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When can a Court Overturn an Arbitration Award in a Discrimination Case?

When can a Court Overturn an Arbitration Award in a Discrimination Case?

Many New York employees are subject to arbitration agreements. This means that if they are victims of employment discrimination or any other illegal act arising from their employment, their claim will be heard by an arbitrator instead of a judge. Although arbitration is often criticized as unfairly weighted in favor of employers, federal law nevertheless strongly supports arbitration. Under the Federal Arbitration Act (FAA), a court must uphold an arbitrator's decision–known as an “award”–subject to certain limited exceptions.

Unfortunately for workers, these exceptions are often unhelpful. Consider this recent decision by a Manhattan federal judge. The plaintiff in this case worked for the defendant. He was also a member of a labor union that had a collective bargaining agreement (CBA) with the defendant. Under the CBA, the union agreed its members would submit any employment discrimination claims to arbitration. Here, the plaintiff did so–apparently representing himself without the assistance of an attorney–and the arbitrator's award ultimately rejected most of the plaintiff's allegations.

The plaintiff asked a judge to vacate the award. The judge declined to do so. First, the judge noted the plaintiff was bound by the union's arbitration agreement even though he never personally agreed to mandatory arbitration. Second, the judge said that none of the grounds for vacating or modifying the award under the FAA applied to this case. Those grounds are as follows:

  • The award is the product of “corruption, fraud, or undue means,” or there was “evident partiality or corruption in the arbitrators.”
  • The arbitrators committed “misconduct in refusing to postpone the hearing” for good cause or in otherwise prejudicing the rights of either party.
  • The arbitrators “exceeded their powers” or failed to make a “final” and “definite” award “upon the subject matter submitted.”
  • There was an “evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award.”
  • The arbitrators exhibited “manifest disregard of the law” by refusing to apply law that was “well defined, explicit, and clearly applicable to the case.”

Essentially, the plaintiff here disagreed with the arbitration award, but he could not point to any evidence that the arbitrators acted outside the scope of their legal authority. The judge was therefore required to confirm the arbitration award and dismiss the plaintiff's lawsuit.

Speak with a New York City Employment Discrimination Lawyer Today

Even though arbitration is often billed as a less formal legal proceeding than a trial, you should still never represent yourself when your rights are on the line. An experienced New York City employment discrimination lawyer can assist you in building the strongest case for arbitration or trial. An attorney can also help ensure your employer (or former employer) does not abuse the legal process to your detriment. So, if you have been the victim of workplace discrimination and need advice on what steps to take next, contact the Law Offices of Nisar Law Group, P.C., today.

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