Justia Arbitration & Mediation Opinion Summaries

This case involves a dispute over an arbitration agreement between an employee and her employer. The employee, Aljarice Hasty, was employed by the American Automobile Association of Northern California, Nevada & Utah (Association). After her employment ended, Hasty sued the Association for race discrimination, disability discrimination, retaliation, harassment, wrongful discharge, and retaliation. The Association sought to compel arbitration per an agreement in Hasty's employment contract, but the trial court found the arbitration agreement was unconscionable and declined to sever the unconscionable terms. The Association appealed this decision.The Court of Appeal of the State of California Third Appellate District affirmed the trial court’s decision. The court found the arbitration agreement to be both procedurally and substantively unconscionable. Procedural unconscionability was found due to the adhesive nature of the agreement, the lack of negotiation, and the hidden nature of the unconscionable provision within the complex document. Substantive unconscionability was found due to the agreement's one-sided nature, the overly broad confidentiality provision, and the waiver of the employee's right to bring representative actions under the Private Attorneys General Act of 2004. The court also found that the trial court did not abuse its discretion by refusing to sever the unconscionable terms, as the arbitration agreement was permeated with unconscionability. View "Hasty v. American Automobile Assn. of Northern Cal., Nev. & Utah" on Justia Law

In this class action case, Nicole DeMarinis and Kelly Patire, current and former employees of Heritage Bank of Commerce, brought a case under the California Private Attorneys General Act of 2004 (PAGA) against Heritage Bank for wage and hour and other Labor Code violations. The Court of Appeal of the State of California First Appellate District Division Three affirmed the trial court’s decision, rejecting Heritage Bank’s argument to compel arbitration of plaintiffs’ individual PAGA claims based on a waiver in their arbitration agreement.In the agreement, the plaintiffs had waived their right to bring any claims against each other in any class or representative proceeding. The bank argued that the denial of arbitration was erroneous because the waiver provision was enforceable, pertaining only to plaintiffs’ nonindividual PAGA claims. The court, however, found that the provision violated public policy as it required plaintiffs to completely abandon their right to bring both individual and nonindividual PAGA claims in any forum.The court also found that the waiver provision's nonseverability clause and a "poison pill" provision, which stated that if the waiver provision is found unenforceable, then the entire arbitration agreement is null and void, precluded severance of the unenforceable nonindividual PAGA claims waiver. Consequently, the court concluded that the unenforceability of the waiver provision rendered the entire arbitration agreement null and void, thereby affirming the trial court's decision denying the motion to compel arbitration. View "DeMarinis v. Heritage Bank of Commerce" on Justia Law

In the case involving the Restaurant Law Center and the New York State Restaurant Association against the City of New York and the Commissioner of the City’s Department of Consumer and Worker Protection, the plaintiffs challenged a New York City law prohibiting the wrongful discharge of fast-food restaurant employees. The plaintiffs argued that the law was preempted by federal law and violated the dormant Commerce Clause of the United States Constitution.The United States Court of Appeals for the Second Circuit affirmed the decision of the United States District Court for the Southern District of New York, which had granted the defendants’ motions for summary judgment. The appellate court concluded that the city's Wrongful Discharge Law did not violate federal law nor the United States Constitution.The court held that New York’s Wrongful Discharge Law was not preempted by the National Labor Relations Act (NLRA) because it established minimum labor standards that regulated the substance, rather than the process, of labor negotiations. The court also held that the law did not violate the dormant Commerce Clause of the U.S. Constitution, which acts as a safeguard against economic protectionism. The court found that the law did not discriminate against interstate commerce either on its face, in its purpose, or in its practical effect. View "Restaurant Law Center v. City of New York" on Justia Law

Plaintiff is a foreign worker hired by defendant Alco Harvesting LLC to work at farms owned by defendant and appellant Betteravia Farms. He later brought employment claims against appellants. Alco moved to compel arbitration pursuant to an arbitration agreement presented to and signed by Plaintiff at his orientation. The trial court found the agreement void and denied the motion. It considered arbitration a “material term and condition” of Plaintiff’s employment and as such, a job requirement that Alco should have disclosed during the H-2A certification process.   The Second Appellate District affirmed. The court explained that Alco’s arbitration agreement required Plaintiff to forfeit his right to a jury trial in “any claim, dispute and/or controversy that [any] Employee may have against the Company . . . arising from, relating to or having any relationship or connection whatsoever with [or to the] Employee’s . . . employment by, or other association with the Company . . . .” The arbitration agreement also prohibited him from participating in any class action claims against Alco. Thus, the court considered the relinquishing of these rights as “material terms and conditions” of his employment. View "State of Cal. v. Alco Harvest" on Justia Law

Lai, an engineer, had access to Applied’s trade secrets and participated in highly confidential meetings. Mattson, Applied's direct competitor, recruited 17 Applied employees. Lai accepted a job with Mattson. Before his last day at Applied, Lai accessed proprietary information from Applied’s cloud-based storage system and sent e-mails attaching highly confidential Applied documents—many clearly marked as such—to his personal email accounts. He signed a separation certificate stating he had not retained any Applied information and confirmed this in two exit interviews. After starting his new job, Lai logged into his personal email accounts on his Mattson computer. Lai claims never disclosed any Applied information to Mattson. Mattson denies any knowledge of Lai’s actions.Applied sued Mattson and Lai, citing the Uniform Trade Secrets Act (Civ. Code 3426) and breach of Lai’s employment agreement. Lai then deleted the emails he had sent to one account, and, after communicating with Mattson’s lawyers, downloaded a confidential Applied document to his Mattson laptop, deleting it a moment later. Mattson put Lai on leave. cut off his access to his personal email accounts. and sequestered his iPhone and computers. The defendants moved to compel arbitration based on a provision in the Applied-Lai employment contract. The court of appeal affirmed a preliminary injunction prohibiting the defendants from accessing or using Applied’s confidential information and an order compelling arbitration as to Lai. Mattson, a non-party, is not entitled to arbitration. The litigation should be stayed pending arbitration. View "Mattson Technology, Inc. v. Applied Materials, Inc." on Justia Law

Consolidated appeals arose from an employment dispute between Dr. Margot Potter and her former employer, Women's Care Specialists, P.C. ("Women's Care"), and out of a dispute between Potter and three Women's Care employees: Dr. Karla Kennedy, Dr. Elizabeth Barron, and Beth Ann Dorsett ("the WC employees"). In case no. CV-21-903797, Potter alleged claims of defamation, tortious interference with a business relationship, and breach of contract against Women's Care. In case no. CV-21-903798, Potter alleged claims of defamation and tortious interference with a business relationship against the WC employees. After the cases were consolidated by the circuit court, Women's Care and the WC employees moved to compel arbitration on the basis that Potter's claims were within the scope of the arbitration provision in Potter's employment agreement with Women's Care and that the arbitration provision governed their disputes even though Potter was no longer a Women's Care employee. The trial court denied those motions. In appeal no. SC-2022-0706, the Alabama Supreme Court held Potter's breach of-contract claim and her tort claims against Women's Care were subject to arbitration. In appeal no. SC-2022-0707, the Court likewise held Potter's tort claims against the WC employees were subject to arbitration. The trial court's orders were denied and the cases remanded for further proceedings. View "Women's Care Specialists, P.C. v. Potter" on Justia Law

The Supreme Court affirmed the judgment of the trial court denying Plaintiff's application to vacate an arbitration award rendered in favor of Defendant and granting Defendant's motion to confirm the award, holding that Plaintiff failed to satisfy any of the legal standards required for reversal of the trial court's judgment.Defendant filed an arbitration complaint asserting claims of breach of contact, breach of fiduciary duty, and common-law fraud. The arbitrator issued an award in favor of Defendant. Thereafter, Plaintiff filed an application to vacate the award. The trial court denied the application to vacate and granted Defendant's motion to confirm the award. The Supreme Court affirmed, holding (1) the arbitrator gave Plaintiff the full and fair hearing to which he was entitled under governing law, public policy, and the parties' arbitration agreement; and (2) the arbitrator properly applied the fugitive disentitlement doctrine to prevent Plaintiff from asserting counterclaims or defenses, contesting the allegations, and viewing the evidence against him. View "Ahmed v. Oak Management Corp." on Justia Law

The People filed suit alleging Uber and Lyft violated the Unfair Competition Law (Bus. & Prof. Code 17200 (UCL)) by misclassifying California rideshare and delivery drivers as independent contractors, depriving them of wages and benefits associated with employee status, thereby harming workers, competitors, and the public. The suit sought injunctive relief, civil penalties, and restitution under the UCL and injunctive relief under Assembly Bill 5, Labor Code 2786. The court of appeal affirmed a preliminary injunction under Assembly Bill 5. Proposition 22 subsequently altered the standards for determining whether app-based drivers are independent contractors. The parties stipulated to dissolve the preliminary injunction. The Labor Commissioner filed separate actions against Uber and Lyft, pursuant to her Labor Code enforcement authority, alleging misclassification of drivers.The two direct enforcement actions were coordinated. Uber and Lyft moved to compel arbitration of those actions to the extent they seek “driver-specific” or “ ‘individualized’ ” relief, such as restitution under the UCL and unpaid wages under the Labor Code. The motions did not seek arbitration of the requests for civil penalties and injunctive relief; they relied on arbitration agreements the defendants entered into with drivers. The court of appeal affirmed the denial of the motions. The People and the Labor Commissioner are not parties to those arbitration agreements. View "In re Uber Technologies Wage and Hour Cases" on Justia Law

Petitioner was employed at Office Depot as a senior financial analyst. He was responsible for, among other things, ensuring data integrity. One of Ronnie’s principal duties was to calculate and report a metric called “Sales Lift.” Sales Lift is a metric designed to quantify the cost-reduction benefit of closing redundant retail stores. Petitioner identified two potential accounting errors that he believed signaled securities fraud related to the Sales Lift. Petitioner alleged that after he reported the issue, his relationship with his boss became strained. Eventually, Petitioner was terminated at that meeting for failing to perform the task of identifying the cause of the data discrepancy. Petitioner filed complaint with the Department of Labor’s Occupational Safety and Health Administration (OSHA), and OSHA dismissed his complaint. Petitioner petitioned for review of the ARB’s decision.
The Eleventh Circuit denied the petition. The court explained that Petitioner failed to allege sufficient facts to establish that a reasonable person with his training and experience would believe this conduct constituted a SOX violation, the ARB’s decision was not arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with the law. The court wrote that Petitioner’s assertions that Office Depot intentionally manipulated sales data and that his assigned task of investigating the discrepancy was a stalling tactic are mere speculation, which alone is not enough to create a genuine issue of fact as to the objective reasonableness of Petitioner’s belief. View "Chris Ronnie v. U.S. Department of Labor" on Justia Law

The issue this case presented for the Idaho Supreme Court's review centered on a wage claim dispute between Pat Stiffler and his previous employer, Hydroblend, Inc. After a dispute arose concerning incentive pay on an allegedly miscoded account, Stiffler filed a complaint for unpaid wages, breach of contract, retaliation, and wrongful termination. The proceedings culminated with two orders from the district court that: (1) awarded summary judgment to Hydroblend concerning treble damages; (2) concluded multiple issues were governed by an arbitration provision in Stiffler’s employment agreement; and (3) denied summary judgment where disputed facts remained at issue. Stiffler appealed the district court’s decisions, arguing that he is entitled to treble damages on all wages under Idaho’s Wage Claim Act, as well as severance pay under his 2019 employment contract. Stiffler also argues that the district court erred by compelling arbitration of some of his claims. The Idaho Supreme Court reversed the district court’s dismissal of Stiffler’s arbitrable claims because they should have been stayed, not dismissed. However, the Court affirmed the district court’s determination that a 2019 Contract controlled the issue of incentive pay while the remaining claims arose under a 2021 Contract and its arbitration agreement. As the prevailing party, Hydroblend was entitled to costs on appeal pursuant to Idaho Appellate Rule 40(a). View "Stiffler v. Hydroblend, Inc." on Justia Law