Justia Arbitration & Mediation Opinion Summaries

An employee was hired by a security services company in 2012 and, as a condition of employment, signed an arbitration agreement requiring that any employment-related disputes be resolved through arbitration under the Federal Arbitration Act (FAA). In 2023, the employee was assigned to work at Oracle Park, where he was subjected to hostile and derogatory conduct by supervisors and coworkers based on his perceived sexual orientation, including intrusive questioning, mocking, and reduction of work hours. After formally complaining about this treatment, the employee was terminated. He then filed a lawsuit against his employer and two individuals, asserting multiple claims, including sexual harassment under California’s Fair Employment and Housing Act.The defendants sought to compel arbitration based on the prior agreement, arguing that all claims fell within its scope and that both federal and state law required enforcement. The plaintiff opposed the motion, challenging the agreement’s validity but not specifically referencing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA). The Superior Court of the City and County of San Francisco issued a tentative ruling, later adopted as final, finding that the EFAA rendered the arbitration agreement unenforceable because the plaintiff stated a valid sexual harassment claim. The court further found that the EFAA barred arbitration of the entire case, not just the sexual harassment claim, and that the plaintiff’s conduct showed he elected to pursue his claims in court.On appeal, the California Court of Appeal, First Appellate District, Division Three, affirmed the trial court’s denial of the motion to compel arbitration. The court held that the EFAA applies to cases involving sexual harassment claims and bars enforcement of predispute arbitration agreements for the entire case at the plaintiff’s election, without requiring an explicit invocation of the EFAA. The court also held that the trial court properly considered the EFAA’s applicability and provided due process, even without supplemental briefing. View "Quilala v. Securitas Security Services USA" on Justia Law

The case centers on an employee who brought multiple claims against her former employer, including several for violations of California’s Labor Code and a representative claim under the Private Attorneys General Act (PAGA). The employee had signed an arbitration agreement at the start of her employment. As a result, all non-PAGA claims were compelled to arbitration, while the PAGA claims (both individual and representative) were stayed. The arbitrator found in favor of the employer on all Labor Code violations, concluding that the alleged violations did not occur.Following the arbitration, the Superior Court of San Bernardino County confirmed the arbitrator’s award and granted judgment on the pleadings against the employee on her PAGA claim, ruling that the arbitration results established she was not an “aggrieved employee” under PAGA, and therefore lacked standing to pursue the PAGA claim. When the employee appealed, the California Court of Appeal, Fourth Appellate District, Division Two, affirmed the denial of her motion to vacate the arbitration award but reversed the judgment on the pleadings as to the PAGA claim, holding that the arbitration did not preclude her from pursuing PAGA penalties.Subsequently, the employer filed a renewed motion for judgment on the pleadings, arguing that subsequent appellate court decisions and the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc., constituted an intervening change in the law, rendering the law of the case doctrine inapplicable. The trial court denied this motion, finding that its prior ruling remained law of the case. Reviewing this denial, the California Court of Appeal, Fourth Appellate District, Division Two, held that the law of the case doctrine properly applied because there had been no controlling intervening change in the law. The court denied the employer’s writ petition, confirming that the arbitrator’s findings on non-PAGA claims did not preclude judicial determination of the employee’s standing under PAGA. View "Prime Healthcare Management v. Super. Ct." on Justia Law

Several participants in a terminated employee stock ownership plan asserted claims under the Employee Retirement Income Security Act (ERISA) following the sale and dissolution of their plan. The plan, created by A360, Inc. in 2016, purchased all company stock and became its sole owner. In 2019, A360 and its trustee sold the plan’s shares to another entity, amending the plan at the same time to include an arbitration clause that required all claims to be resolved individually and prohibited representative, class, or group relief. The plan was terminated shortly thereafter, and the proceeds were distributed to participants. The plaintiffs alleged that the defendants undervalued the shares and breached fiduciary duties, seeking plan-wide monetary and equitable relief.The United States District Court for the Northern District of Georgia considered the defendants’ motion to compel arbitration based on the plan’s amended arbitration provisions. The district court determined that although the plan itself could assent to arbitration, the arbitration provision was unenforceable because it precluded plan-wide relief authorized by ERISA. The court found that the provision constituted a prospective waiver of statutory rights and concluded that, per the plan amendment’s own terms, the arbitration provision was not severable and thus entirely void.The United States Court of Appeals for the Eleventh Circuit reviewed the district court’s denial of the motion to compel arbitration de novo. The Eleventh Circuit held that the arbitration provision was unenforceable under the effective vindication doctrine because it barred participants from seeking plan-wide relief for breaches of fiduciary duty, as provided by ERISA. The court joined other circuits in concluding that such provisions violate ERISA’s substantive rights and affirmed the district court’s invalidation of the arbitration procedure and denial of the motion to compel arbitration. View "Williams v. Shapiro" on Justia Law

A former hourly employee brought a class action lawsuit against his former employer, a large wood products company, alleging various wage and hour violations under California law. The proposed classes included both employees who had signed arbitration agreements and those who had not. While some nonexempt employees had signed arbitration agreements requiring individual arbitration and waiving class actions, the named plaintiffs had not. The employer did not initially assert arbitration as a defense and, when ordered by the court to produce copies of signed arbitration agreements for putative class members, failed to do so for several years.During the course of discovery in the Superior Court of Shasta County, the employer repeatedly resisted requests to identify or produce arbitration agreements for employees who had signed them, leading to multiple discovery sanctions. The employer participated in extensive discovery and mediation involving employees who had signed arbitration agreements, without distinguishing them from other putative class members. Only after class certification did the employer finally produce thousands of signed arbitration agreements and immediately moved to compel arbitration for those employees. Plaintiffs opposed, arguing the employer had waived its right to arbitrate by years of litigation conduct inconsistent with an intent to arbitrate, and sought evidentiary and issue sanctions for delayed production.The California Court of Appeal, Third Appellate District, reviewed the case. Applying the California Supreme Court’s standard from Quach v. California Commerce Club, Inc., the appellate court held that the employer waived its right to compel arbitration by clear and convincing evidence. The employer’s prolonged failure to produce arbitration agreements and its conduct throughout litigation was inconsistent with an intention to enforce arbitration. The order denying the motion to compel arbitration was affirmed, and the appeal from the order granting evidentiary and issue sanctions was dismissed as nonappealable. View "Sierra Pacific Industries Wage and Hour Cases" on Justia Law

An employee at a nuclear power plant operated by a subsidiary corporation left active work due to a medical condition but remained employed while on short-term disability. After the employee transitioned to long-term disability, the employer terminated his employment. The union, representing the plant’s workers, filed a grievance on the employee’s behalf, arguing that the collective bargaining agreement (CBA) required continued employment and benefits. The union initiated arbitration against the employer but mistakenly named the employer’s parent company as the respondent. Despite the error, counsel for the correct employer participated in the arbitration, and all parties consistently identified the subsidiary as the actual employer during the proceedings.After the arbitrator issued an award in favor of the union—ordering reinstatement and benefits for the employee—the employer did not comply. Instead, the parent and subsidiary together filed suit in the United States District Court for the Western District of Michigan, seeking to vacate the award due to the mistaken caption. The union counterclaimed for confirmation of the award. The district court ruled for the union, finding extensive evidence that the subsidiary had engaged in and intended to be bound by the arbitration, and that the erroneous caption was merely a procedural defect to which the employer had waived any objection by participating fully and not raising a timely challenge.The United States Court of Appeals for the Sixth Circuit affirmed the district court’s judgment. The Sixth Circuit held that when an arbitration demand and award misname the party against whom the award is meant to be entered, but there is no ambiguity about the real party, a federal court may enforce the award. The court further held that any objection to the misnomer was waived by the employer’s participation and failure to object, and that the error was a curable misnomer not warranting vacatur or modification of the award. View "Holtec International Corp. v. Michigan State Utility Workers Council" on Justia Law

A company operating stevedoring services at the Port of Mobile, Alabama, entered into a collective bargaining agreement with a union representing longshore workers. The agreement included a no-strike provision and outlined procedures for resolving disputes, including arbitration. After an alleged strike by union members, the company filed a lawsuit in state court seeking a temporary restraining order and later damages for breach of the no-strike provision. The state court issued a restraining order, ending the strike within days. The union subsequently removed the case to federal court, where the company amended its complaint to seek damages, asserting that all conditions precedent for judicial action had been met.In the United States District Court for the Southern District of Alabama, the union moved to compel arbitration, arguing that the dispute should be resolved through the arbitration process outlined in the collective bargaining agreement. The district court denied the motion, concluding that the agreement permitted the company to seek monetary damages in court for violations of the no-strike provision. The union then filed an interlocutory appeal of the order denying arbitration, while the underlying damages action remained pending.The United States Court of Appeals for the Eleventh Circuit reviewed whether it had jurisdiction to hear the interlocutory appeal. The court held that it lacked appellate jurisdiction because the Federal Arbitration Act’s provision for interlocutory appeals does not apply to collective bargaining agreements covering workers engaged in interstate commerce, such as longshoremen. The court also found no basis for jurisdiction under the Labor Management Relations Act or the collateral-order doctrine. Accordingly, the Eleventh Circuit dismissed the appeal for lack of jurisdiction, leaving the district court’s order in place and expressing no opinion on the merits of the underlying dispute. View "APM Terminals Mobile, LLC v. International Longshoremen's Association" on Justia Law

A company that manufactures emergency-use auto-injectors terminated a senior technician after she certified that a probationary employee completed five on-the-job training (OJT) tasks in a single day. The company alleged that this certification was fraudulent and did not comply with its training policies, as the forms lacked supporting documentation and the employee did not demonstrate proficiency. The technician, a qualified trainer, filed a grievance through her union, arguing that it was common practice on her shift to conduct and certify multiple OJTs in one day and that supervisors were aware of these practices.An arbitrator reviewed the grievance under the collective bargaining agreement (CBA) between the company and the union. The arbitrator found that the company failed to prove by a preponderance of the evidence that the technician’s actions were intentionally fraudulent or falsified. The arbitrator also noted that the company’s staffing shortages and established practices contributed to the situation and drew an adverse inference against the company for not calling key supervisors as witnesses. The arbitrator ordered the technician’s reinstatement with back pay and benefits. The United States District Court for the Eastern District of Missouri granted summary judgment to the union, affirming the arbitrator’s award.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s decision de novo for legal conclusions and for clear error on factual findings. The Eighth Circuit held that the arbitrator acted within his authority in interpreting ambiguous terms in the CBA, such as “dishonesty,” and in considering past practices. The court also found that the arbitrator’s adverse inference and allocation of the burden of proof were permissible. Finally, the court concluded that reinstating the technician did not violate any well-defined and dominant public policy. The judgment affirming the arbitrator’s award was affirmed. View "Meridian Medical Technologies, Inc. v. International Brotherhood of Teamsters, Local 688" on Justia Law

A company that provides employee management services hired an employee in California in September 2021. At the start of her employment, she completed onboarding documents that did not mention arbitration. About five months later, she was asked to sign additional documents, including an arbitration agreement, a voluntary dispute resolution policy, and a confidentiality and non-disclosure agreement (CND). The arbitration agreement required most employment-related disputes to be resolved through binding arbitration, with certain exceptions for claims related to confidential information. The CND allowed the company to bring certain claims in court and permitted the company to seek injunctive relief without posting a bond or proving actual damages. The employee later filed a lawsuit alleging various employment law violations.The Solano County Superior Court reviewed the company’s motion to compel arbitration. The company argued that the arbitration agreement was enforceable and, if any provision was found unenforceable, it should be severed. The employee opposed, arguing the agreement was unconscionable due to the manner in which it was presented and its one-sided terms. The trial court found the arbitration agreement to be both procedurally and substantively unconscionable, particularly because it forced the employee’s claims into arbitration while allowing the company’s likely claims to proceed in court, and because of a confidentiality provision that restricted informal discovery. The court denied the motion to compel arbitration and declined to sever the offending provisions, finding the agreement permeated by unconscionability.The California Court of Appeal, First Appellate District, Division Three, affirmed the trial court’s order. The appellate court held that the arbitration agreement and the CND, read together, were unconscionable due to lack of mutuality and an overly broad confidentiality provision. The court also found no abuse of discretion in the trial court’s refusal to sever the unconscionable terms and concluded that any error in denying a statement of decision was harmless. View "Gurganus v. IGS Solutions LLC" on Justia Law

Plaintiff was employed by a staffing company and assigned to work at a warehousing and logistics firm, performing duties as a materials handler and forklift operator. He filed a class action and a separate representative action alleging various wage and hour violations, including claims for unpaid minimum wages, waiting time penalties, and civil penalties under the Private Attorneys General Act (PAGA). The two cases were consolidated. The plaintiff and his direct employer had entered into an arbitration agreement, which referenced the American Arbitration Association (AAA) rules but did not explicitly state that the arbitrator would decide issues of arbitrability.The defendants moved in the Superior Court of Los Angeles County to compel arbitration of the plaintiff’s individual claims, dismiss class allegations, and stay judicial proceedings. They argued that the arbitration agreement was governed by the Federal Arbitration Act (FAA) and that the AAA rules incorporated into the agreement delegated arbitrability issues to the arbitrator. The plaintiff opposed, asserting exemption from the FAA as a transportation worker and arguing that certain claims, including those under PAGA and for unpaid wages, were not arbitrable under California law. The trial court found the FAA did not apply, applied California law, and held that the agreement did not clearly and unmistakably delegate arbitrability to the arbitrator. The court compelled arbitration of some claims but allowed others, including minimum wage and PAGA claims, to proceed in court.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s order. The court held that, in the context of a mandatory employment arbitration agreement, mere incorporation of AAA rules without explicit language in the agreement is not clear and unmistakable evidence of intent to delegate arbitrability to the arbitrator. The court also held that claims for waiting time penalties based on minimum wage violations and all PAGA claims were not arbitrable under California law when the FAA does not apply. View "Villalobos v. Maersk, Inc." on Justia Law

The plaintiff, a former employee, brought a lawsuit against his employer alleging multiple claims of discrimination and harassment. The employer successfully moved to compel arbitration pursuant to an agreement between the parties. During the arbitration, the arbitration provider issued an invoice for fees, which the employer attempted to pay electronically on the last day of the statutory 30-day deadline. However, due to a processing delay, the payment was not received by the provider until three days after the deadline.The Superior Court of Los Angeles County found that the employer’s failure to ensure the arbitration fees were received within the 30-day period constituted a material breach of the arbitration agreement under California Code of Civil Procedure section 1281.98. The court vacated its prior order compelling arbitration, returned the case to court, and awarded the plaintiff $1,750 in sanctions for expenses incurred in bringing the motion. The plaintiff then sought over $300,000 in attorney fees and costs under section 1281.98, subdivision (c)(1), which allows recovery of all fees and costs associated with an abandoned arbitration. The trial court granted only a reduced amount, reasoning that the plaintiff was entitled only to fees and costs for work rendered useless by the termination of arbitration.On appeal, the California Court of Appeal, Second Appellate District, Division One, considered the impact of the California Supreme Court’s decision in Hohenshelt v. Superior Court (2025) 18 Cal.5th 310. Hohenshelt held that federal law preempts a strict application of section 1281.98, and that forfeiture of arbitral rights occurs only if the failure to pay fees is willful, grossly negligent, or fraudulent. The appellate court determined that the employer’s late payment was not willful, grossly negligent, or fraudulent, and therefore, the plaintiff was not entitled to attorney fees under section 1281.98, subdivision (c)(1). The order awarding attorney fees and costs was reversed. View "Wilson v. Tap Worldwide, LLC" on Justia Law