Total Articles: 23
Arbitration Agreement in Employment Application Unconscionable, Unenforceable, California Court Rules
A provision in an employment application requiring the applicant, but not the employer, to submit all disputes to arbitration was both procedurally and substantively unconscionable, and therefore unenforceable, the California Court of Appeal, Third Appellate District, has ruled. Wisdom v. AccentCare, Inc., No. C065744 (Cal. Ct. App. Jan. 3, 2012). The agreement was procedurally unconscionable, the Court said, because the trial court found the plaintiff-applicants had no opportunity to negotiate its terms, the applicable arbitration rules were not provided, and the employer did not explain the agreement’s meaning. The agreement also was substantively unconscionable because, unlike the applicant, the employer was not bound to submit claims to arbitration. Consequently, the appellate court affirmed the order denying arbitration.
California Supreme Court to Revisit Arbitration Ruling
The U.S. Supreme Court in November ordered the California Supreme Court to revisit its decision in Sonic-Calabasas A v. Moreno. So, the California Supreme Court just issued the following order:
Court of Appeal Holds Arbitration Agreement Invalid
Yes, again.This time, the court refused to enforce an arbitration agreement that was included in an application form. (Don't do this). The key issues for the court were (1) that the agreement was written in the first person so as to suggest it was one-way (2) that the agreement referenced the AAA arbitration rules, but did not attach them to the agreement (3) that there was no language explaining that "binding arbitration" means you give up the right to trial in court and (4) that the agreement was "take it or leave it."
California Court Finds Labor Law Loophole In U.S. Supreme Court’s Arbitration Ruling
Employee arbitration agreements must be carefully drafted in California, because courts scrutinize them and often refuse to enforce them when they find “unfair” provisions. For example, California courts do not typically enforce “class action waivers” whereby employees signing arbitration agreements. forfeit the right to participate in class action claims. Will this change in light of the U.S. Supreme Court’s recent decision in AT&T Mobility LLC v. Concepcion? Maybe not, as we saw in a new California appellate court case, Brown v. Ralphs Grocery Store Co.
California Appellate Court Strikes Arbitration Agreement in Employee Handbook as Unconscionable
Reversing an order compelling arbitration, the California Court of Appeal has held that an arbitration agreement in an employee handbook was unconscionable because it was a contract of adhesion, failed to give adequate notice of the arbitration rules that will apply, and lacked mutuality. Thus, the Court held that the agreement was unenforceable and ordered the trial court to vacate its order compelling arbitration.
BE WARY ABOUT WAIVERS IN ARBITRATION AGREEMENTS
California courts profess to favor arbitration as a means to resolve disputes, including those between employers and employees. When an employer enters into an arbitration agreement with an employee, the employer is generally looking for a lower cost, faster, and more informal method of resolving disputes that does not involve the unpredictability of a jury.
Arbitration Agreement Update Employee Entitled to Labor Commissioner Hearing Despite Signing Arbitration Agreement.
In recent case titled Sonic-Calabasas A Inc. v. Moreno, the California Supreme Court considered whether employers may require employees to submit wage and hour claims to binding arbitration rather than the state’s Labor Commissioner.
California Supreme Court Rules That Arbitration Agreements May Not Preclude Employees’ Right to An Administrative Hearing
In a 4-3 decision, the California Supreme Court ruled that arbitration agreements between employers and employees are not enforceable to the extent that they require employees to arbitrate their wage claims before they have a non-binding administrative hearing before the State Labor Commissioner (known as a “Berman” hearing). The state high court held that any preclusion of an employee’s right to a Berman hearing violates public policy and is, therefore, unconscionable, and that the court’s holding was not preempted by the Federal Arbitration Act (FAA)
California Supreme Court Holds No Arbitration in Lieu of Labor Commissioner Hearing
The California Supreme Court decided that an employer cannot require an employee to go to arbitration instead of a "Berman" hearing before the Labor Commissioner.
Arbitration Fail: Employer Who Should Have Handed Out Arbitration Rule Book Now Faces A Jury
Over the years courts have scrutinized the terms of employer/employee arbitration agreements, sometimes finding certain terms to be too unfair to the employee. Formulating enforceable terms of an employer-employee arbitration agreementthat is, an agreement that the courts will agree to upholdhas been very challenging. A recent California appellate court case titled Trivedi v. Curexo Technology Corporation addressed the question of whether presenting an arbitration agreement referencing AAA rules, without including a copy of the rules, was so unfair as to void the agreement.
California Court Rules Arbitration Agreement Unconscionable, Company Didn't Give Employee AAA Rules
Showing continued hostility toward employee arbitration agreements, the California Court of Appeal has struck down as unconscionable an arbitration agreement because the employer failed to provide the high-level employee a copy of the arbitration rules referenced in the agreement.
California Supreme Court Clarifies Scope of Judicial Review of Awards Affecting Unwaivable Statutory Employment Claims and FAA Preemption of Administrative Adjudication
On April 26, 2010, the California Supreme Court ruled that an arbitration award may be vacated when the arbitrator makes a clear error of law which deprives an individual of a hearing on the merits of an unwaivable statutory employment claim. The Supreme Court separately held that arbitration agreements covered by the Federal Arbitration Act ("FAA") may lawfully restrict employees from seeking administrative adjudication of claims under California's Fair Employment and Housing Act ("FEHA").
The Continuing Saga of Mandatory Employment Arbitration Agreements in California.
On April 26, the California Supreme Court issued a decision providing useful clarification to employers intending to revise or enforce existing mandatory arbitration agreements. In summary, the court ruled that: (1) clear error of law will serve as a basis for vacating an arbitrators award where the error deprives an employee of a hearing on the merits of their Fair Employment and Housing Act (FEHA) claims or other unwaivable statutory claims; (2) arbitration agreements may lawfully preclude employees from pursuing administrative adjudication of their state law claims; and (3) in FEHA cases, the Supreme Courts prior holding in Armendariz v. Foundation Health Psychcare Services, Inc. requires that arbitrators state reasons for their written decisions in sufficient detail to provide a meaningful basis for judicial review mere written conclusions are not enough.
Arbitration Update: California Court Trashes Waste Disposal Companys Arbitration Agreement.
A California appellate court has refused to enforce an employer/employee arbitration agreement in a wage and hour class action involving meal and rest periods.
Class Action Waiver in Arbitration Agreement is Not Enforceable .
In another important case affecting the use and application of arbitration agreements in the employment setting, the California Court of Appeal recently ruled that a provision in an employment arbitration agreement waiving the employees right to pursue a class action was unenforceable.
California Court of Appeals Holds that Employers Arbitration Agreement with a Class Action Waiver Is Invalid.
A recent decision by a California Court of Appeal emphasizes the importance of a valid arbitration agreement between employers and employees. In Murphy v. Check N Go (10/17/2007), the Court of Appeal affirmed the trial courts decision to deny an employers motion to compel arbitration based upon an unconscionable arbitration agreement. Importantly, the Court of Appeal determined that the class action waiver provision of the agreement was unconscionable.
California Supreme Court Restricts Class Action Waivers In Employment Arbitration Agreements (scroll down).
In Gentry v. Superior Court, the California Supreme Court reversed an appellate courts denial of a writ of mandate upholding a class arbitration waiver, and held that employment arbitration agreements containing class action waivers are unenforceable if class arbitration would be a significantly more effective way of vindicating employees rights than individual arbitration.
Undermining Arbitration.
The California Supreme Court's Aug. 30 decision in Gentry v. Superior Court tightens the courts' reins on "pre-dispute" agreements to arbitrate employment law claims. A pre-dispute arbitration agreement, by definition, is one to which the parties agree before any dispute between them has arisen.
California Supreme Court Restricts Class Action Waivers In Employment Arbitration Agreements (scroll down).
In Gentry v. Superior Court, the California Supreme Court reversed an appellate courts denial of a writ of mandate upholding a class arbitration waiver, and held that employment arbitration agreements containing class action waivers are unenforceable if class arbitration would be a significantly more effective way of vindicating employees rights than individual arbitration.
Law Firms Own Arbitration Policy Found Unconscionable (scroll down).
In Davis v. OMelveny & Myers LLP, the Ninth Circuit Court of Appeals held that a law firms arbitration program covering all employees of the firm is unenforceable under California law because it is procedurally and substantively unconscionable.
California Court of Appeal Validates Arbitration Agreement Covering Claims for Unpaid Bonus and Severance.
Does the Federal Arbitration Act preempt claims for unpaid wages under California law?
Can Employees Waive Class-Action Arbitration Agreements.
Employers understand employment litigation in court entails expense, delay, and uncertainty. Seeking to avoid a jurys evaluation of workplace decisions, some employers have turned to alternative dispute resolution programs (called ADR). ADR can involve internal complaint procedures, mediation, and arbitration. In principle, both employers and employees can benefit from the faster and less formal procedures associated with ADR.
Initiation of Pre-Arbitration Procedures Do Not Satisfy Exhaustion Requirement.
Discusses Swiderski v. Milberg, Wise, Bershad, Hines & Lerach, LLP, 2001 Daily Journal D.A.R. 13047 (Cal.App. 4th Dist., Div 1, Dec. 18, 2001), in which the court dismissed a wrongful termination based on an arbitration agreement.
