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Shields v. General Mills, Inc.

United States District Court, D. Minnesota

January 26, 2018

William Shields, et al., for and in behalf of themselves and other persons similarly situated, Plaintiffs,
General Mills, Inc., Defendant.

          Brent C. Snyder, Craig A. Brandt, Snyder & Brandt, P.A., Lucas J. Kaster, Michelle L. Kornblit, Stephen J. Snyder, Steven Andrew Smith, Nichols Kaster, PLLP, counsel for plaintiffs

          Aaron D. Van Oort, Jeffrey P. Justman, Peter Magnuson, Faegre Baker Daniels LLP, Kathryn Mrkonich Wilson, Marko J. Mrkonich, Susan K. Fitzke, Littler Mendelson, PC, Keith C. Hult, Littler Mendelson, PC, counsel for defendant


          Katherine Menendez United States Magistrate Judge

         The District Court referred the plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction (“Mot.”), ECF No. 109 to this Court for a Report and Recommendation. The Court held a phone conference on January 25, 2018, in which counsel for both sides participated.[1] The defendant, General Mills, Inc., filed a letter brief at the Court's request following that conference. Resp. in Opp., ECF No. 118. For the reasons set forth below, the Court recommends that the motion be denied.


         The issue of the propriety of arbitration in this matter has been the subject of extensive litigation, both in this case and in the closely related McLeod litigation. On January 2, 2018, Judge Davis granted General Mills's Motion to Compel Arbitration on an Individual Basis as to almost all of the plaintiffs in this matter, dismissed one count without prejudice, and stayed the remainder of the litigation pending the completion of the arbitration proceedings. Ord., ECF No. 106. Although only recently issued, Judge Davis's Order was likely not a surprise given that the ruling was compelled by the Eighth Circuit's decision requiring arbitration in the virtually indistinguishable McLeod case. See McLeod v. General Mills, Inc., 856 F.3d 1160, 1166 (8th Cir. 2017) (finding that the plaintiffs in that case signed agreements requiring individual arbitration of their ADEA claims and that General Mills's motion to compel individual arbitration should have been granted). It is against this backdrop of a clear determination that arbitration should proceed that the Court must now consider the plaintiffs' efforts to halt that ongoing process.

         Arbitrator Linda Close

         Beginning last fall, the parties began individual arbitration for plaintiffs from the McLeod litigation. See Snyder Dec., ¶ 10, ECF No. 112. On December 15, 2017, an arbitrator in one of those cases, Ms. Linda Close, issued a written decision in favor of General Mills which included language that praised its business practices. Resp. in Opp. at 12-27. The plaintiffs, prompted either by this positive language or by the unwanted ruling itself, looked for and discovered a connection, arguably a very tenuous one, between Arbitrator Close and General Mills. Snyder Dec., ¶ 11. Specifically, Arbitrator Close's husband previously worked for a non-profit, for a time held a role that required fundraising and General Mills's charitable arm had donated to that nonprofit. Id. Also General Mills's former Chief Marketing Officer, who was noticed as a potential witness, had been a board member for the same nonprofit. Id. Finally, the plaintiffs found photographs indicating that Arbitrator Close and her husband attended a gala that the former Chief Marketing Officer had also attended. Id., ¶ 15.

         Arbitrator Close has been appointed in at least ten yet-to-be-scheduled other arbitrations relating to age-discrimination claims and General Mills. Mem. in Supp. at 4, ECF No. 111. The scheduled arbitration giving rise to the plaintiffs' emergency motion is that of Michael Murray, one of the named plaintiffs in this case. His arbitration is currently scheduled to begin on January 29, 2018. Id.

         AAA Decision Regarding Arbitrator Close's Alleged Bias

         Following their investigation, the plaintiffs filed an objection with the American Arbitration Association (“AAA”), arguing that Arbitrator Close was plainly biased in favor of General Mills and should not be allowed to preside over any further planned arbitrations of age-discrimination claims brought by the plaintiffs in this matter against General Mills. Snyder Dec., ¶ 22, Ex. E. The objection prompted the arbitrator to make a supplemental submission to the AAA describing her complete lack of knowledge as to whether General Mills ever donated to her husband's former employer and suggesting that she had no idea who the chief marketing officer was, much less of his connection to the nonprofit at issue. Id., Ex. F.

         The plaintiffs were unsatisfied by this submission and argued that the AAA should disqualify Arbitrator Close from presiding over the planned age-discrimination arbitrations. Id.. Ex. G. However, the AAA refused to disqualify the arbitrator, finding no violation of the AAA's Administrative Review Council's Review Standards. Id., Ex. L. The plaintiffs “reject[ed] that decision by the Council, ” asserting that it “contradicts the express language of the arbitration provision in these cases” and “has no effect on these proceedings” because the parties never agreed to be subject to the rules upon which the Administrative Review Council relied. Id., Ex. M. Rather, the parties agreed only to be governed by the AAA Employment Arbitration Rules and Mediation Procedures. Id.

         The plaintiffs therefore requested that the AAA postpone the arbitration proceeding scheduled for January 29 and any other similar arbitration proceedings involving this particular arbitrator until the plaintiffs obtained a court ruling on their motions to disqualify her as an arbitrator. Id. In response, the AAA noted the rules allowing it to conclusively decide whether an arbitrator should be disqualified and to “assign the administration of an arbitration to its offices.” Id., Ex. N. The AAA further explained that the Administrative Review Council is one of its administrative offices. Id. Because the AAA's previous determination to affirm the arbitrator's appointment was conclusive and because the plaintiffs did not offer any new reason as grounds for disqualification, the AAA reaffirmed the arbitrator's appointment. Id. The AAA then informed the arbitrator that the plaintiffs sought a postponement to “pursue administrative items in Court” and that General Mills opposed the request. Id. The arbitrator declined to postpone the arbitration proceedings. Id.

         Motion for a Temporary ...

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