What happened
The Second Circuit on Friday revived a state court path for former New York City home healthcare workers challenging wage practices, vacating in part orders that had confirmed union arbitration awards against more than 40 employers.
The panel vacated the Southern District of New York's judgments as to appellants and intervenor-appellants who said they had left covered employment before a 2015 memorandum of agreement added mandatory arbitration for statutory wage claims. The ruling sends the matter back for revised judgments and leaves the former workers free to press claims against Chinese-American Planning Council Home Attendant Program, United Jewish Council of the East Side Home Attendant Service Corp., First Chinese Presbyterian Community Affairs Home Attendant Corp. and Alliance for Health Inc. in state court.
Writing for a panel that also included Judges John M. Walker Jr. and Myrna Pérez Lee, Circuit Judge Susan L. Carney said the district court, not the arbitrator, had to decide whether the parties clearly and unmistakably agreed to arbitrate the statutory wage claims. The court then answered that arbitrability question de novo, concluding that 1199 SEIU and the employers did not agree to mandatory arbitration of those statutory claims until the 2015 MOA.
That timing mattered because the named former workers had already left their employment, bargaining units and union membership before the 2015 agreement took effect. The opinion said the union, when it entered the 2015 MOA, "could not lawfully waive those individuals’ rights" to judicial consideration of accrued claims absent some manifestation of consent.
The dispute grew out of a 2019 arbitration brought by 1199 SEIU on behalf of more than 100,000 current and former home healthcare workers alleging federal, state and local wage-and-hour violations. The arbitrator issued a first award finding he had authority and a second award finding wage violations, ordering a special wage fund of about $30 million and a rapid payout process for underpaid employees.
The union won confirmation of both awards before U.S. District Judge John G. Koeltl without opposition from the employers, and the fund was fully distributed before the Second Circuit heard argument. But several former workers who had brought or sought to pursue state court wage suits tried unsuccessfully to intervene or object, arguing they were not union members when the 2015 MOA was signed and could not be forced into arbitration of accrued statutory claims.
The Second Circuit agreed that the district court erred by denying intervention and by confirming the awards insofar as they purported to bind those appellants and intervenor-appellants. The panel said the arbitrator exceeded his authority to that extent and left questions about whether the former workers and any classes they seek to represent can recover on their wage claims to the state courts in the first instance.