Drivers’ Independent Contractor Status beyond Scope of Arbitration Agreement, California Court Rules

Owner-operator truck drivers were not required to arbitrate whether they were misclassified as independent contractors in violation of the California Labor Code, where each of the parties’ arbitration agreements applied to any dispute that arose “with regard to its application or interpretation,” the California Court of Appeal has held. Elijahjuan v. Superior Court, No. B234794 (Cal. Ct. App. Oct. 17, 2012). The Court found the drivers’ statutory claims fell outside of the agreements’ scope and reversed the trial court’s order compelling arbitration. The dissenting Justice took issue with the majority’s narrow reading of the arbitration agreements, noting that it “ignored well-settled law favoring arbitration.”