Justia Arbitration & Mediation Opinion Summaries

Cisco Systems, Inc. hired “John Doe” in September 2015 to work as an engineer. Doe was required to sign an arbitration agreement as a condition of his employment. Under the agreement, Cisco and Doe had to arbitrate “all disputes or claims arising from or relating to” Doe’s employment, including claims of discrimination, retaliation, and harassment. Several years after signing the agreement, Doe filed a complaint with the California Department of Fair Employment and Housing, alleging Cisco discriminated against him because of ancestry or race. He reported that two supervisors denied him opportunities and disparaged him because, under the traditional caste system of India, he was from the lowest caste and they are from the highest. Doe also accused Cisco of retaliating when he complained about being treated unfavorably because of his caste. The Department notified Cisco of Doe’s complaint, investigated it, and decided it had merit. Attempts at informal resolution were unsuccessful. The Department then filed a lawsuit against Cisco and the two supervisors. The Department alleged five causes of action alleging multiple violations of FEHA, and sought a permanent injunction preventing Cisco from committing further violations, and mandatory injunctive relief requiring Cisco to institute policies to prevent employment discrimination. The complaint also requested an order that Cisco compensate Doe for past and future economic losses. Cisco moved to compel arbitration pursuant to the agreement Doe signed. The trial court denied the motion. On appeal, Cisco argued the Department was bound by the terms of Doe’s arbitration agreement. The Court of Appeal affirmed, finding the Department acts independently when it exercises the power to sue for FEHA violations. “As an independent party, the Department cannot be compelled to arbitrate under an agreement it has not entered.” View "Dept. of Fair Employment and Housing v. Cisco Systems, Inc." on Justia Law

The San Diego City Attorney brought an enforcement action under the Unfair Competition Law, Business and Professions Code sections 17200, et seq. (UCL), on behalf of the State of California against Maplebear Inc. DBA Instacart (Instacart). In their complaint, the State alleged Instacart unlawfully misclassified its employees as independent contractors in order to deny workers employee protections, harming its alleged employees and the public at large through a loss of significant payroll tax revenue, and giving Instacart an unfair advantage against its competitors. In response to the complaint, Instacart brought a motion to compel arbitration of a portion of the City’s action based on its agreements with the individuals it hires ("Shoppers"). The trial court denied the motion, concluding Instacart failed to meet its burden to show a valid agreement to arbitrate between it and the State. Instacart challenged the trial court’s order, arguing that even though the State was not a party to its Shopper agreements, they were bound by its arbitration provision to the extent they seek injunctive relief and restitution because these remedies were “primarily for the benefit of” the Shoppers. The Court of Appeal rejected this argument and affirmed the trial court’s order. View "California v. Maplebear Inc." on Justia Law

Plaintiff, an emergency medical resident, began working for Crozer Chester Medical Center (“CCMC”). Plaintiff signed an at-will employment agreement with CMCC and an agreement to arbitrate with Prospect Health Access Network (“Prospect”), a company that employs professionals working at hospitals. After Plaintiff was involved in a dispute with a supervisor at CMCC, who also was an employee of Prospect, Plaintiff was terminated. Plaintiff filed a discrimination complaint with the Pennsylvania Human Relations Commission and the Equal Employment Opportunity Commission against CMCC. CMCC moved to compel arbitration.The district court denied CMCC's motion to compel arbitration and CMCC appealed.On appeal the Third Circuit affirmed, finding that Plaintiff's agreement to arbitrate any disputes between herself and Prospect did not extend to disputes involving CMCC. View "Dina Abdurahman v. Prospect CCMC LLC" on Justia Law

Plaintiff sued her former employer, Wood Ranch USA, Inc. (Wood Ranch) for compensatory and punitive damages on nine different causes of action. Wood Ranch moved to compel arbitration. The trial court granted the motion and stayed the pending court proceedings. Plaintiff filed a motion to vacate the trial court’s prior order compelling arbitration. Invoking sections 1281.97 and 1281.99, Plaintiff argued that Wood Ranch’s late payment of its share of the initiation fees constituted a material breach of the arbitration agreement.   The trial court granted the motion, and the Second Appellate District affirmed the court’s order vacating its earlier order compelling arbitration between the parties in this case. The appeal presents a question of first impression: Are these provisions preempted by the Federal Arbitration Act (FAA)? The court held that they are not because the procedures they prescribe further—rather than frustrate—the objectives of the FAA to honor the parties’ intent to arbitrate and to preserve arbitration as a speedy and effective alternative forum for resolving disputes.   The court explained that Sections 1281.97 and 1281.99 undeniably single out arbitration insofar as they define procedures that apply only to arbitrated disputes. But that they are arbitration-specific is not sufficient to warrant preemption by the FAA. Further, these sections in this case do not interfere with the FAA’s first goal of honoring the parties’ intent. Moreover, applying these sections, in this case, does not interfere with the FAA’s second goal of safeguarding arbitration as an expedited and cost-efficient vehicle for resolving disputes. View "Gallo v. Wood Ranch USA, Inc." on Justia Law

The issue presented for the Court of Appeal's review in this case centered on whether California Code of Civil Procedure Section 1281.4 authorized the trial court to stay a plaintiff’s action on the basis of a pending arbitration to which the plaintiff was not a party. Ann Leenay brought an action against her former employer, Lowe’s Home Centers, LLC (Lowe’s), under the Private Attorneys General Act of 2004 (PAGA). The trial court granted a petition to coordinate her action with a number of other PAGA actions against Lowe’s. Lowe’s then moved to stay the coordinated actions under section 1281.4. Lowe’s based the motion on over 50 arbitration proceedings against it, but Leenay and the other plaintiffs in the coordinated actions were not parties in any of those arbitration proceedings. The trial court granted the motion to stay, and Leenay filed a petition for writ of mandate asking the Court of Appeal to vacate the order. The Court of Appeal concluded the trial court erred by granting the motion to stay. "[S]ection 1281.4 applies only when a court has ordered parties to arbitration, the arbitrable issue arises in the pending court action, and the parties in the arbitration are also parties to the court action. Under those circumstances, the court must stay the action (or enter a stay with respect to the arbitrable issue, if the issue is severable)." Those circumstances did not exist in this case. The Court therefore granted Leenay’s writ petition. View "Leenay v. Super. Ct." on Justia Law

Plaintiff worked as a driver for California Transit. After California Transit terminated his employment, Evenskaas filed this wage and hour class action against California Transit; its owner, and the company that administered California Transit’s payroll, Personnel Staffing Group, LLC (collectively, the California Transit defendants).   Because Plaintiff signed an arbitration agreement, in which he agreed to arbitrate all claims arising from his employment and waived his right to seek class-wide relief, the California Transit defendants filed a motion to compel arbitration. The trial court denied the motion. The California Transit defendants appealed, contending the FAA applies to the arbitration agreement.   The Second Appellate District reversed the order denying Defendants’ motion to compel arbitration is reversed. The court directed the trial court to enter a new order granting the motion and dismissing Plaintiff’s class claims. The court explained that because the paratransit services California Transit hired Plaintiff to provide involve interstate commerce for purposes of the FAA, the FAA applies to the arbitration agreement and preempts the Gentry rule that certain class action waivers in employment arbitration agreements are unenforceable. View "Evenskaas v. California Transit, Inc." on Justia Law

After plaintiff filed this class-action complaint against defendants, defendants filed a motion to compel arbitration. The trial court granted the motion. Plaintiff appealed, and the Court of Appeals affirmed. The Oregon Supreme Court granted review of the matter, finding that plaintiff and defendants executed a contract—the “Driver Services Agreement” (DSA)—for plaintiff to provide delivery services for defendants. The DSA stated that drivers are independent contractors. The DSA includes a section on dispute resolution. That section provides that any party “may propose mediation as appropriate” as a means for resolving a dispute arising out of or relating to the DSA. It then provided that, if the parties did not pursue mediation or mediation failed, “any dispute, claim or controversy” arising out of or relating to the DSA—including disputes about “the existence, scope, or validity” of the DSA itself—would be resolved through binding arbitration conducted by a panel of three arbitrators. The DSA also included a savings clause, which allowed for the severance of any invalid or unenforceable term or provision of the DSA. On review, plaintiff argued, inter alia, that the arbitration agreement within the DSA was unconscionable because it required him to arbitrate his wage and hour claims but prohibited the arbitrators from granting him relief on those claims. Plaintiff based his argument on a provision of the arbitration agreement that stated that the arbitrators could not “alter, amend or modify” the terms and conditions of the DSA. The Court of Appeals agreed with defendant’s reading of the DSA, as did the Supreme Court: read in the context of the DSA as a whole, the provision that the arbitrators may not “alter, amend or modify” the terms and conditions of the DSA “is not plausibly read as a restriction on their authority to determine what terms are enforceable or what law is controlling.” View "Gist v. Zoan Management, Inc." on Justia Law

Delek uses third-party specialty inspectors to ensure that Delek’s projects comply with industry and regulatory requirements. Cypress employs and assigns these specialty inspectors to companies like Delek. Becker worked as an electrical inspector for Cypress, which set Becker’s compensation as a day rate and issued his paychecks. Cypress deemed Becker an administrative employee and considered him overtime-exempt under the Fair Labor Standards Act, 29 U.S.C. 201 (FLSA). Becker signed an employment agreement, acknowledging that he “underst[ood] that [his] employment is based on a specific project to be performed for a designated customer” and that any dispute related to this employment relationship would be arbitrated. Becker was assigned by Cypress to work at a Delek location.Becker filed an FLSA complaint against Delek, arguing that “Delek’s day-rate system violates the FLSA because [he] and those similarly situated workers did not receive any overtime pay for hours worked over 40 hours each week.” Becker claimed Delek was his employer because he worked 12-15 hours a day for six-seven days a week at Delek's location, reported to Delek, performed work essential to Delek’s core business, and had his pay and schedule directed by Delek. Cypress was allowed to intervene and moved to compel arbitration. The Sixth Circuit reversed the denial of the motion. Becker’s challenge is not “specific” to the arbitration agreement’s delegation provision, leaving the question of whether Delek can enforce the arbitration agreement for an arbitrator to decide. View "Becker v. Delek US Energy, Inc." on Justia Law

The Supreme Court affirmed the decision of the court of appeals holding that decisions made under Minn. Stat. 43A.33 are quasi-judicial administrative decisions subject to certiorari review by the court but reversed its holding that the Bureau of Mediation Services was a proper party to the appeal, holding that the Bureau was not a proper party to the certiorari appeal.When the Minnesota Department of Corrections sought certiorari review of an arbitrator's decision granting Appellant's appeal from the discharge of his employment at the Minnesota Department of Corrections, Appellant challenged the court of appeals' jurisdiction to hear the appeal, arguing that review must be undertaken by the district court. The court of appeals upheld the arbitrator's decision. The Supreme Court affirmed in part and reversed in part, holding (1) Appellant and the Department were not parties to an arbitration agreement that invoked the judicial review procedures of the Uniform Arbitration Act; (2) the decision of an arbitrator appointed according to section 43A.33 is a quasi-judicial determination of an inferior tribunal reviewable via writ of certiorari at the court of appeals; and (3) the Bureau was not a proper party to this appeal because it had no legal or equitable interest in the outcome. View "Minn. Department of Corrections v. Knutson" on Justia Law

The Supreme Court affirmed the judgment of the superior court in favor of Defendant-union and denying Plaintiff's motion to vacate an arbitration award, granting Defendant's motion to confirm the award, and awarding attorneys' fees to Defendant as the prevailing party, holding that there was no error.Defendant represented certain municipal employees employed by Plaintiff, West Warwick Housing Authority. After Plaintiff suspended the employment of the grievant, Defendant grieved her termination pursuant to the parties' collective bargaining agreement (CBA). The arbitrator decided in the grievance's favor. Thereafter, Plaintiff filed a complaint seeking to vacate the arbitration award, arguing that the grievance was not substantively arbitrable because the CBA was invalid and that the arbitrator's decision was irrational. The superior court entered judgment in favor of Defendant. The Supreme Court affirmed, holding that the trial justice correctly denied Defendant's motion to vacate because the dispute was arbitrable. View "West Warwick Housing Authority v. R.I. Council 94" on Justia Law