Arbitration Class Action Defense Case-DiFiore v. American Airlines: Federal Court Rejects Defense Effort To Compel Arbitration With Class Action Plaintiffs Based On Agreement With Co-Defendant

Jul 16, 2007 | By: Michael J. Hassen

Defense Attempt to Compel Arbitration of Class Action Claims Based on Arbitration Clause in Employment Agreement Between Plaintiffs and Co-Defendant Warranted Only “Passing Attention” and was Rejected by Massachusetts Federal Court

Skycaps filed a class action lawsuit against American Airlines and against their direct employer, G2 Secure Staff, LLC, which employs skycaps for airlines, alleging that American Airlines violated the Massachusetts Tips Law by imposing a $2 per bag service charge for passenger luggage checked at curbside. DiFiore v. American Airlines, Inc., 483 F.Supp.2d 121, 123 (D. Mass. 2007). Defense attorneys for American Airlines moved to dismiss the class action complaint on the grounds that the Airline Deregulation Act of 1978 preempted the class action claims, and G2 moved to dismiss the class action on the grounds that the skycaps were required to arbitrate their claims against G2 pursuant to the terms of their employment agreement with G2. Id., at 123-24. Plaintiffs stipulated to arbitrate their claims against G2; and American argued that “at least some of the skycaps must arbitrate their claims” against American as well as G2, id., at 127. The district court denied American’s motion to dismiss, and rejected also defense arguments in favor of arbitration.

We do not here address the federal court’s discussion of the Airline Deregulation Act, or its conclusion that the class action claims were not expressly or implied preempted by the Act. See DiFiore, at 124-27. We discuss DiFiore only because of the increasing attention given to arbitration clauses in the context of class action litigation. As noted above, American sought to “piggyback” on the arbitration agreement contained in plaintiff’s employment contracts with G2. Id., at 127. The district court’s response was terse and to the point: “This Court need not give more than passing attention to this argument. The arbitration agreement, by its own terms, is limited in scope to claims arising between G2 and G2 employees…. For this reason alone, this Court rejects American’s effort to compel arbitration.” Id.

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