The Colorado Springs Gazette

Court restricts judges’ ability to address unfair arbitration

BY MICHAEL KARLIK michael.karlik@coloradopolitics.com

Even if a private arbitrator did not follow the agreed-upon procedures or explain her reasoning, a man could not ask a judge to order a redo of his age discrimination proceedings, the federal appeals court based in Denver ruled last week.

The effect of the decision was to clarify — and narrow — the ability of judges to step in and address unjust outcomes from the privately run arbitration system.

A three-judge panel of the 10th U.S. Circuit Court of Appeals acknowledged the case of Gary Waetzig presented an “open question” on an “underdeveloped legal issue.” Specifically, if Waetzig originally dismissed his age discrimination lawsuit so arbitration could occur, did federal rules allow a trial judge to eventually overturn the arbitrator’s allegedly unfair decision?

By 2-1, the panel said no. Originally, Waetzig filed suit against his employer, oil services company Halliburton, for being laid off at age 66, allegedly in violation of federal law. He agreed to dismiss the lawsuit because he was required to arbitrate his dispute with the corporation.

An arbitrator eventually sided with Halliburton, but Waetzig returned to federal court, asking a judge to order another arbitration. He cited several ways in which arbitrator Florine Clark allegedly violated the rules of the arbitration:

• She did not give 10 days’ notice of the hearing at which she expected the parties to argue their positions.

• She did not record the hearing.

• She did not explain why she decided in Halliburton’s favor.

Then-U.S. Magistrate Judge Kristen Mix agreed Clark did not follow the agreed-upon protocol and a new arbitrator needed to redo the hearing.

Halliburton appealed, arguing Waetzig only wanted a “second bite at the apple.”

Further, he had options to challenge Clark’s decision that did not call into question Mix’s authority to order a new arbitration — including by filing his request sooner.

Judge Timothy Tymkovich, writing for himself and Judge Allison Eid, concluded the circumstances of the lawsuit’s dismissal prevented Mix from taking action.

He honed in on the rule that enables judges to overturn a “final judgment.” Because Waetzig dismissed his lawsuit without a judge ever ruling on it, there was nothing final to revisit.

Tymkovich left open the possibility that in “rare” instances, the lack of a judge’s order can still make a case final.

“And perhaps we will ‘ know it when we see it,’” he elaborated. But, he added, Waetzig’s case “is not it.”

Judge Scott Matheson Jr. objected to the hole Waetzig found himself in. In Matheson’s view, Waetzig could neither file a new lawsuit nor challenge the arbitrator’s decision in any other way.

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2023-09-17T07:00:00.0000000Z

2023-09-17T07:00:00.0000000Z

https://daily.gazette.com/article/281711209252841

The Gazette, Colorado Springs