Judge Bea Ann Smith, Chuck Herring, and Karl Bayer presented yesterday the issue of Arbitration of Attorney/Client Disputes at the TexasBarCLE. Thanks to Chuck Herring for sharing his paper with us. For more information, visit our previous posts: The Texas Perspective on Arbitration of Attorney/Client Disputes Arbitrating With Your Client? (with link to paper by Dicky Hile)

Here is an interesting article, from the ABA Journal’s Law News Now. By Debra Cassens Weiss. An arbitrator has awarded a former employee of an e-discovery firm $300,000 after chastising her one-time employer for failing to turn up e-mails that supported her case. Cassondra Todd, the former managing director of Guidance Software Inc., claimed the company fired her in part because she was a woman. An initial round of e-discovery produced little evidence, but then Todd located some relevant e-mails that had been saved by a former manager, now the head of a rival company, the Associated Press reports. “At the very least, the case shows how thorny electronic evidence searches can be, even for a specialist,” the AP story says. One of the e-mails in the files of the former manager, Tim Leehealey, questioned whether someone in the company was setting Todd up to be fired, the AP story says. “She was a good employee and produced for me,” he said in the e-mail. After the extra e-mails were fond in Leehealey’s files, the retired judge arbitrating the case, William McDonald, ordered another round of e-discovery. But the company came back with nothing, except for the news that one of its backup tapes for e-mail had been corrupted, the story says. “I want this game-playing stopped,” McDonald said. Victor Limongelli, Guidance’s new chief executive, told AP he doesn’t know why the company failed to find the e-mails, but did say a lost laptop was the reason for one oversight. He also said the company was not required to search backup tapes in the early stages of discovery because of the expense. “We think we followed what is a quite normal course,” he told AP.

The latest Fifth Circuit‘s decision related to arbitration is Cont’l Airlines, Inc. v. Air Line Pilots Ass’n, _F.3d_ (5th Cir. 2009) (Cause No. 07-20835). This case falls within the Railway Labor Act (RLA), which provides that minor disputes must be resolved through compulsory and binding arbitration before the System Board of Adjustment (SBA). Here, a pilot is appealing an order of the U.S. District Court for the Southern District of Texas reversing a reinstatement order of the SBA. The court noted that it had refused to enforce at least two arbitration awards reinstating a safety-sensitive employee discharged for drug or alcohol abuse. However, the subsequent U.S. Supreme Court case Eastern Associated Coal Corp. v. Mine Workers, 531 U.S. 57 (2000) had narrowed the public policy exception. There, the Fourth Circuit had held than an arbitration award that reinstated a DOT safety-sensitive employee who had failed a drug test, violated public policy. But the U.S. Supreme Court reversed it. The court concluded that, after Eastern, their “ability to set aside decisions like that of the SBA in this case is severely circumscribed.”

In contrast to the Texas case of last week, the U.S. Court of Appeals for the Third Circuit held, in an employment discrimination and retaliation case, that forty-one plaintiffs who were not signatories to the arbitration agreement were not required to arbitrate. Mendez v. Puerto Rican Int’l Cos., No. 07-4053, (3rd Cir. 2009). The eight signatories plaintiffs, however, were compelled to arbitrate their claims. The court stated that section 3 of the FAA ” was not intended to mandate curtailment of the litigation rights of anyone who has not agreed to arbitrate any of the issues before the court.”