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A Pennsylvania federal court upheld an arbitration award in favor of two employees who alleged race discrimination against their former employer, finding that the award was based on discriminatory treatment rather than a non-arbitrable hostile work environment claim.
In Brennan v. Cigna Corp., No. 00-2730, 2006 WL 3254529 (E.D. Pa. Nov. 9, 2006), seven people brought race discrimination claims against Cigna, their former employer. The arbitrator awarded damages to two of the former employees, finding that they were “victim[s] of a racially hostile environment” and subject to “discriminatory treatment.”
Cigna moved to vacate the award, arguing that the arbitrator exceeded his authority by awarding damages for a hostile work environment when the employees’ claims were premised on discriminatory treatment rather than a hostile work environment. In making this argument, Cigna maintained that the arbitrator’s written opinion revealed that he awarded damages for a hostile work environment rather than discriminatory treatment.
The Court denied Cigna’s motion and confirmed the award. Citing Roadway Package Systems Inc. v. Kaiser, 257 F.3d 287 (3d Cir. 2001), the Court explained that it is presumed that the arbitrator acted within the scope of his authority, and an ambiguity in the arbitrator’s written opinion will not overcome this presumption. Applying that standard, the Court confirmed the award because it was not “obvious from the written opinion” that the arbitrator exceeded his authority.
The Kansas Court of Appeals rejected a similar argument in Frebar, Inc. v. Sanctum, LLC, 141 P.3d 1199 (Kan. Ct. App. 2006). In that case, the aggrieved party argued that the arbitrator exceeded his authority in awarding damages for fraud when the claimant never specifically pled fraud. The court rejected that argument because the rules of arbitration did not impose strict pleading requirements.
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