Fifth Circuit COA Vacates Lower Court’s Order Withdrawing Arbitration
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The nation’s Fifth Circuit Court of Appeals has ordered a discrimination and retaliation lawsuit to arbitration. In Salas v. GE Oil & Gas, No. 16-20379 (5th Cir. May 12, 2017), a man, Gaspar Salas, began working for GE Oil & Gas after the company acquired his former employer. At the time of the acquisition, GE introduced a dispute resolution program requiring workers who continued their employment with the company after November 1, 2013 to abide by the company’s arbitration program.
About six months after the dispute resolution program became effective, Salas filed a discrimination and retaliation lawsuit against GE. GE responded to the man’s complaint by filing a motion to compel arbitration based on the company’s dispute resolution program. The trial court granted the company’s motion, but the parties did not engage in arbitral proceedings.
More than one year later, Salas filed a motion to compel arbitration with the same trial court. Instead of granting the redundant motion, however, the court withdrew its earlier order compelling arbitration and reopened the case citing the parties’ failure to engage in arbitration. After that, GE filed an unsuccessful motion for reconsideration before filing an appeal with the United States Court of Appeals for the Fifth Circuit.
The Fifth Circuit first dismissed Salas’ argument that the appellate court lacked jurisdiction to consider GE’s appeal. Next, the court addressed GE’s claim that the district court lacked subject matter jurisdiction to reopen the case. After stating “This Court has held that a district court may retain ancillary jurisdiction (beyond merely enforcing the arbitration award) even after compelling arbitration and dismissing a case,” the Fifth Circuit added:
Read original articleThe district court’s order of March 30, 2016, did not fall within the narrow scope of this ancillary jurisdiction. The court neither determined whether the parties’ agreement to arbitrate was valid nor enforced that agreement. Instead, the court found that the parties had “failed” to arbitrate and withdrew its prior order compelling arbitration. This was not permitted under the FAA. 9 U.S.C. § 4.
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