Justia Arbitration & Mediation Opinion Summaries

Respondent George Zeber filed a workers' compensation claim for cumulative injury sustained during his employment with the New York Yankees from 1968 to 1978. The Workers’ Compensation Appeals Board (WCAB) found Zeber had a compensable injury but deferred any award pending further proceedings, including mandatory arbitration of the insurance coverage dispute. Travelers Indemnity Company (Travelers) disputed the applicability of mandatory arbitration, arguing it only applies to injuries occurring on or after January 1, 1994, while Zeber's injury occurred no later than 1978.The Workers’ Compensation Judge (WCJ) found Zeber sustained an injury during his employment but deferred findings on permanent disability and other issues. The WCJ also found the statute of limitations did not bar Zeber’s claim, as he only became aware of his right to file a claim in 2017 or 2018. The WCJ determined the New York Yankees had insurance coverage provided by Travelers and noted that disputes involving the right of contribution must be sent to arbitration. Travelers filed for reconsideration, which the WCAB partially granted, amending the WCJ’s decision to defer the insurance coverage issue to mandatory arbitration.The California Court of Appeal, Fourth Appellate District, reviewed the case. The court concluded that section 5275, subdivision (a)(1) applies only to injuries occurring on or after January 1, 1990. The WCJ had not made a finding on the date of injury for purposes of section 5275. The court annulled the WCAB’s decision and remanded the case for further proceedings, including a determination of the date of injury for the purposes of mandatory arbitration. The court emphasized that the "date of injury" for cumulative injuries should be determined under section 5412, which considers when the employee first suffered disability and knew or should have known it was work-related. View "Travelers Indemnity Co. v. Workers' Compensation Appeals Bd." on Justia Law

Edgar Osuna sued Spectrum Security Services, Inc., alleging violations of the California Labor Code. He brought five individual and class claims, and a sixth representative claim under the Labor Code Private Attorneys General Act of 2004 (PAGA). The trial court dismissed Osuna’s class claims, sent his individual claims to arbitration, and sustained Spectrum’s demurrer to his PAGA claim without leave to amend. The court concluded that Osuna lacked standing to bring the PAGA claim because he did not suffer a Labor Code violation within the one-year statute of limitations for recovering civil penalties.The trial court’s decision was based on the interpretation that Osuna needed to have suffered a violation within the one-year period before filing his PAGA notice. Osuna appealed, arguing that he is an aggrieved employee with standing to assert a representative PAGA claim because he suffered Labor Code violations during his employment with Spectrum.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case. The court concluded that the trial court erred in its interpretation of the standing requirements under PAGA. The appellate court held that to have standing under PAGA, an employee must have been employed by the alleged violator and suffered at least one Labor Code violation, regardless of whether the violation occurred within the one-year statute of limitations for recovering civil penalties. The court emphasized that the statute of limitations is an affirmative defense and does not affect standing.The appellate court reversed the portion of the trial court’s order sustaining Spectrum’s demurrer to Osuna’s representative PAGA claim and remanded the case for further proceedings consistent with its opinion. View "Osuna v. Spectrum Security Services, Inc." on Justia Law

Mone Yvette Sanders filed a class and representative action against her former employer, Edward D. Jones & Co., L.P., alleging wage and hour claims under the Labor Code and a cause of action under the Private Attorneys General Act of 2004 (PAGA). The trial court granted Edward Jones’s motions to compel arbitration of Sanders’s individual Labor Code and PAGA claims and stayed the representative PAGA cause of action pending arbitration. Sanders initiated arbitration, but Edward Jones failed to pay $54,000 in fees within 30 days as required by Code of Civil Procedure section 1281.98. Sanders then moved to vacate the order compelling arbitration and proceed in court.The trial court initially granted Sanders’s motion, finding section 1281.98 was not preempted by the Federal Arbitration Act (FAA). However, after Edward Jones submitted new authority, the court reconsidered and denied Sanders’s motion, concluding section 1281.98 was preempted by the FAA. Sanders filed a petition for writ of mandate.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the case. The court held that section 1281.98, which allows an employee to withdraw from arbitration if the employer fails to pay fees within 30 days, is not preempted by the FAA. The court found that section 1281.98 furthers the FAA’s goal of expeditious arbitration and does not undermine the FAA’s objectives. The court also determined that the trial court, not the arbitrator, should decide whether there has been a default under section 1281.98.The Court of Appeal granted Sanders’s petition for writ of mandate, directing the trial court to vacate its order denying Sanders’s motion to withdraw from arbitration and allowing her to pursue her claims in court. The trial court was also instructed to consider Sanders’s motion for sanctions under section 1281.99. View "Sanders v. Superior Court" on Justia Law

Mone Yvette Sanders filed a class and representative action against her former employer, Edward D. Jones & Co., L.P., alleging wage and hour claims under the Labor Code and a cause of action under the Private Attorneys General Act (PAGA). The trial court granted Edward Jones's motions to compel arbitration of Sanders's individual claims and stayed the representative PAGA cause of action. Sanders initiated arbitration, but Edward Jones failed to pay $54,000 in fees within 30 days as required by California Code of Civil Procedure section 1281.98. Sanders then moved to vacate the order compelling arbitration and proceed in court.The trial court denied Sanders's motion, finding section 1281.98 preempted by the Federal Arbitration Act (FAA). Sanders filed a petition for writ of mandate, and the Court of Appeal issued an order to show cause.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the case. The court held that section 1281.98 is not preempted by the FAA, as it furthers the goal of expeditious arbitration. The court also rejected Edward Jones's contention that the arbitration agreement required the arbitrator to decide whether Edward Jones was in default. The court found that section 1281.98 vests the employee with the unilateral right to withdraw from arbitration and proceed in court upon the drafting party's failure to timely pay fees. The court concluded that the trial court erred in denying Sanders's motion to vacate the order compelling arbitration and granted the petition for writ of mandate. The case was remanded for further proceedings consistent with this opinion, including consideration of Sanders's request for monetary sanctions. View "Sanders v. Superior Court" on Justia Law

The Los Angeles College Faculty Guild, AFT Local 1521, sought to reverse the trial court’s denial of its motion to compel arbitration of three grievances against the Los Angeles Community College District. The grievances involved safety-related construction projects at Los Angeles City College, the termination of a faculty member at Pierce College, and the miscalculation of retirement benefits for a faculty member at Los Angeles Trade-Technical College.The Superior Court of Los Angeles County partially granted the motion to compel arbitration for the grievance related to backpay for the retirement benefits issue but denied the motion for the other grievances. The court found that the grievances were beyond the scope of the collective bargaining agreement and were preempted by the Education Code and other statutory requirements.The Court of Appeal of the State of California, Second Appellate District, Division Eight, affirmed the trial court’s decision. The appellate court held that the grievances related to construction projects and employment termination were not arbitrable because they were preempted by the Education Code and the Construction Bonds Act. The court also found that the grievance related to retirement benefits was partially arbitrable only concerning the backpay issue, as the Public Employees’ Retirement Law governed the reporting of service credits to CalPERS, and the arbitrator could not order injunctive relief beyond the scope of the collective bargaining agreement.The appellate court concluded that the Guild failed to demonstrate that the grievances were within the scope of representation as enumerated by the Educational Employment Relations Act and affirmed the trial court’s mixed ruling. View "L.A. College Faculty Guild v. L.A. Community College District" on Justia Law

Several hair stylists filed a lawsuit against their employer, Lady Jane’s Haircuts for Men, alleging that they were underpaid due to being misclassified as independent contractors instead of employees. This misclassification, they argued, allowed the employer to avoid the Fair Labor Standards Act’s minimum-wage and overtime-pay requirements. The employer moved to dismiss the lawsuit, citing an arbitration agreement in the Independent Contractor Agreement, which required disputes to be resolved through the American Arbitration Association (AAA) under its Commercial Arbitration Rules.The United States District Court for the Eastern District of Michigan reviewed the case and found the arbitration agreement enforceable but severed the cost-shifting provision, which required the stylists to pay arbitration costs exceeding their yearly income. The court ruled that the arbitration would proceed under the less costly AAA employment rules and dismissed the lawsuit in favor of arbitration.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court’s decision. The appellate court held that the severability clause in the contract allowed the court to remove the cost-shifting provision while enforcing the rest of the arbitration agreement. The court found that the term “provision” in the severability clause referred to individual clauses within the contract, not entire sections. The court also rejected the stylists’ arguments that the district court had impermissibly reformed the contract and that the arbitration agreement should be unenforceable for equitable reasons. The court concluded that the district court correctly severed the cost-shifting provision and enforced the arbitration agreement under the AAA’s employment rules. View "Gavin v. Lady Jane's Haircuts for Men" on Justia Law

Kassandra Memmer sued her former employer, United Wholesale Mortgage (UWM), alleging discrimination and sexual harassment during her employment. UWM moved to dismiss the lawsuit and compel arbitration based on the employment agreement. Memmer argued that the arbitration agreement was invalid and that she had the right to go to court under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA).The United States District Court for the Eastern District of Michigan granted UWM's motion to dismiss and compel arbitration, concluding that the parties had a valid arbitration agreement. The court did not address Memmer's argument regarding the applicability of EFAA. Memmer appealed the decision, asserting that EFAA should apply to her case.The United States Court of Appeals for the Sixth Circuit reviewed the case and concluded that EFAA applies to claims that accrue after its enactment date and to disputes that arise after that date. The court determined that the district court had not applied the correct interpretation of EFAA. The Sixth Circuit reversed the district court's decision and remanded the case for further proceedings to determine when the dispute between Memmer and UWM arose and whether EFAA applies to her claims. View "Memmer v. United Wholesale Mortgage, LLC" on Justia Law

Plaintiffs Charles and Grant Adler, through their business entity CM Adler LLC, distributed tortillas and other food products of Defendant Gruma Corporation to grocery stores in central New Jersey under a "Store Door Distributor Agreement" (SDDA). When Defendant terminated the relationship, Plaintiffs filed a lawsuit alleging retaliatory termination due to their organizing efforts with other distributors. Plaintiffs claimed violations of state and federal labor laws, including failure to pay minimum wages and unlawful deductions, and argued that the SDDA was a franchise agreement subject to New Jersey's Franchise Practices Act, which forbids termination without cause.The United States District Court for the District of New Jersey dismissed the case, concluding that Texas law governed under the SDDA and the case should proceed to arbitration. The District Court did not address the applicability of the Federal Arbitration Act (FAA) or Plaintiffs' exemption argument under 9 U.S.C. § 1. It found the parties had contracted for Texas law, under which the arbitration agreement was enforceable, and rejected Plaintiffs' bid to apply New Jersey law instead. The District Court also decided that Charles and Grant Adler, who did not sign the contract, were estopped from challenging its arbitration provision because they acted as parties to the contract when they performed the LLC’s work.The United States Court of Appeals for the Third Circuit reviewed the case and concluded that the FAA does not apply to the SDDA because Plaintiffs are transportation workers engaged in interstate commerce. The Court of Appeals found that the District Court erred in its choice-of-law analysis by failing to consider the impact of New Jersey public policies on its arbitrability ruling. The Court of Appeals vacated the order compelling arbitration and remanded for the District Court to complete the choice-of-law analysis under the correct framework and to reevaluate whether the individual Plaintiffs, who did not sign the arbitration agreement, are bound by its terms. View "Adler v. Gruma Corporation" on Justia Law

Billy Ford worked as a full-time security guard for Parkwest Casino Lotus from September 2018 to December 2021. Upon hiring, Ford signed an arbitration agreement that excluded claims for workers' compensation, unemployment compensation, certain administrative complaints, ERISA claims, and "representative claims under [PAGA]." In February 2022, Ford filed a complaint against Parkwest under PAGA, alleging Labor Code violations, including mandatory off-the-clock health screenings and inaccurate wage statements. Parkwest moved to compel arbitration of Ford's individual PAGA claims and to dismiss the representative PAGA claims, citing Viking River Cruises, Inc. v. Moriana.The Superior Court of Sacramento County denied Parkwest's motion to compel arbitration, finding that the arbitration agreement specifically excluded all PAGA claims. Parkwest appealed, arguing that the agreement was ambiguous regarding the exclusion of individual PAGA claims and that such ambiguity should be resolved in favor of arbitration.The Court of Appeal of the State of California, Third Appellate District, reviewed the case. The court concluded that the arbitration agreement unambiguously excluded all PAGA claims, including individual claims. The court reasoned that the language of the agreement and the circumstances under which it was executed indicated that the parties intended to exclude all PAGA claims from arbitration. The court affirmed the trial court's order denying Parkwest's motion to compel arbitration. View "Ford v. The Silver F" on Justia Law

Michele Cornelius sued CVS Pharmacy Inc., New Jersey CVS Pharmacy, L.L.C., and her former supervisor, Shardul Patel, alleging a hostile work environment. Cornelius claimed that Patel targeted her with negative treatment because she is a woman, including denying her promotions, overworking her, and undermining her relationships with employees. Despite her multiple complaints to CVS, no action was taken against Patel. Cornelius resigned in October 2021, but Patel did not respond, and she was subsequently fired on November 4, 2021.The United States District Court for the District of New Jersey granted CVS's motion to compel arbitration and dismissed Cornelius's complaint. The court concluded that Cornelius's claims were not protected from arbitration under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) because her hostile work environment claim did not constitute a "sexual harassment dispute." The court also found that Cornelius and CVS had entered into a valid arbitration agreement and that the agreement was not unconscionable.The United States Court of Appeals for the Third Circuit reviewed the case. The court agreed with the District Court that the EFAA did not cover Cornelius's claims but reached this conclusion on different grounds, determining that her dispute arose before the EFAA's effective date of March 3, 2022. However, the Third Circuit found that the District Court abused its discretion by not considering whether discovery was necessary before deciding that Cornelius and CVS had a valid agreement to arbitrate. Consequently, the Third Circuit affirmed in part, vacated the judgment, and remanded the case to the District Court for further proceedings, including consideration of whether discovery on the validity of the arbitration agreement was warranted. View "Cornelius v. CVS Pharmacy Inc" on Justia Law