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Jock v. Sterling Jewelers Inc.

United States Court of Appeals, Second Circuit

November 18, 2019

Laryssa Jock, Christy Chadwick, Maria House, Denise Maddox, Lisa McConnell, Gloria Pagan, Judy Reed, Linda Rhodes, Nina Shahmirzadi, Leighla Smith, Marie Wolf, Dawn Souto-Coons, Plaintiffs-Counter-Defendants - Appellants,
v.
Sterling Jewelers Inc., Defendant-Counter-Claimant - Appellee. Jacquelyn Boyle, Lisa Follett, Khristina Rodriguez, Kelly Contreras, Plaintiffs-Counter-Defendants,

          Argued: May 7, 2018

          Appeal from the United States District Court for the Southern District of New York No. 08-cv-2875, Rakoff, Judge.

         The arbitrator certified a class of Sterling Jewelers Inc. employees that included employees who did not affirmatively opt in to the arbitration proceeding. The District Court held that the arbitrator exceeded her authority in purporting to bind those absent class members to class arbitration because the arbitrator erred in determining that the arbitration agreement permits class arbitration. We hold that the arbitrator was within her authority in purporting to bind the absent class members to class proceedings because, by signing the operative arbitration agreement, the absent class members, no less than the parties, bargained for the arbitrator's construction of their agreement with respect to class arbitrability. We therefore reverse the judgment of the District Court. Because the issue of whether the arbitrator exceeded her authority in certifying an opt-out, as opposed to a mandatory, class is not before us in this appeal, we remand the case to the District Court to reexamine that issue in the first instance.

          Joseph M. Sellers, Kalpana Kotagal, Shaylyn Cochran, Cohen Milstein Sellers & Toll PLLC, Washington, DC; Sam J. Smith, Loren B. Donnell, Burr & Smith LLP, St. Petersburgh, FL; Thomas A. Warren, Thomas A. Warren Law Offices, P.L., Tallahassee, FL; Jessica Ring Amunson, Benjamin M. Eidelson, Jenner & Block LLP, Washington, DC, for Plaintiffs-Counter-Defendants-Appellants.

          Gerald L. Maatman, Jr., David Bennet Ross, Lorie E. Almon, Daniel B. Klein, Seyfarth Shaw LLP, New York, NY; Jeffrey S. Klein, Gregory Silbert, Weil, Gotshal & Manges LLP, New York, NY, for Defendant-Counter-Claimant-Appellee.

          Before: Hall and Carney, Circuit Judges, and Koeltl, District Judge. [*]

          Hall, Circuit Judge

         This is an appeal from the District Court's January 15, 2018 opinion and order vacating the arbitrator's certification of a class of Defendant-Counter- Claimant-Appellee's employees insofar as the class included employees who did not affirmatively opt in to the specific arbitration proceeding before the arbitrator. The District Court held that the arbitrator, Kathleen A. Roberts, exceeded her authority in purporting to bind those absent class members to class arbitration because the arbitrator erred in determining that the arbitration agreement permits class arbitration. We hold that the arbitrator's determination that the agreement permits class arbitration binds the absent class members because, by signing the RESOLVE Agreement, they, no less than the parties, bargained for the arbitrator's construction of that agreement with respect to class arbitrability. We therefore reverse the judgment of the District Court. The issue of whether the arbitrator exceeded her authority in certifying an opt-out, as opposed to a mandatory, class is not before us in this appeal, however. We therefore remand this case to the District Court to decide that issue in the first instance after allowing the parties an opportunity to present their renewed arguments with respect to that issue.

         I.

         Laryssa Jock ("Jock") and her co-Plaintiffs-Counter-Defendants-Appellants (collectively, "Appellants") are a group of current and former retail sales employees of Defendant-Counter-Claimant-Appellee Sterling Jewelers Inc. ("Sterling").[1] Jock filed the instant suit in 2008, alleging that she and other female employees were paid less than their male counterparts, on account of their gender, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Equal Pay Act, 29 U.S.C. § 206(d).

         All Sterling employees were required, as a condition of employment, to sign a "RESOLVE Program" agreement ("RESOLVE Agreement") mandating that they participate in arbitration. J. App. 129. Under the RESOLVE Agreement, employees "waiv[e] [their] right to obtain any legal or equitable relief . . . through any government agency or court, and . . . also waiv[e] [their] right to commence any court action. [They] may, however, seek and be awarded equal remedy through the RESOLVE Program." Id. The RESOLVE Agreement also provides that "[t]he Arbitrator shall have the power to award any types of legal or equitable relief that would be available in a court of competent jurisdiction[, ]" and that any claim arising thereunder will be arbitrated "in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association." Id.

         II.

         This is the fourth time this case has come before this Court. See Jock v. Sterling Jewelers Inc., 646 F.3d 113 (2d Cir. 2011) ("Jock I"); Jock v. Sterling Jewelers Inc., 703 Fed.Appx. 15 (2d Cir. 2017) (summary order) ("Jock II"); Jock v. Sterling Jewelers Inc., 691 Fed.Appx. 665 (2d Cir. 2017) (summary order) ("Jock III").

         In Jock I, the arbitrator issued an award in favor of the then-named plaintiffs, construing the RESOLVE Agreement to permit classwide arbitration. The District Court vacated that award, concluding that under Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (2010), "the arbitrator's construction of the RESOLVE agreements as permitting class certification was in excess of her powers." Jock I, 646 F.3d at 118 (quoting Jock v. Sterling Jewelers, Inc., 725 F.Supp.2d 444, 448 (S.D.N.Y. 2010)). We reversed, holding that the District Court impermissibly substituted its own legal analysis for that of the arbitrator instead of focusing its inquiry on whether the arbitrator was permitted to reach the question of class arbitrability that had been submitted to her by the parties. Id. at 123-24. We explained, furthermore, that the arbitrator had a colorable justification under the law to reach the decision she did. We distinguished Stolt-Nielsen on the ground that the parties in Stolt-Nielsen stipulated that their arbitration agreement contained "no agreement" ...


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