Court to Macy's: Clean Up on Arbitration Aisle

In New York, an employer can change arbitration conditions by mailing a notice to workers.

That's nothing new, which is one reason the U.S. Second Circuit Court of Appeals said its summary order had no precedential effect in Weiss v. Macy's Retail Holdings.

But the appeals court did tell Macy's to clean up its description of arbitration as a "benefit," which is why it made the news.

Not a "Benefit"

David Weiss had worked for Macy's in Yonkers for 18 years, when a new manager fired him. Weiss sued, saying the manager harassed him and refused to accommodate his disability.

Macy's filed a motion to compel arbitration, based on a form agreement the company said it had mailed to Weiss. The judge denied the motion, saying an opt-out term was "counterintuitive, ambiguous and misleading."

On appeal, the Second Circuit reviewed the disputed portion of the contract and vacated the trial court's decision.

"Although the somewhat disingenuous references to the 'benefits' of arbitration might better have been avoided, and Macy's would do well to remove the word 'benefits' in the future, neither this unfortunate choice of words nor the remainder of the form renders its meaning incapable of being readily understood," the appeals panel said.

"Somewhat Disingenuous"

However, that was not the end of it. The appeals court sent the case back to the trial judge to figure out whether Weiss actually received the form agreement.

The Second Circuit said it had seen the issue before on "nearly identical facts" in Manigault v. Macy's East. That was also a summary order.

But while New York has a mailing presumption, the judges said, Weiss had rebutted it with enough evidence for trial. He had opposed the motion with declarations that said he never received the documents.

"Because Weiss cannot be bound by an offer to agree to arbitrate that he did not receive, we conclude that a remand is appropriate to determine whether Weiss received the documents," the Second Circuit said.

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