Case Update: New Arbitration Agreement Not Applicable to Previously-Filed Case

Russell v. Citigroup, Inc. (6th Cir., April 4, 2014) In this case the company tried to retroactively apply a newly-signed arbitration agreement to a case after the case had already been filed. Not surprisingly, the court rejected this novel temporal approach:

From 2004 to 2009, Russell worked at Citicorp’s Florence, Kentucky call center. He had signed a standard contract to arbitrate any disputes with the company. The agreement covered individual claims but not class actions.

In 2012, Russell filed a class action against the company, claiming that the company did not pay employees for time spent logging into and out of their computers at the beginning and end of each workday. Citicorp did not seek arbitration.

In 2012, with the lawsuit still in progress, Russell applied to work again at Citicorp’s call center and was rehired. Citicorp had updated its arbitration contract to cover class claims as well as individual ones. Russell signed the new contract and began work in the call center. Russell did not consult with his lawyers before signing the new contract.About a month later, Citicorp’s outside attorneys learned that he had been rehired and sought to compel Russell to arbitrate the class action, which by then had begun discovery.

The district court held that the new arbitration agreement did not cover lawsuits commenced before the agreement was signed. The Sixth Circuit affirmed.  

Download the opinion here: Russell v. Citigroup, Inc.

Source: Justia.com