January 8, 2014

January 8, 2014:
Fifth Circuit rejects a statistical challenge to the enforceability of an arbitration agreement between employer and employee.  Diggs v. Citigroup, Inc., No. 13-10138, 2014 WL 54637 (5th Cir. Jan. 8, 2014) (unpublished).

Citigroup hired Samantha Diggs as an at-will employee.  She signed an arbitration agreement that required submission of all employment related disputes to binding arbitration.  When Citigroup terminated her employment, she sued for sex discrimination.  In the district court, Ms. Diggs cited a study by Cornell Professor Alexander Colvin and an accompanying Affidavit by Professor Colvin to argue that the arbitration agreement was unconscionable and violated public policy.  The Colvin study purported to show that employees won a higher percentage of cases and received higher awards in state and federal courts as compared to arbitration – in other words, that arbitration disproportionately favored employers over employees.  Finding that the Colvin study did not meet the relevance and reliability standards of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), the district court rejected the challenge to the arbitration agreement and compelled arbitration.  The Fifth Circuit affirmed. 

The Fifth Circuit found several flaws in the Colvin study.  The study was prepared three years before Ms. Diggs filed her lawsuit, and the most recent data in the study predated Ms. Diggs’s suit by five years.  Neither the study nor Professor Colvin’s Affidavit addressed the implications of the study on the enforceability of the particular arbitration agreement between Ms. Diggs and Citigroup.  And the study compared results in arbitrations during the period 2003-2007 to results in federal courts several years earlier and even more dated results from a single year of state court cases.  Accordingly, the Fifth Circuit held that the district court had not abused its discretion, and it affirmed the district court order compelling arbitration.  Pursuant to Fifth Circuit Rule 47.5, the court designated its opinion unpublished and, therefore, not precedential except in limited circumstances.  

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