The U.S. Court of Appeals for the Second Circuit heard oral argument this morning in Chen-Oster v. Goldman, Sachs & Co., No. 11-5229 (2d Cir.). The district court in this case had refused to compel arbitration of individual employment discrimination claims, finding that Title VII guaranteed the right to pursue pattern or practice claims on an class-wide basis. We have discussed this issue generally and this case specifically previously here and here due to its importance to employers.
The case, a Rule 23 class action, was filed in 2010 by three women who accused Goldman of gender bias and a “corporate culture” that allegedly favors men over women for pay and promotions. Goldman moved to compel arbitration on an individual basis. In April 2011, U.S. Magistrate Judge James Francis denied Goldman’s motion. Goldman urged Francis to reconsider his ruling in light of the Supreme Court’s AT&T v. Concepcion decision, but he declined in July 2011. U.S. District Judge Leonard Sand affirmed that decision in November 2011.
The substantive importance of this case for rapidly developing law in this area is clearly revealed by the fact that no less than four amicus briefs were filed. You can read them here, here, here, and here.
As we wrote on this blog previously, class arbitration is not only costly, but has fewer procedural protections – such as appeal rights – than class action lawsuits. As the courts continue to apply Concepcion, it seems clear that employers are well-advised to follow developments in this area closely.