Opalinski v. Robert Half Int’l Inc., No. 12-4444, 2014 U.S. App. LEXIS 14538 (3rd Cir. 2014) [click for opinion]

Two former employees of Robert Half International, Inc. sued for failure to pay overtime and for violations of the Fair Labor Standards Act. Plaintiffs had signed employment agreements containing arbitration provisions, which provided for submission of all disputes to arbitration; but neither agreement mentioned classwide arbitration. The district court granted Robert Half’s motion to compel arbitration but held that the arbitrator should decide whether classwide arbitration was available. After the arbitrator issued a partial award and ruled that the agreements did provide for classwide arbitration, Robert Half moved the district court to vacate the award. The district court denied the motion.

On appeal, the Third Circuit reversed and remanded. The court held that “the availability of class arbitration is a ‘question of arbitrability’ for a court to decide unless the parties unmistakably provided otherwise.” In so holding, the Third Circuit joined the Sixth Circuit (the only other circuit to squarely address the issue), and noted that the Supreme Court has not decided the issue.

In reaching its holding, the court found that determinations of the availability of classwide arbitration affect whose claims may be arbitrated, a question that the court has repeatedly held to be an issue for the courts. The decision of classwide arbitrability is particularly appropriate for determination by the court because such a determination affects the rights of absent class members.

The court also found that the availability of classwide arbitration also affects the type of disputes that may be arbitrated, making the determination a “question of arbitrability.” The court, like the Sixth Circuit, noted the numerous differences between bilateral and classwide arbitration and held that “[t]raditional individual arbitration and class arbitration are so distinct that a choice between the two goes . . . to the very type of controversy to be resolved.” Quoting the Supreme Court, the court also dismissed Plaintiffs' arguments that the availability of classwide arbitration was merely procedural because “class-action arbitration changes the nature of arbitration to such a degree that it cannot be presumed the parties consented to it by simply agreeing to submit their disputes to an arbitrator.”

After determining that the availability of classwide arbitration was a “question of arbitrability,” the Third Circuit analyzed whether evidence existed to rebut the presumption that such a question should be decided by a court. Overcoming the presumption requires express contractual language unambiguously designating the question of arbitrability to the arbitrator. The court held that Plaintiffs’ employment agreements, which contained no mention of class arbitration, did not meet the burden of overcoming the presumption.