IBM wins Second Circuit victory rejecting wave of challenges to timeliness provision in arbitration agreement
Client(s) International Business Machines Corporation
Jones Day successfully defended International Business Machine Corporation ("IBM") in dozens of lawsuits seeking to invalidate a key provision in an arbitration agreement. Numerous former IBM employees filed declaratory-judgment actions in the Southern District of New York, seeking declarations that an arbitral timeliness provision contained in their separation agreements was unenforceable. That provision required the plaintiffs to file any arbitration demands asserting age-discrimination claims under the Age Discrimination in Employment Act ("ADEA") within the same time period federal law gives employees to file charges with the Equal Employment Opportunity Commission. The plaintiffs argued that the provision was unenforceable because it did not incorporate the so-called "piggybacking rule"—an exception to the ADEA's charge-filing exhaustion requirement that permits plaintiffs in certain circumstances to rely on another plaintiff's timely filed charge rather than filing their own. Each district court rejected that argument and upheld the timeliness provision.
The Second Circuit affirmed these dismissals, holding that the piggybacking rule does not apply in arbitration and, in any event, is not a non-waivable substantive right under the ADEA. The Second Circuit also held that, insofar as the plaintiffs attempted to "evade" arbitral confidentiality by attaching confidential arbitration materials to a "premature motion for summary judgment" and seeking to have them unsealed on the court's docket, the presumption of public access was "outweighed . . . by the Federal Arbitration Act's strong policy in favor of enforcing arbitral confidentiality provisions and the impropriety of counsel's attempt to evade" the confidentiality rules to which each plaintiff agreed.
In re IBM, No. 22-1728 (2d Cir.); Chandler v. Int’l Bus. Machs. Corp., No. 22-1733 (2d Cir.); Lodi v. Int’l Bus. Machs. Corp., No. 12-1737 (2d Cir.); Tavenner v. Int’l Bus. Machs. Corp., No. 22-2318 (2d Cir.)
