What happened
The Second Circuit on Friday vacated part of a set of orders confirming wage-and-hour arbitration awards involving 1199 SEIU and New York City-area home healthcare employers, ruling that former workers who left before a key 2015 agreement can continue pursuing their claims in state court.
In an opinion by Circuit Judge Carney, the panel held that the former workers who appealed or sought intervention were entitled to intervene in the federal confirmation proceedings and had not clearly delegated arbitrability of their statutory wage claims to the arbitrator. The court said those workers did not ultimately agree to submit their accrued wage claims to arbitration and are therefore "free to pursue their statutory wage claims against the Named Employers" in state court.
The dispute stems from a 2019 arbitration brought by 1199 SEIU United Healthcare Workers East against more than 40 home healthcare employers on behalf of more than 100,000 current and former workers. The arbitrator found the employers had violated wage statutes, awarded damages on an individual basis and required the employers to create a special wage fund of about $30 million for underpaid employees.
The union won confirmation of the awards in the Southern District of New York, but several pre-2015 former employees objected that the union could not retroactively bind them to mandatory arbitration after they had left employment, their bargaining units and union membership. The Second Circuit agreed that the district court erred by denying intervention and by confirming the awards to the extent they purported to bind those appellants and intervenor-appellants.
The panel emphasized that the union and employers did not clearly and unmistakably delegate the arbitrability question to the arbitrator, and that the 2015 memorandum of agreement could not bind former workers' already-accrued statutory wage claims absent consent. The court vacated the district court judgments in part and remanded for revised judgments.
The ruling does not decide whether the former workers or the classes they seek to represent will ultimately recover on their wage claims. The Second Circuit said those questions, including class-related issues, are for the state courts to address in the first instance.