Sterling Jewelers Inc. must arbitrate with a class of tens of thousands of female retail sales employees accusing the company of paying women less than men doing the same work based on sex, the Second Circuit ruled Nov. 18.
Sterling’s agreement gave the arbitrator hearing the matter the authority to decide whether it should proceed as a class arbitration, the appeals court said. In this case, the arbitrator said it should. The agreement expressly incorporates American Arbitration Association rules on class arbitration, which provide that an arbitrator should decide class arbitrability as a threshold issue, the court said.
Arbitrators have been certifying classes for years, but their authority to do so hadn’t been decided by a federal appellate court prior to the Second Circuit’s ruling, said the womens’ lawyer, Joseph Sellers of Cohen Milstein Sellers & Toll. The decision gives arbitrators the authority to continue that practice, he said.
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In the Sterling case, the arbitrator certified a class of 44,000 women. But in the more than five years since that certification order, the class has grown and will likely include approximately 70,000 women, Sellers said.
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The arbitrator declined to grant class certification of the women’s Title VII claims for monetary damages or their separate claims under the Equal Pay Act, the panel said.
But the arbitrator reserved the right to award back pay if Sterling is found liable and the arbitrator has a viable method to estimate damages, Sellers told Bloomberg Law.
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