 Sydnor v. ress, unconscionability.” alter the the cannot arbitrator because F.3d Servicing Corp., 252 Fin. Conseco Local authority, under the 400 President’s Cir.2001) (4th 302, 9 U.S.C.A. (quoting 305 employment Bylaws, to “terminate course, arbi And, agreements § assign an at the end any [personnel] claims, statutory such trate federal of the Local in the interest or best ment VII, may be under Title pursued those J.A.126. Union.” litigant prospective if demon revoked “effectively ... vindi principles that cannot with the strates In accordance in statutory above, recog cause of action previously have cate his her outlined we 531 invalidation equity may require forum.” Green the arbitral nized that (internal 89, quotation is uncon agreement 513 at of an arbitration 305; omitted); at scionable, 252 F.3d Sydnor, Brad see and alteration marks cf. Inc., Hooters, well as an Sys., at Semiconductor F.3d v. Rockwell ford Cir.2001) (“[T]he an em agreement allows F.3d result, see ignore the arbitration particu ployer ... is whether inquiry crucial Stores, 148 City F.3d Johnson Circuit has an accessi adequate lar claimant O’Neil, (4th Cir.1998); 115 F.8d his to resolve forum ble substitute Hooters, we ”). Indeed, in revoked 274-75. statutory rights.... agreement plagued by an arbitration rules from punishing arbitrators who rule procedures which were “so one-sided against company by them removing only possible purpose that their [was] from the list. Given the unrestricted neutrality proceed- of the undermine control employer] [the has over the Hooters, ing.” 173 F.3d at 938. Among panel, the of an impartial selection deci- procedures, other the agreement unfair sion maker would be a surprising result. Hooters that Hooters provided and the And, Hooters, Id. at 939. inas the one- employee arbitrator, would each select an sided nature the arbitration agreement who in turn select the would third arbitra- is not employer limited providing But, tor. the employee’s arbitrator and itself with exclusive right to select the the third arbitrator were required to be potential list of arbitrators from selected which the from list of arbitrators created ultimate by Hooters. No decisionmaker will be exclusively limits were selected. placed put on whom Hooters unlikely could on the event hand-picked arbi- list, giving Hooters absolute control over against trator rules the lan- panel. selection of the entire See id. at guage of the in con- 938-39. a mechanism for selecting Such junction with the Bylaws, Union’s if even adjudicate an arbitration panel to the em- ultimately enforceable, might be con- claim, held, ployee’s statutory we was one by strued employee as prohibiting a “crafted to ensure a biased decisionmak- decision that would contravene the Presi- er.” Id. at 938. dent’s right to terminate employee case, any event.

In this we are presented with a quite choosing similar method for the deci- ' Although an will sionmaker. As a condition of employ- his not be invalidated for failure to “replicate ment, Murray required to enter into judicial forum,” id. at we again his drafted refuse to enforce an “utterly so prospective employer placed control lacking in the rudiments of even-handed- over the single selection ness,” By id. at 935. agreeing to arbitra- disputes employment the hands of tion in litigation, lieu of parties agree employer. ostensibly en- *7 procedures to “trade opportunity ‘the and in gage an alternate strike method to se- for review the courtroom of for the sim- lect single from a list of plicity, informality, expedition of arbi- arbitrators, prospective they but exercise ” Gilmer, tration.’ Id. at 936 (quoting these “from alternate strikes a list of arbi- at U.S. They do not provided by” trators Local 400 with abso- agree to forego right their to their have lutely specified no constraints. J.A. dispute fairly resolved an impartial respect, the selection method is party. that, third See id. at 941 (noting virtually indistinguishable from the one we although objections the fairness of an disapproved of Hooters: proceeding general arbitral be must employer] [The is free to devise lists of submitted to the arbitrator in the first partial existing arbitrators who have re- instance, may arbitration proceeding familial, lationships, financial or with be so party’s one favor skewed as to employer] management. [the and its fact, deny the other any “arbitration in prohibit rules do not even [the word”). employer] meaningful placing from its of the In such a managers sense ease, Further, themselves on the list. nothing is unconscionable in the rules restricts employer] [the one under the prospective litigant argues that Local 400 Additionally, statutory at 17. effectively vindicate cannot construe the not we should action. See Green cause of selected arbitrator denying the provision 89, 121 “alter[,] change or dimin- any authority C. authority granted right or any power, ish 400 under ... of Local to the President we 400 asserts that part, Local For its Bylaws of of conditions the terms and beyond language look should 400,” allowing to disre- Local J.A. clause, accept that arbitration because, the decision the arbitrator’s gard conducted before agreement was under the termi- discriminatory goes, a argument arbitrator, and trust fair and unbiased a as an action be construed nation could not way, the other gone decision that had the of’ Local “in the best interest taken right have not asserted Local 400 would J.A. 126. agree- Murray under to terminate de-We Bylaws. to its ment’s deference argument, in Local The flaw 400’s to do cline so. course, no reference to that there is is of court, 400 as- Before the district for the Resolution AAA National Rules list it did not maintain serted that any or to other disputes, Employment President’s office and that the arbitrators of an arbitra the selection governing rules a list of neu- have to obtain would instead of the arbi tor, language in the anywhere Arbi- the American tral arbitrators engendering no doubt agreement, tration Arbitration Labor Association’s in this case. and confusion uncertainty and Con- Federal Mediation Rules or the merely not Furthermore, is collective it does ciliation Service method; the se the selection silent as to employers. bargaining agreements with alternate by the is to be lection method proce- that this Murray pointed out When a list arbitrators method from strike in the col- selecting an arbitrator dure for by Local arbitrarily or created selected apply not context would bargaining lective employee. provided to and then cases, Local 400 employment in individual therefore, is little argument, Local 400’s request instead that it would argued then Local 400 than a claim that because more the American under a list of arbitrators arbitra says provide it will list of neutral Rules National Arbitration Association’s by the ultimate tors and abide Employment Dis- for the Resolution decision, procedure is the selection em- apply could individual putes, which not uncon one-sided and district court After the ployment cases. Local 400 decline to allow We scionable. compel arbi- motion to granted Local 400’s because it salvage simply tration, a list was obtained such harangu after may provided, have much *8 using from it was selected single arbitrator in this impartial arbitrators ing, a list of method. the strike alternate fairly in case, it to act promises or because agreement future cases. of the this construction arbi- upon Based Local 400 as written and is unenforceable provision, selection tration clause and may is not rewrite 400 asserts that the Local aon case- to standards be adhere unwritten it “must valid and enforceable because it an that is in order to claim by-case basis [of President requiring construed the Airport Perez acceptable one. Globe a neutral list of provide to 400] Cf. Inc., 1285-86 253 F.3d can Sec. Servs. parties from which the arbitrators Cir.2001) (11th re- (rejecting attempt to Appellees choose an Brief arbitrator.” unenforceable clause in compelling write arbitration and remand the it). salvage order to for litigation judicial claims in the forum. Nor it appropriate is for us to now III. adjudicate Local 400’s claim that the arbi ultimately this case was conduct We now turn to claim that the ed in a fair impartial manner before an district court in ruling erred that Murray arbitrator, a fact appears that'at least failed to state an actionable defamation subject dispute.. remain the of some When against claim Sauter and Local 400 under compelling order en arbitration was Maryland and, therefore, law in dismissing tered, reasonably believed that 12(b)(6). claim pursuant to Rule it was not immediately appealable under dismissing claim, the district court See, existing precedent. e.g., this circuit’s that ruled Sauter’s statement that Murray L-J, Inc., American Cas. Co. v. 35 F.3d not good “was organizer” was not defam- Cir.1994). Consequently, atory per law, se under Maryland and that appeal this is the first opportunity- Murray merely the statement was the expression has had to challenge the order of arbitra opinion, of Sauter’s opposed to one of tion. nowWe know that such an order fact, which could.be neither verified nor compelling arbitration dismissing in litigation. refuted underlying claims is “a final decision with law, Maryland “Under a de respect arbitration,” to an 9 U.S.C.A. famatory statement is one that tends to 16(a)(3), § immediately which is appeal- expose person public hatred, scorn, See able. Green ridicule, contempt or thereby discouraging The Supreme Court’s decision others in the community from having a Tree, however, in Green post-dates the of, good opinion or associating court’s order compelling district arbitra with, dealing person.” Samuels v. otherwise, tion. Had it been Tschechtelin, 135 Md.App. 763 A.2d would have been entitled immediately (2000) (internal 241-42 quotation appeal the compelling order un omitted). marks “To prima establish a challenge der the valid case of defamation plaintiff when the facie ity here before being public not a figure, plaintiff must forced litigate claims the arbitral (1) prove: that the made a de defendant forum at all. uncertainty Because of the famatory communication to a person; third law, the fact has not (2) false; (3) that the statement was able to appeal been the issue until now the defendant was at fault communicat cannot against future, be held him. (4) statement; ing the that the plain procedural uncertainty will not exist. tiff suffered harm.” Id. at 242. conclude, To we hold and, therefore, is unenforceable While the tort of defamation is that the district court in compelling erred generally viewed as upon one based false arbitration. Although we fact, note that may assertions of also be based district court did not have benefit of upon expression opinion to a decision in our Hooters or of the Supreme person if “opinion third im contains *9 in Green Tree granted Court when it Local plied assertions of underlying objective compel 400’s motion to “loose, arbitration of Mur- Although fact.” Id. at 242. figura ray’s claims, tive, discrimination we are none- hyperbolic language” expressing a theless constrained to reverse the order opinion may fairly mere be viewed as

306 failure to 12(b)(6) for motion to dismiss Lorain defamatory, Milkovich v. being Mary- 2695, under 21, a claim for defamation Co., state 110 S.Ct. Journal and, and re- accordingly, reverse (1990), land law 1 “a false statement 111 L.Ed.2d proceedings as claim for further for defamation mand this escape liability fact cannot Samuels, 763 well. guise opinion.” under the Milkovich, at (citing at 242

A.2d statement, even “[A] IV. can be opinion, an in terms of expressed if reasons, we reverse foregoing For circum- certain defamatory under defen- granting court’s decision district underlying facts .... stances When Murray’s Title motion to dismiss dants’ given are not opinion form the used to arbitration, compelling re- VII claim statement, defamatory along with the granting decision district court’s verse the being as may be treated itself statement dismiss motion to defendants’ defamato- potentially therefore factual and claim, and remand law defamation state Md.App. Streng, 116 ry.” Peroutka v. further proceedings. this matter for (1997). A.2d AND REMANDED. REVERSED court’s to the district Subsequent in claim Murray’s defamation HOWARD, dissenting

dismissal Judge, District case, Special Maryland Court of concurring part part: statement employer’s an Appeals held that majority’s decision I with concur for terminated employee an “had been However, I think an Part III. because defamatory se per performance” was poor not rendered un- agreement is Samuels, 241; 763 A.2d at law. under its failure to state merely conscionable Murray’s claim of defama at 245. see id. arbitrators, obtain list of how will allegation that in the genesis tion has its II of the Part I dissent from respectfully twice, stated, at one or least “Sauter majority’s opinion. [Murray] was employees, more Giant II is in Part wheth- presented issue The he so and that did good organizer,” not a exist for revoca- equitable grounds er falsity of this state knowledge with valid an otherwise tion of injure Murray. the intent to ment and with concludes an majority The arbitrate. Sauter, alleged, J.A. with silence re- 400 and for Local Organizing Director employer’s procedures an ob- spect to Mur shortly after made these statements renders the taining a list of arbitrators employment from his ray was terminated unconscionable. organizer for Local as a full-time that an majority also arbitra- indicates expression an of Sauter’s perhaps While unconscionable contains arguably at opinion Murray, it is least might employee an construe when terms might be opinion construed bylaws agreement and Murray’s failure to fulfill implying to fire allowing the President of Union organizer. union position of a duties of his of the arbitra- irrespective an employee defamatory alleged Because the statement tor’s decision. of under “implied such assertions contains Samuels, majority’s refusal to en- fact,” A.2d consider objective lying on unconscio- the arbitration clause Maryland force of this recent view with both nability grounds inconsistent Murray’s allega we hold that precedent, prece- and Fourth Circuit Supreme Rule Court to survive a tion was sufficient

307 Corp.-Ala Tree Fin. agree Murray signed dent. See Green a binding arbi- 79, Randolph, v. 531 121 agreement bama U.S. S.Ct. that covered dis- 513, (2000); 148 L.Ed.2d 373 Hooters crimination claims. Murray also cannot Phillips, Am. 173 F.3d Cir. Congress v. 933 contend that intended pre- 1999). First, I do not that an believe clude the judicial waiver of his remedies agreement’s failure to specify Id.; for discrimination claims. v. Austin party a obtains a list of Container, how arbitrators is Owens-Brockway Glass 78 provision (4th Cir.1996). egregious enough contract to F.3d 881 Second, Murray “shock conscience.” Having Murray’s established that claims anticipatory has failed to show an breach arbitrable, of discrimination are the court in providing Union of neutral list engages then in a inquiry limited into the parties’ dispute. to hear the arbitrators existence grounds of “such as exist at law I decline to read the arbitration Finally, inor equity for revocation of con any agreement bylaws foreclosing a de § tract.” 9 Seizing U.S.C. on the cision unfavorable to the Union. Accord equitable powers, court’s Murray argues ingly, would affirm the district court’s agreement the arbitration is uncon to dismiss discrimina decision scionable. As agreed to arbitrate compel tion claim and arbitration. claims, his discrimination the burden of proving uncon I. scionable Murray, lies with seek Congress ing FAA enacted the to combat a arbitration. Green avoid 531 91-92, 121 “longstanding judicial U.S. at hostility to arbitra S.Ct. 513. ... agreements place and to arbitra A.

tion agreements upon footing same other contracts.” Gilmer v. Inter The majority holds that the arbitration 20, 24, Corp., Lane 500 U.S. state/Johnson is unconscionable because the (1991). 111 114 In L.Ed.2d 26 S.Ct. selected from a list of is arbitra- evaluating agree whether an enforceable provided by tors the Union. In consider- exists, ment apply to arbitrate courts ordi ing unconscionability challenge, federal nary principles. Sydnor “[ujnconscio- v. contract Con courts must remember that Servicing seco Corp., Fin. 252 F.3d nability whereby narrow doctrine (4th Cir.2001). Moreover, federal challenged contract must be one which no single courts should not out arbitration into, person reasonable would enter status, agreements suspect but should inequality gross must be so as to shock arbitration agreements evaluate under Sydnor, conscience.” 252 F.3d prevailing (citations contract (quot standards. Id. omitted). quotations and internal Casarotto, ing Doctor’s Assocs. While the arbitration does 681, 687, 134 L.Ed.2d 902 specify not how the Union will obtain (1996)). arbitrators, list of this omission does determining agree- facially whether valid make the contract unconscionable. exists, ment to arbitrate the court must While the silence be could first whether parties agreed ask to read as allowing the Union to choose a arbitrator, their claims to reading submit arbitration. Green biased a careful Corp.-Alabama Tree Fin. v. Randolph, and the record 79, 90, 148 L.Ed.2d does not indicate that at- Union is (2000). case, tempting the instant saddle with a biased *11 308 opposing arbitration Green of individual responsibility the Placing

arbitrator. Tree, typically of fees list with the Union submitted evidence an arbitrator providing Union, repeat a associations charged by leading that recognizes has bet- process, in other arbitration in the arbitration of fees incurred player obtaining a list rejected to methods this evidence as ter access The court cases. Murray.1 While the than of arbitrators that stating Green speculative, a have drafted admittedly arbitration, could Union se- had not requesting party agreement, precise arbitration more arbitra- associate or lected an “arbitration does not make ambiguity agreement’s also dispute parties’ to resolve” tor render sufficiently oppressive to contract the arbitrator’s noting possibility that Indeed, extraordi- absent it unenforceable. 6, 121 waived. Id. at 91 n. fee would be circumstances, ambiguity mere nary other than Finding no evidence S.Ct. type provision term is not contract silence” as to agreement’s the “arbitration the con- can said to “shock be costs, the Court of arbitration allocation 252 F.3d at 305. Sydnor, science.” party “risk that [a concluded that cost short, prohibitive that be saddled with Murray argue would] does not necessarily justify invalidation speculative will too [was] pool, but that agreement.” a biased arbitrator Id. produce that the risk the contract’s silence creates S.Ct. pool of arbitrators will be biased. closely analogous this case find However, Supreme the United States Murray presents a Tree because Green Tree Financial decision in Green Court’s ’ argument similar to the “what-if scenario Corporation-Alabama Randolph, rejected in Green Tree. Supreme Court L.Ed.2d 373 that the arbitra- Murray attempts to show (2000), agree that an “arbitration counsels to the silence as Union’s arbitration terms and ment’s silence” as to pool an arbitrator selecting method for alone, in standing plainly “is procedures, unacceptable creates an risk agree to make the arbitration sufficient” However, a biased arbitrator. will face 91, 121 id. at ment unenforceable. See showing a pointing rather than to evidence (concluding produce will likelihood that the Union payment of arbitra agreement silent as pool, asks biased facially unen tion fees and costs was its decision on his tenuous court to base forceable). majori- unsupported assertions. Speaking majority, for the Chief Justice to invalidate the arbitration ty’s decision unsupported Rehnquist concluded speculative based on a risk high assumptions and unfounded fears view, is, my inconsistent with Green bias prevent arbitration costs would Tree. rights was “too vindicating federal majority’s opinion com- justify of an Neither is

speculative to the invalidation pelled by the Fourth Circuit’s decision agreement.” Randolph, Id. Mediation and Conciliation Service. that the President's Federal 1. The record indicates association then sends the or draft a list of The arbitration office does not maintain Instead, randomly arbitra- President a list of selected when arbitration is de- arbitrators. 215-16, 360-402). (J.A. disputes bargaining tors. pursuant manded to a collective Union, involving employees dispute by employee, and the Union or a a Union (J.A. charged by pays the AAA. 399- of arbitrators from the fees the Union obtains list or the the American Arbitration Association tained, Hooters America v. Phillips, 173 F.3d and “created exclusively by Hoot- *12 of Cir.1999). 938-39; represents Hooters ers.” Id. at Hooters Am. v. of (D.S.C. Phillips, 39 F.Supp.2d “limited circumstances” which an arbi- case, In this agreement containing agree- multitude ment states that provide the Union will egregiously procedures of biased rules and (J.A. 5), list of arbitrators says but party’s demonstrated one intent to make a nothing about the right Union’s or intent mockery system. of the arbitration Id. at to exercise independent control 938; over the Sydnor, 252 F.3d at 306. The court Thus, pool. the arbitration in Hooters also warned that the decision agreement in Hooters is distinguishable should not be construed as “a full-scale agreement in this case. proceedings assault on the fairness of be- fore the matter is submitted to arbitra- However, even if the agree- Hooters, tion.” 173 F.3d at 941. ment in Hooters had contained the same language to which objects, now agreement Unlike the arbitration in this do not believe Hooters would have been case, the arbitration in Hooters differently decided or would have com- required employee provide notice of pelled the majority’s invalidation of this claims, specific nature of spe- arbitration agreement. Hooters is based cific acts or omissions on the em- on the cumulative" effect of a number of based, ployee’s claims were and a list of all one-sided procedures rules and demon- the employee’s factual witnesses with a strating that “only possible Hooters’ pur- summary of the facts known to them. Id. pose” in establishing its arbitration rules contrast, Hooters did not to file have “was to undermine the neutrality of the responsive pleadings, notice of its defens- Hooters, proceeding.” [arbitration] es, provide a list of its witnesses. Id. In 939; F.3d at see also Sydnor, 252 F.3d at fact, only expand Hooters could scope (noting that unconscionability ruling in of arbitration to matters not raised in the Hooters was on based “multitude of biased claim, employee’s only Hooters could warped provided rules” and example move for summary prior dismissal to a of limited circumstances in which uncon- hearing. Id. at 939. Hooters also exer- scionability finding appropriate). In- complete cised control in determining deed, the violations Hooters were so whether to create an official record of the severe that the granted court the extraor- hearing appellate review dinary equitable remedy rescinding of and could even cancel Hooters, entire contract. 173 F.3d at 940 thirty days with notice. Id. (noting “by that Hooters’ no breach was Moreover, once the arbitrator made its means insubstantial” but involved contrac- decision, Hooters, but employee, not the tual performance egregious “so could seek vacatur or modification of the hardly recognizable result was as arbitra- by showing award by preponderance all”). tion at Faced overwhelming with evidence that the panel acted evidence that Hooters never intended to authority. outside its Id. provide employees with fair and unbi- only similarity between Hooters and forum, ased arbitration the Hooters court this case involves the selection of the arbi- concluded that the and proce- trator. Hooters the arbitration rules egregious oppressive dures were so provided that the were to choose a reading to “shock the conscience.” This three-panel arbitration board from a list of Hooters is consistent with Green Tree be- “Approved Arbitrators” compiled, main- cause the Mur- employees, Hooters’ unlike has I do not believe one-sided and While plethora to a

ray, pointed containing rules, an arbitration taking their shown unfair thus flagrantly remotely close terms even egregious unconscionability outside allegations or bad faith cited Hooters those the arena of and into speculation, realm of Union, uncon- his failure to demonstrate of harm. likelihood a demonstrative prior of contract scionability or breach that a recognizes also Hooters him re- not leave without arbitration does *13 setting arbitra- responsibility of with the the arbitra- If the skewed course. Union a contractual procedures has tion rules and favor, Murray right has the in its pool tion Hooters, in faith. duty good to do so to show postarbitration to return to court con- court in Hooters F.3d at 938. The vacatur of the arbitrator bias and seek num- of vast promulgation cluded that the § a 9 U.S.C. arbitration award under was not of unfair and rules bers biased in by the Court contemplated scenario unconscionable, duty only breached but Tree, 531 at Tree. Green Green See contrast, good faith. Id. at J., (Ginsberg, dissenting) rules and point failed to to Murray has majority opinion did not fore- (noting that faith, in promulgated bad procedures challenging arbitration close by anticipatory an breach even evidence of However, postar- postarbitration).3 costs in its contractual performing the Union not the basis of the review bitration duty a of neutral arbitra- provide to list majority’s opinion. to the dis- indicated tors. As Union court, a list of ultimately obtained trict B; source, from an outside arbitrators Arbitration Association Finally, majority passing *14 give the power ignore President the decision,

circumvent the arbitrator’s I

would refuse to read unconscionable terms agreement.

into the

II. reasons,

For foregoing respectfully I majority’s

dissent from the decision in II,

Part and would affirm the district opinion dismissing Murray’s

court’s Title

VII compelling claims and arbitration.

concur majority’s with the decision in Part

III reversing the district court’s dismissal state laws claims. America,

UNITED STATES of

Plaintiff-Appellee, Holguin HERRERA,

Ismael

Defendant-Appellant.

No. 00-51177.

United States of Appeals, Court

Fifth Circuit.

April American notes (“AAA”).2 arbitration invalidating rules are one-sided that the majority presumes reading the arbitra- agreement, employee, because an bylaws obli- carry togeth- its contractual Union’s Union will out er, arbitrator believe decision favorable to gation provide might neutral However, by ignored in accordance with be employee faith. could bad First, at wheth- supra it is President. See ordinary principles, contract believe does not to arbi- er a document is unconscionable entirely proper presume, prior subjective suggesting employee’s turn on an beliefs tration and without evidence Second, agreement. otherwise, will act in about the that both to enforce duties of while courts have refused arbi- accordance with their contractual specifically allowing agreements dealing. faith and fair good that the arbitration he provide an 3. While asserts 2. The Union selected the AAA biased, post-arbi- list because the Federal Arbitration ultimately was his received only provides arbi- Service and Conciliation bias were limited tration claims actual disputes employers and trators for between argument that arbitration was biased (J.A. 254). employees. The AAAis unionized paid because the Union all of arbitrator’s non-profit organization was large, (J.A. 403-05). majority’s fees. decision striking Hooters' used as a model in down does not discuss issue as basis Hooters, agreement. See 173 F.3d Moreover, my reading opinion. of the claims Murray presented little evidence 939-40. presented does not to the court find district poli- supporting his that the AAA’s accusation suggestion support majority's for the procedures yield arbitrators. cies and biased ultimately an arbitrator who received Thus, Murray's majority's suggestion that actually supra See at 304. was biased. Union, "hand-picked” arbitrator was supported by the record. supra at is not decisions, ignore employers to arbitrators’ the Fourth Circuit O’Neil v. Hilton Hospital, Head 115 F.3d 272 Cir. 1997),refused to such a into provision read an arbitration when the em ployer consistently agreed that arbitration binding parties. on both Id. at 275. I apply reasoning would O’Neil with equal party’s force to a attempts to infuse lim implied with its on an decisionmaking arbitrator’s authority. enforcement As neither the ar bylaws bitration nor the Union

Case Details

Case Name: Daniel C. Murray v. United Food and Commercial Workers International Union, Local 400 Donald Cash Christian Sauter
Court Name: Court of Appeals for the Fourth Circuit
Date Published: May 10, 2002
Citation: 289 F.3d 297
Docket Number: 01-1602
Court Abbreviation: 4th Cir.
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