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An arbitrator has the power to decide whether a group of workers may pursue arbitration of claims of race discrimination in a class action even if the arbitration agreement is silent on the issue of class remedies, a federal judge in Philadelphia has ruled. U.S. District Judge Petrese B. Tucker, in her nine-page opinion in Brennan v. ACE INA Holdings Inc., rejected a defense argument that since the arbitration agreements do not provide for class arbitration, the plaintiffs had no right to insist on it. In the suit, a group of seven black women who formerly worked as lawyers and paralegals for Cigna and now work at ACE claim they are paid less, promoted less and given smaller raises than their white co-workers. ACE’s attorneys, Edward T. Ellis and Janice G. Dubler of Montgomery McCracken Walker & Rhoads, argued that Tucker’s previous order in June 2001 that sent the case to arbitration precluded class arbitration. As a result, Ellis and Dubler argued that when plaintiffs’ attorneys Alan B. Epstein and Nancy Abrams of Spector Gadon & Rosen insisted on proceeding as a class, they were effectively refusing to comply with Tucker’s order. Tucker, of the Eastern District of Pennsylvania, disagreed, saying that since her June 2001 ruling was silent on the issue of whether the plaintiffs may proceed as a class, the question was left for the arbitrator to decide. When the suit began, the only plaintiff was Alberta Byrd Brennan, a lawyer who began her career in medical malpractice and asbestos litigation. In 1992, four years after she graduated from Howard University Law School, Brennan was hired by Cigna as a major claims representative. Brennan claims in the suit that “almost immediately” after she was hired, she noticed that black employees in her department were treated less favorably than their white counterparts when it came to merit raises and promotions. In the first round of raises, Brennan claims, the $1,400 raise she received — about 3.4 percent — showed the disparity. While white workers in the same department averaged about 6 percent raises, the average raise for black workers was just 3.44 percent, the suit alleges. And in the following year, 1994, Brennan claims, she was given no raise at all — a practice she says CIGNA referred to as being “zeroed out.” The suit alleges that black workers were “zeroed out” at a substantially higher rate than white workers. When Brennan filed an internal grievance, the suit says, she was given a 4 percent raise. But that adjustment still left black workers lagging far behind whites, who averaged raises of more than 4.5 percent, compared with the 2.6 percent average for blacks, the suit says. Brennan also claims that white workers were regularly promoted to a higher grade level within two years, while black workers usually waited three years for the same increase. And in 1996, when Cigna announced layoffs, the suit says, the “overwhelmingly vast majority” of workers affected were black. In 1998, Brennan claims, she was passed over for a promotion to a top management post in favor of a white candidate who lacked experience in asbestos claims. By the time ACE acquired Cigna’s property and casualty operations in July 1999, Brennan was already pursuing a race discrimination claim before the U.S. Equal Employment Opportunity Commission. Since then, the suit says, ACE has failed to address or correct the allegedly racially biased policies followed by Cigna. Soon after Brennan filed suit in U.S. District Court, she was joined by six co-plaintiffs, including two more lawyers and four paralegals. In an amended complaint, Epstein and Abrams allege that the stories of the six women showed a pattern of race discrimination in pay and promotions. But Ellis and Dubler argued that the case should be sent to arbitration because each of the women had signed an arbitration agreement. The plaintiffs fought against arbitration, saying that they were coerced into signing the agreements and that going to arbitration would force them to give up substantive rights. Under the agreement, they said, the plaintiffs would be limited to two days of depositions and would have the right to depose only witnesses named by the company. Tucker disagreed and found that the arbitration agreements were enforceable. “Although procedure might not be as extensive as in federal court, by agreeing to arbitrate, the party trades procedures and opportunities for court review for the simplicity, informality and expedition of arbitration,” Tucker wrote. But the arbitration process stalled when the lawyers could not agree on the issue of whether the plaintiffs had the right to pursue their claims as a class. Defense lawyers filed a motion to have the case dismissed due to the plaintiffs’ failure to comply with Tucker’s order sending the case to arbitration. But the plaintiffs responded with a cross-motion for enforcement, arguing that it was the defense that was refusing to comply with the order. Now Tucker has sided with the plaintiffs and ruled that the issue of whether the plaintiffs may proceed as a class is properly left to the arbitrator to decide.

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