North Carolina District Court Dismisses Action Where Plaintiff Had Full and Fair Opportunity to Pursue Claim Through Arbitration

This case arose out of a dispute between the plaintiff and his former employer American National Red Cross for incorrect calculation of lost wages and health insurance premiums.

The plaintiff was hired by the Red Cross in February 2015 and terminated in September 2017. As a member of the Teamsters Local 71 union, the plaintiff brought a grievance against the Red Cross, which was submitted to arbitration pursuant to the collective bargaining agreement between the union and the Red Cross.

After two arbitration hearings in May 2018, the arbitrator awarded the plaintiff reinstatement to his job as well as lost wages and benefits. Months later, the arbitrator clarified her ruling stating that the award included actual overtime earnings before the plaintiff’s termination. The parties agreed on the amounts to be paid in accordance with the arbitration award.

In November 2019, the plaintiff filed a complaint in North Carolina state court alleging that the arbitration award was miscalculated, and the Red Cross owed him additional compensation for additional wages and out-of-pocket medical expenses. The state court dismissed the complaint on the grounds that the arbitrator retained jurisdiction over the subject matter. The plaintiff requested the arbitrator reopen the matter, and the arbitrator subsequently declined to award any additional compensation, since the parties agreed to the terms of the award and the Red Cross had paid accordingly. After another failed attempt at initiating suit in state court, the plaintiff filed a complaint against the Red Cross in the U.S. District Court for the Western District of North Carolina for the incorrect calculation of lost wages and health insurance premiums.

The Red Cross moved to dismiss the complaint. The magistrate judge recommended that the motion be granted, finding that a valid arbitration agreement existed between the union and the Red Cross and that the disputed issue regarding miscalculation of the award was within the scope of the agreement. The magistrate judge also found that the plaintiff was collaterally estopped from pursuing his claim in federal court because, through his union representative, the plaintiff had a full and fair opportunity to pursue his claim under the collective bargaining agreement through arbitration. The magistrate judge emphasized that the arbitrator’s decision was final — she decided in the plaintiff’s favor and refused to reopen the proceeding because the parties agreed on the calculation of the award and the plaintiff actually received the award.

The magistrate judge’s report and recommendation was adopted, and the Red Cross’ motion to dismiss was ultimately granted.

Fonseca v. American National Red Cross, No. 3:20-cv-00526 (W.D.N.C. Feb. 1, 2021), report and recommendation adopted, No. 3:20-cv-00526 (W.D.N.C. Feb. 17, 2021).