Arbitrator may have exceeded authority in sex discrimination case: Court

An arbitrator may have overstepped her authority in certifying a class that included class members who have not opted in, in an eight-year-old sex discrimination case against Sterling Jewelers Inc., says a federal appeals court in overturning a lower court ruling.

Plaintiffs charged Akron, Ohio-based Sterling with sex discrimination in promotion and compensation against current and former female employees in class-action litigation first filed in March 2008, according to court papers in Laryssa Jock et al. v. Sterling Jewelers Inc. The plaintiffs charged violations of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act.

The case was eventually turned over to an arbitrator. “The narrow question presented here is whether the arbitrator had the authority to certify a class that included absent class members, i.e., employees other than the named plaintiffs and those who have opted into the class,” said the ruling by a unanimous appeals court panel of the 2nd U.S. Circuit Court of Appeals in New York.

The panel cited the U.S. Supreme Court’s 2013 decision in Oxford Health Plans L.L.C. v. Sutter, in which it unanimously held an arbitrator’s interpretation of a contract must be followed regardless of its merits.”

 “In that case, the court wrestled solely with the question of whether an arbitrator to whom the parties had submitted the issue acted within his authority in finding that a contract provided for class arbitration,” said the ruling.

It “does not speak, however, to whether an arbitrator in that scenario also has the authority to certify a class containing absent class members,” said the panel.

The panel vacated the court’s ruling and remanded the case to the District Court to consider whether the arbitrator had exceeded her authority in certifying a class that contained absent class members who have not opted in.

In May 2017, Sterling Jewelers settled claims by the U.S. Equal Employment Opportunity Commission that it had discriminated against female employees in pay and promotions.