Dispute Pending In Court May Not Be Made Subject To Arbitration

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An individual had a dispute over work-related issues while working at a Citicorp call center. His employment agreement required arbitration of individual disputes but did not require the arbitration of class claims. The employee filed a class action lawsuit, and left Citicorp’s employ. In what the Sixth Circuit called “a confluence of improbable circumstances,” the former employee was rehired by Citicorp while the class action lawsuit was still pending, but this time signed an employment agreement which required the arbitration of both individual and class claims. The issue was whether he could be compelled to arbitrate the pending class claims. The Court interpreted the second arbitration provision to be prospective only, designed to head off new lawsuits rather than cut off existing lawsuits. This was a question of the interpretation of the arbitration agreement, and despite the general interpretation rule favoring arbitration, the Court found that there was “no doubt” as to the scope of the arbitration provision in the new employment agreement. Therefore, the employee was not required to arbitrate the pending class claims. The Court noted that there was an ethical issue of Citicorp dealing with an employee who was represented by counsel in a pending lawsuit concerning the subject matter of the lawsuit, but found it unlikely that Citicorp’s lawyers intended the provision to be provided to parties to pending litigation. Russell v. Citigroup, Inc., No. 13-5994 (6th Cir. April 4, 2014).

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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