November 18, 2019

The Second Circuit on Monday added what could be tens of thousands of female workers to a class arbitration accusing Sterling Jewelers of paying women less than men, reversing U.S. District Judge Jed Rakoff's ruling that limited the group to the few hundred workers who formally joined the dispute.

By agreeing to arbitrate disputes with Sterling in the first place, these tens of thousands of “absent” workers agreed to be bound by arbitrators’ decisions on the scope of their agreement, the three-judge panel said.

The Second Circuit reversed a ruling Monday that said only women who had formally opted in could proceed with a class arbitration accusing Sterling Jewelers of sex bias, potentially bringing droves of workers back into the battle. Sterling subsidiaries include Jared the Galleria of Jewelry and Kay Jewelers.

The arbitrator’s February 2015 finding that the agreement allowed class arbitration therefore applied to these workers regardless of their participation in the dispute, the panel said, reversing Judge Rakoff’s ruling that the arbitrator couldn’t bind workers who hadn’t joined.

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It’s not clear how many women are part of the class, which goes as far back as 2003 and extends through trial. The arbitrator’s February 2015 decision certified a class of about 44,000 women, while Judge Rakoff said the class numbered more than 70,000 workers, citing estimates from Sterling. The workers’ attorney, Joseph Sellers of Cohen Milstein Sellers & Toll PLLC, told Law360 that these figures represent the data available at the time these decisions were issued, and that there may now be more class members.

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Monday’s opinion may be the first ever endorsing arbitrators’ power to bind absent class members, which arbitrators have long exercised, Sellers said.

“It’s a thoughtful, well-reasoned decision,” the workers’ attorney said. “It lays out in very simple form why the arbitrator could bind … absent class members, just as judges do in courts.”

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The workers are represented by Joseph Sellers, Kalpana Kotagal and Shaylyn Cochran of Cohen Milstein Sellers & Toll PLLC; Sam J. Smith and Loren B. Donnell of Burr & Smith LLP; Jessica Ring Amunson of Jenner & Block LLP; and Thomas A. Warren.

The complete article can be viewed here.