Judge Drops Thousands from Sterling Discrimination Case

New York--A federal judge ruled last week that the arbitrator in charge of the sex discrimination case against Sterling Jewelers overstepped her bounds in including women who did not opt into the class, and he cut thousands of women from the case.

Arbitrator Kathleen A. Roberts ruled in February 2015 that women could pursue claims of pay and promotion discrimination against the retailer as a class, and certified a class of approximately 70,000 individuals that included all women who had worked for Sterling within a specific range of dates, regardless of whether or not they had said they wanted to be part of the case.

Sterling appealed the decision twice and in July 2017, the U.S. Second Circuit Court of Appeals sided with the retailer, ruling that the issue of whether or not an arbitrator has the power to include people who do not opt into the class had never been “squarely addressed,” and remanded the issue to the U.S. District Court in Manhattan.

On Jan. 16, federal Judge Jed S. Rakoff ruled that the arbitrator does not have this power, writing in his decision, “Arbitrators are not judges. Nowhere in the Federal Arbitration Act does Congress confer upon these private citizens the power to bind individuals and businesses except in so far as the relevant individuals and businesses have bound themselves.”

“The court finds that the arbitrator here had no authority to decide whether the RESOLVE agreement permitted class-action procedures for anyone other than the named parties who chose to present her with that question and those other individuals who chose to opt in to the proceeding before her.”

RESOLVE is the name for Sterling’s internal dispute resolution system; upon hire, all employees agree to settle any workplace disputes in private arbitration, a practice some lawmakers are looking to force companies to change because, they say, it can discourage women who have been discriminated against or sexually harassed from speaking up.

The judge’s ruling cuts the size of the class down from 70,000 to the approximately 250 women who either filed the original arbitration claim under Title VII--which covers claims of promotion discrimination--or were part of the claim before the 2015 class certification that Rakoff just overturned.

There are, however, 10,000 other women who opted into a separate class in 2016 under claims brought under the Equal Pay Act (EPA).

Washington, D.C.-based attorney Joseph Sellers, who represents the women who filed