Justia Arbitration & Mediation Opinion Summaries

The case involves an appeal by SaniSure, Inc., against a trial court's decision not to compel arbitration in a dispute with its former employee, Jasmin Vazquez. Vazquez initially worked for SaniSure from July 2019, and as part of her employment, she signed an agreement to resort to arbitration for any disputes that might arise from her employment. She eventually terminated this employment in May 2021. She returned to work for SaniSure four months later without signing any new arbitration agreement or discussing the application of the previous arbitration agreement to her new employment.Vazquez's second employment with SaniSure ended in July 2022. Later, she filed a class-action complaint alleging that SaniSure had failed to provide accurate wage statements during her second tenure. She also signaled her intent to add a derivative action under the Labor Code Private Attorney Generals Act (PAGA). SaniSure responded by submitting a “cure letter” claiming that its wage statements now comply with the Labor Code and requested that Vazquez submit her claims to binding arbitration, which Vazquez disputed.The Court of Appeal of the State of California Second Appellate District Division Six affirmed the trial court's denial of SaniSure’s motion to compel arbitration. The court found that SaniSure failed to show that Vazquez agreed to arbitrate claims arising from her second stint of employment. The court further concluded that there was no evidence of an implied agreement to arbitrate claims arising from the second employment period, as the agreement covering Vazquez’s first employment period terminated in May 2021. View "Vazquez v. SaniSure" on Justia Law

In this case, the Supreme Judicial Court of Massachusetts affirmed the lower court's summary judgment ruling against Jordan's Furniture, Inc. The company had implemented a commissions-based compensation scheme for its sales employees, which the plaintiff class argued failed to comply with the overtime and Sunday pay statutes as outlined in a previous case, Sullivan v. Sleepy's LLC. The court agreed, finding that Jordan's failed to provide separate and additional payments for overtime and Sundays, thereby violating the statutes. Furthermore, the court ruled that the Sunday pay statute can be enforced under the Wage Act's private right of action, as Sunday pay constitutes "wages earned" under the Wage Act. The court, however, vacated the award of attorney's fees to the plaintiff class and remanded the case to the lower court for recalculation of the award of attorney's fees, due to the lower court's reliance on common fund case law and categorical exclusion of time spent on settlement negotiations and mediation from the lodestar calculation. View "Sutton v. Jordan's Furniture, Inc." on Justia Law

In this case, the plaintiff, Jason Schwebke, brought a lawsuit against his employer, United Wholesale Mortgage (UWM), alleging disability discrimination under state and federal law. Schwebke, who is deaf, claimed that UWM failed to provide him with necessary accommodations and retaliated against him. In response, UWM participated in extensive discovery procedures for several months without invoking its right to arbitration as per the parties' employment agreement.Seven months into the case, UWM moved to compel arbitration. The district court denied this motion, reasoning that UWM had implicitly waived its right to compel arbitration through its conduct. On appeal, the United States Court of Appeals for the Sixth Circuit affirmed the district court's decision.The appellate court applied the principle from the Supreme Court's decision in Morgan v. Sundance, Inc., which held that a party may waive its contractual right to arbitrate by participating in litigation. In applying this rule, the court found that UWM's actions—participating in extensive discovery, failing to raise arbitration in its defense, and not moving to compel arbitration until seven months into the case—were completely inconsistent with reliance on the arbitration agreement. The court therefore concluded that UWM had implicitly waived its right to arbitration. View "Schwebke v. United Wholesale Mortgage LLC" on Justia Law

The plaintiff, Adan Ortiz, worked for two companies, GXO Logistics Supply Chain, Inc., and Randstad Inhouse Services, LLC, both of which were his former employers. Ortiz's role involved handling goods in a California warehouse facility operated by GXO. The goods, primarily Adidas products, were received from mostly international locations and stored at the warehouse for several days to a few weeks before being shipped to customers and retailers in various states.Ortiz filed a class action lawsuit against his former employers alleging various violations of California labor law. The defendants moved to compel arbitration pursuant to an arbitration agreement in Ortiz's employment contract. Ortiz opposed this on the grounds that the agreement could not be enforced under federal or state law.The United States Court of Appeals for the Ninth Circuit affirmed in part the district court's order denying the appellants' motion to compel arbitration. It concluded that Ortiz belonged to a class of workers engaged in foreign or interstate commerce and was therefore exempted from the Federal Arbitration Act (FAA). The court reasoned that although Ortiz's duties were performed entirely within one state's borders, his role facilitated the continued travel of goods through an interstate supply chain, making him a necessary part of the flow of goods in interstate commerce. The court also rejected the argument that an employee must necessarily be employed by a transportation industry company to qualify for the transportation worker exemption. View "ORTIZ V. RANDSTAD INHOUSE SERVICES, LLC" on Justia Law

The plaintiff, Dana Hohenshelt, filed a lawsuit against his former employer, Golden State Foods Corp., alleging retaliation under the California Fair Employment and Housing Act, failure to prevent retaliation, and violations of the California Labor Code. Golden State moved to compel arbitration in accordance with their arbitration agreement, and the trial court granted the motion, staying court proceedings. Arbitration began, but Golden State failed to pay the required arbitration fees within the 30-day deadline. Hohenshelt then sought to withdraw his claims from arbitration and proceed in court, citing Golden State's failure to pay as a material breach of the arbitration agreement under California's Code of Civil Procedure section 1281.98. The trial court denied this motion, deeming Golden State's payment, which was made after the deadline but within a new due date set by the arbitrator, as timely.The Court of Appeal of the State of California Second Appellate District disagreed with the trial court's decision. It held that the trial court had ignored the clear language of section 1281.98, which states any extension of time for the due date must be agreed upon by all parties. Golden State's late payment constituted a material breach of the arbitration agreement, regardless of the new due date set by the arbitrator. The court also rejected Golden State's argument that section 1281.98 is preempted by the Federal Arbitration Act, following precedent from other courts that held these state laws are not preempted because they further the objectives of the Federal Arbitration Act. Therefore, the court granted Hohenshelt's petition for writ of mandate, directing the trial court to lift the stay of litigation. View "Hohenshelt v. Superior Court" on Justia Law

Shawn Fowler, a former Montana state trooper, sued the Department of Justice, Montana Highway Patrol (MHP) alleging constructive discharge in violation of the Wrongful Discharge from Employment Act (WDEA). He also alleged breach of contract by the Montana Public Employees Association (MPEA) for declining his request to arbitrate. Fowler claimed that he was forced to retire due to a hostile work environment, which was mainly due to disciplinary action taken against him for mishandling two suspected DUI traffic stops in 2017. The MHP argued that Fowler, who was covered by a collective bargaining agreement (CBA), failed to exhaust the grievance procedures of the CBA before filing a lawsuit.The Supreme Court of the State of Montana reversed the judgment of the Sixth Judicial District Court, Park County. The Supreme Court held that an employee covered by a CBA can't bring a claim under the WDEA. The Court determined that Fowler’s alleged constructive discharge was covered by the CBA and he was required to exhaust the grievance procedures for a constructive discharge through the CBA. The Court found that Fowler did not grieve any of the events preceding his suspension, which he claimed contributed to his constructive discharge, and he resigned from employment prior to exhausting the grievance procedure of the CBA. The Court concluded that the District Court erred in denying the State’s two motions for summary judgment and reversed the judgment. View "Fowler v. Department of Justice" on Justia Law

In this putative class action lawsuit, Maria Johnson, a former employee of Lowe's Home Centers, LLC, brought claims on behalf of herself and other Lowe's employees under California's Private Attorneys General Act of 2004 (PAGA) for alleged violations of the California Labor Code. Johnson had signed a pre-dispute employment contract that included an arbitration clause.The United States Court of Appeals for the Ninth Circuit affirmed the district court's decision to compel arbitration of Johnson's individual PAGA claim, as a valid arbitration agreement existed and the dispute fell within its scope. However, the district court's dismissal of Johnson's non-individual PAGA claims was vacated. The lower court had based its decision on the U.S. Supreme Court's interpretation of PAGA in Viking River Cruises, Inc. v. Moriana, which was subsequently corrected by the California Supreme Court in Adolph v. Uber Techs., Inc. The state court held that a PAGA plaintiff could arbitrate their individual PAGA claim while also maintaining their non-individual PAGA claims in court. The case was remanded to the district court to apply this interpretation of California law. The Ninth Circuit rejected Lowe's argument that Adolph was inconsistent with Viking River. View "JOHNSON V. LOWE'S HOME CENTERS, LLC" on Justia Law

The case involves a group of former firefighters who retired from the city of Meriden and claimed damages from the city and the Meriden Municipal Pension Board for alleged breach of a collective bargaining agreement. The plaintiffs, who retired in 2015, claimed that they should have received an increase in their pension benefits based on a 2% wage increase that was awarded retroactively in an arbitration process after the plaintiffs had retired. The trial court ruled in favor of the plaintiffs, holding that the defendants had breached the collective bargaining agreement by failing to recalculate the plaintiffs' pension benefits based on the retroactive wage increase.On appeal, the Connecticut Supreme Court reversed the trial court's decision. The Supreme Court held that the defendants did not breach the collective bargaining agreement. This conclusion was based on the fact that the pension plan did not allow for the recalculation of pension benefits for retirees who voluntarily retired before the issuance of the arbitration award. The court noted that the pension plan only allowed for a retroactive adjustment of pension benefits for those who were forced to retire due to reaching the mandatory retirement age of 65. The court also held that the trial court did not lack subject matter jurisdiction to hear the case, rejecting the defendants' claim that the plaintiffs failed to exhaust their administrative remedies before filing the lawsuit. View "Stiegler v. Meriden" on Justia Law

In a case heard before the Court of Appeal of the State of California Second Appellate District Division Five, Omar Kader, the plaintiff, sued his employer, Southern California Medical Center, Inc., and other defendants due to allegations of sexual harassment and assault. Kader had signed an arbitration agreement with his employer, but this was without disclosure of the ongoing sexual harassment and assault. After the enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the Act), which invalidates predispute arbitration agreements under certain circumstances, Kader brought his suit.The defendants filed a motion to compel arbitration, arguing that the Act does not invalidate the arbitration agreement in this case since the alleged sexual conduct constituted a “dispute” which preexisted the arbitration agreement and the effective date of the Act.The court concluded that a dispute for the purposes of the Act does not arise merely from the fact of injury. Instead, for a dispute to arise, a party must first assert a right, claim, or demand. In this case, there was no evidence of a disagreement or controversy until after the date of the arbitration agreement and the effective date of the Act, when Kader filed charges with the Department of Fair Employment and Housing in May 2022. Therefore, the court held that the predispute arbitration agreement is invalid, and the order denying the motion to compel arbitration was affirmed. View "Kader v. Southern California Medical Center, Inc." on Justia Law

The case involves a dispute between Onecimo Sierra Suarez, an employee, and his employer, Rudolph & Sletten, Inc. (R&S), concerning the payment of arbitration fees. Suarez had initially sued his employer for alleged wage and hour violations. R&S successfully moved to have the case resolved through arbitration, as provided in their employment agreement. However, R&S delayed in paying its share of the initial arbitration fee, leading Suarez to argue that R&S has waived its right to arbitration. The Court of Appeal, Fourth Appellate District Division One, State of California held that the employer's delay in paying the arbitration fees constituted a material breach of the arbitration agreement, thereby waiving its right to arbitration. The court concluded that R&S's payment was late, even if certain provisions of the Code of Civil Procedure could potentially extend the deadline. The court also held that R&S's argument -- that the Federal Arbitration Act (FAA) preempted California's arbitration-specific procedural rules for fee payment -- was incorrect. The court found that such rules neither prohibited nor discouraged the formation of arbitration agreements, and therefore, were not preempted by the FAA. The court granted Suarez's petition and ruled that the case should proceed in court. View "Suarez v. Super. Ct." on Justia Law