Justia Arbitration & Mediation Opinion Summaries

Annalycia Jenkins, a former employee of Dermatology Management, LLC, filed a class action lawsuit against her employer after resigning. She alleged unfair competition, and the employer sought to compel arbitration based on an agreement Jenkins signed on her first day of work. The trial court denied the motion to compel arbitration, finding the agreement both procedurally and substantively unconscionable.The San Luis Obispo County Superior Court found the arbitration agreement substantively unconscionable due to its lack of mutuality, shortened statute of limitations, unreasonable discovery restrictions, and requirement for the parties to equally share the arbitrator’s fees and costs. Procedurally, the court noted the agreement was a contract of adhesion, pre-signed by the employer months before Jenkins was hired, and presented to her on a take-it-or-leave-it basis without the presence of the Chief People Officer.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case de novo and affirmed the lower court’s decision. The appellate court agreed that the arbitration agreement was procedurally unconscionable due to the inequality of bargaining power and the pre-signed nature of the agreement. It also upheld the finding of substantive unconscionability, noting the lack of mutuality, the unreasonable one-year statute of limitations, the unfair cost-sharing provision, and the restrictive discovery terms. The court concluded that the trial court did not abuse its discretion in refusing to sever the unconscionable provisions, as doing so would condone an illegal scheme and incentivize employers to draft one-sided agreements. The order denying the motion to compel arbitration was affirmed. View "Jenkins v. Dermatology Management, LLC" on Justia Law

Stephnie Trujillo filed a complaint against her former employer, J-M Manufacturing Company (JMM), and four former coworkers, alleging unlawful sexual/gender discrimination, harassment, failure to prevent such actions, retaliation, and seeking injunctive relief. The parties negotiated and entered into a post-dispute stipulation for arbitration, which was approved by the trial court. Arbitration commenced, and JMM paid the arbitrator’s invoices for over a year. However, JMM failed to pay an invoice by the due date of September 12, 2022, but paid it immediately upon being reminded on October 18, 2022. Trujillo then sought to withdraw from arbitration under California Code of Civil Procedure section 1281.98, which the trial court granted.The Superior Court of Los Angeles County granted Trujillo’s motion to withdraw from arbitration, finding that JMM’s late payment constituted a material breach under section 1281.98, which does not allow exceptions for inadvertent delays or lack of prejudice. The court lifted the stay on trial court proceedings, allowing the case to proceed in court.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. The court held that section 1281.98 did not apply because the parties entered into a post-dispute stipulation to arbitrate, not a pre-dispute arbitration agreement. Additionally, JMM was not considered the “drafting party” as defined by section 1280, subdivision (e), which refers to the company that included a pre-dispute arbitration provision in a contract. The appellate court reversed the trial court’s order and remanded with instructions to deny Trujillo’s motion to withdraw from arbitration and to reinstate the stay of trial court proceedings pending completion of arbitration. View "Trujillo v. J-M Manufacturing Co., Inc." on Justia Law

Edgar Gonzalez worked for Nowhere Santa Monica, one of ten related LLCs operating Erewhon markets in Los Angeles. As a condition of his employment, he signed an arbitration agreement with Nowhere Santa Monica. Gonzalez later filed a class action lawsuit against all ten Nowhere entities, alleging various Labor Code violations. He claimed that all entities were his joint employers, sharing control over his employment conditions.The Superior Court of Los Angeles County granted the motion to compel arbitration for Nowhere Santa Monica but denied it for the other entities, finding no evidence that Gonzalez's claims against the non-signatory entities were intertwined with his claims against Nowhere Santa Monica. Gonzalez then dismissed his complaint against Nowhere Santa Monica, and the other entities appealed.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that Gonzalez was equitably estopped from avoiding arbitration with the non-Santa Monica entities because his claims against them were intimately founded in and intertwined with his employment agreement with Nowhere Santa Monica. The court reasoned that Gonzalez's joint employer theory inherently linked his claims to the obligations under the employment agreement, which contained an arbitration clause. Therefore, it would be unfair for Gonzalez to claim joint employment for liability purposes while denying the arbitration agreement's applicability.The appellate court reversed the lower court's order denying the motion to compel arbitration for the non-Santa Monica entities, concluding that all of Gonzalez's claims should be arbitrated. View "Gonzalez v. Nowhere Beverly Hills LLC" on Justia Law

Edgar Gonzalez worked for Nowhere Santa Monica, one of ten related LLCs operating Erewhon markets in Los Angeles. As a condition of employment, Gonzalez signed an arbitration agreement with Nowhere Santa Monica. He later filed a lawsuit against all ten LLCs, alleging various Labor Code violations and claiming they were joint employers. The non-Santa Monica entities moved to compel arbitration based on the agreement with Nowhere Santa Monica, but Gonzalez opposed, arguing they were not parties to the agreement.The Superior Court of Los Angeles County granted the motion to compel arbitration for Nowhere Santa Monica but denied it for the other entities, finding no evidence that Gonzalez's claims against the non-signatory defendants were intertwined with the arbitration agreement. Gonzalez then dismissed his complaint against Nowhere Santa Monica, and the other entities appealed.The California Court of Appeal, Second Appellate District, Division One, reviewed the case. The court held that Gonzalez was equitably estopped from avoiding arbitration with the non-Santa Monica entities because his claims against them were intimately founded in and intertwined with the employment agreement with Nowhere Santa Monica. The court reasoned that Gonzalez's joint employment theory inherently linked his claims to the obligations under the employment agreement, which contained the arbitration clause. Therefore, the court reversed the lower court's order denying the motion to compel arbitration for the non-Santa Monica entities. View "Gonzalez v. Nowhere Beverly Hills LLC" on Justia Law

Stephnie Trujillo filed a complaint against her former employer, J-M Manufacturing Company (JMM), and four former coworkers, alleging unlawful sexual/gender discrimination, harassment, failure to prevent such acts, retaliation, and seeking injunctive relief. The parties negotiated and entered into a post-dispute stipulation for arbitration, which was approved by the trial court. Arbitration commenced, and JMM paid the arbitrator’s invoices timely for over a year. However, JMM paid one invoice late, leading Trujillo to file a motion to withdraw from arbitration under California Code of Civil Procedure section 1281.98, which the trial court granted.The Superior Court of Los Angeles County granted Trujillo’s motion to withdraw from arbitration, finding that JMM’s late payment constituted a material breach under section 1281.98, despite acknowledging that the delay did not prejudice Trujillo. The court lifted the stay on trial court proceedings, allowing the case to proceed in court.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case and reversed the trial court’s decision. The appellate court held that section 1281.98 did not apply because the parties had entered into a post-dispute stipulation to arbitrate, not a pre-dispute arbitration agreement. Additionally, JMM was not considered the “drafting party” as defined by section 1280, subdivision (e), since the stipulation was primarily drafted by Trujillo. The appellate court remanded the case with instructions to deny Trujillo’s motion to withdraw from arbitration and to reinstate the stay of trial court proceedings pending the completion of arbitration. View "Trujillo v. J-M Manufacturing Co., Inc." on Justia Law

Julian Rodriguez, a former employee of Lawrence Equipment, Inc., filed a lawsuit alleging various wage-and-hour violations under the California Labor Code. Rodriguez claimed that Lawrence failed to pay for all hours worked, including overtime, did not provide adequate meal and rest breaks, issued inaccurate wage statements, and did not pay all due wages upon termination. He also sought civil penalties under the Private Attorneys General Act (PAGA). Rodriguez had signed an arbitration agreement with Lawrence, which led to the arbitration of his non-PAGA claims.The Superior Court of Los Angeles County ordered arbitration for Rodriguez’s wage-and-hour claims and stayed the PAGA claim. The arbitrator ruled in favor of Lawrence, finding that Rodriguez failed to prove any of the alleged Labor Code violations. The trial court confirmed the arbitration award and entered judgment for Lawrence. Subsequently, Lawrence moved for judgment on the pleadings, arguing that the arbitration award precluded Rodriguez from pursuing his PAGA claim due to lack of standing as an aggrieved employee. The trial court granted this motion and dismissed the PAGA claim.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that the arbitration award, which found no Labor Code violations, precluded Rodriguez from establishing standing under PAGA. The court applied the doctrine of issue preclusion, determining that the issues litigated in arbitration were identical to those required to establish PAGA standing. Since Rodriguez could not prove any Labor Code violations, he lacked standing to pursue the PAGA claim. The court affirmed the trial court’s judgment of dismissal. View "Rodriguez v. Lawrence Equipment, Inc." on Justia Law

In February 2013, the decedent was admitted to Elmcrest Care Center, suffering from Parkinson’s disease, dysphagia, and dementia. On August 4, 2017, he was found nonresponsive and later died in the hospital. The Estate of Jose de Jesus Ortiz, represented by Ericka Ortiz, filed a civil action against Elmcrest and its staff for elder abuse, neglect, negligence, willful misconduct, and fraud, alleging that their failure to provide necessary care led to his death. The trial court compelled arbitration based on an agreement signed upon the decedent’s admission.The arbitrator issued a First Interim Award on March 30, 2022, finding that the Estate did not meet its burden of proof on any claims. The award allowed for further submissions to address any omitted issues. The Estate requested an amendment, arguing the arbitrator had omitted damages for pre-death loss of dignity. The arbitrator issued a Second Interim Award on May 26, 2022, awarding $100,000 in damages for pre-death pain and suffering. Respondents moved to vacate this award, arguing the First Interim Award was final. The arbitrator denied the motion, stating the First Interim Award was not final and had omitted a necessary issue.The trial court initially denied the Estate’s petition to vacate the First Interim Award, ruling it was not final. However, it later vacated the Final Award and confirmed the First Interim Award, finding the First Interim Award had resolved all necessary issues. The Estate appealed.The California Court of Appeal, Second Appellate District, reversed the trial court’s order, holding that the First Interim Award was not final as it expressly reserved jurisdiction for further proceedings. The court directed the trial court to confirm the Final Award issued on September 30, 2022, which included the damages for pre-death pain and suffering. View "Ortiz v. Elmcrest Care Center, LLC" on Justia Law

A salesperson from Elite Home Remodeling, Inc. visited the home of Harold and Lucy West, both in their 90s and suffering from dementia, to discuss solar panel installation and home renovation. The salesperson, Ilai Mitmiger, allegedly obtained Harold's electronic signature on a loan agreement with Solar Mosaic LLC (Mosaic) through Deon, the Wests' daughter, who provided her email for the documents. The loan agreement was signed electronically in Harold's name within seconds, despite Harold's apparent lack of understanding and technical ability.The Superior Court of Los Angeles County denied Mosaic's petition to compel arbitration, finding that Mosaic failed to prove the existence of an agreement to arbitrate. The court determined that Mosaic did not establish that Harold signed the loan documents or that Deon had the authority to bind Harold to the agreement.The California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court's order. The appellate court held that the evidence presented, including Harold's dementia and lack of technical skills, created a factual dispute about the authenticity of Harold's electronic signatures. The court also found that Mosaic did not prove Deon had the authority to act as Harold's agent or that Harold ratified the agreement during a recorded phone call with Mosaic. The court concluded that the recorded call did not demonstrate Harold's awareness or understanding of the loan agreement, thus failing to establish ratification. The order denying the petition to compel arbitration was affirmed. View "West v. Solar Mosaic, LLC" on Justia Law

Sergio Ramirez, a former police officer, was terminated by the City of Indio Police Department following an internal affairs investigation. Ramirez was initially placed on administrative leave after being charged with rape and sexual assault, though he was later acquitted of all criminal charges. Despite the acquittal, the internal investigation concluded that Ramirez had violated several departmental policies, leading to his termination. Ramirez appealed the decision through the administrative appeal process outlined in the Memorandum of Understanding (MOU) between the City and the Indio Police Officers’ Association.The arbitrator, after a full evidentiary hearing, recommended Ramirez's reinstatement with full back pay and benefits. However, the City Manager upheld the termination, citing Ramirez's poor judgment, dishonesty, and conduct unbecoming of an officer. Ramirez then petitioned the Superior Court of Riverside County for a writ of mandate, arguing that the City Manager should have deferred to the arbitrator's findings on the weight and credibility of the evidence. The Superior Court denied the petition, affirming the City Manager's decision.The Court of Appeal, Fourth Appellate District, reviewed the case and affirmed the lower court's judgment. The court held that the MOU clearly vested the City Manager with the final authority to make disciplinary decisions, including the power to reject the arbitrator's advisory findings. The court found that the City Manager had conducted a thorough review of the arbitrator's recommendations and the evidence before making the final decision. The court also concluded that the administrative appeal process provided Ramirez with due process, as it included notice, an opportunity to respond, and a meaningful hearing. The judgment of the Superior Court was affirmed, upholding Ramirez's termination. View "Ramirez v. City of Indio" on Justia Law

A former employee, Liu, sued her employer, Miniso, alleging various employment-related claims, including sexual harassment, sex discrimination, and wage and hour violations. Liu claimed that she faced severe and pervasive harassment and discrimination based on her sexual orientation and gender identity, and that she was misclassified as an exempt employee, leading to unpaid wages and denied breaks. Liu also alleged that she was retaliated against for refusing to participate in illegal practices and for whistleblowing, which led to her constructive termination.The Superior Court of Los Angeles County denied Miniso's motion to compel arbitration of Liu's claims. Miniso argued that Liu's allegations of sexual harassment were insufficient to state a claim and that the arbitration agreement should be enforced for the non-sexual harassment claims. The trial court found that Liu had adequately stated a claim for sexual harassment and, based on the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), ruled that the arbitration agreement was unenforceable for all of Liu's claims.The California Court of Appeal, Second Appellate District, affirmed the trial court's decision. The appellate court held that under the EFAA, if a plaintiff's case includes at least one claim of sexual harassment, the entire case is exempt from arbitration at the plaintiff's election. The court emphasized that the EFAA's language invalidates arbitration agreements with respect to the entire case, not just the sexual harassment claims. This interpretation avoids the inefficiency of having separate proceedings for different claims and aligns with the legislative intent to protect plaintiffs from being compelled into arbitration for sexual harassment disputes. View "Liu v. Miniso Depot CA, Inc." on Justia Law