CA Court Issues Decision Upholding Arbitration Agreement

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An Arbitration agreement is a common part of many employment contracts. These clauses keep employers from having to fight court and generally save larger companies a substantial amount of money. However, these clauses are not necessarily good for employees. By signing an arbitration agreement, the employee gives up most of his or hers rights to file a lawsuit in court and agree to pursue all claims in arbitration instead.

There are many disadvantages to arbitration for employees. First, there is no jury in an arbitration, and juries are usually sympathetic to individuals who were harassed or discriminated against by their employers. Next, the arbitration process frequently limits the amount of discovery available to each side. This often works against the employee, who has less access to the employer’s documents, emails, and other files. Finally, the decision made by the arbitrator is usually not appealable – if the employee disagrees with the decision, there is little recourse.

On March 28, 2016, the California Supreme Court decided the case of Baltazar v. Forever 21, involving an arbitration agreement between an employee and a clothing company. In the case, Maribel Baltazar signed an arbitration agreement as part of her employment contract with clothing store Forever 21. Baltazar quit her job after alleging that she experienced racial and sexual discrimination and harassment. When she attempted to file a lawsuit against the company, Forever 21 enforced the arbitration clause of her employment contract.

Baltazar fought against the arbitration clause by arguing that it was unenforceable. She took issue with the language of the clause, which seemed to allow the employer more access to the court system. The arbitration clause allowed both parties to go to court (and skip arbitration) in order to ask for an injunction or other provisional remedy. Baltazar argued that Forever 21 was much more likely to seek an injunction in court, and based her argument on a similar case decided in 2010.

In 2010, the First Appellate District decided the case of Trivedi v. Curexo Technology Corp., 189 Cal. App. 4th 387. Trivedi held that arbitration agreements which exempted provisional remedies like injunctions were more likely to be used by employers rather than employees, and the discrepancy rendered the arbitration clause unconscionable and unenforceable.

The California Supreme Court disagreed with both Baltazar and the Trivedi court. The court held that even if Forever 21 was more likely to be able to use the court system, California Code of Civil Procedure ยง 1281. 8 allowed either party to an arbitration agreement to use the court system for provisional remedies. Since the arbitration clause did nothing but re-state established law, the California Supreme Court found that the arbitration clause was valid and enforceable. The court also rejected multiple other arguments made by Baltazar.

The Supreme Court’s decision is important because it reverses a recent trend of courts finding arbitration agreements unconscionable for technical or minor reasons. After this ruling, lower courts may be less likely to throw out an arbitration agreement, and employees may have no choice but to submit to arbitration.

If you have a conflict with your employer, and are unsure if you will have to go to arbitration, call the Law Offices of Michael L. Carver today and learn more about your options.

Concerned Over Employer Arbitration Agreement?

ArbitrationMany employers want their employees to sign “arbitration agreements” requiring disputes that arise in the workplace be resolved through arbitration rather than in the courts. Arbitration is decided by a neutral third person, often a retired judge, who makes the decision as to the dispute. This means a jury will never hear your case.

This kind of agreement in the workplace have become commonplace. Employers use these agreements, because they believe the agreement will prevent disputes from going to the courts and result in more favorable treatment of employers. It is widely believed that arbitration is less expensive than courtroom litigation; however, that question is up in the air.

In the course of normal litigation, a lawsuit is filed by an employee. The employer typically pays out thousands of dollars to their attorneys to defend the court action brought by the employee. At some point the case may go to arbitration hearing unless it is settled along the way. In a California employment arbitration setting, the employer must pay most of the case costs and in many cases, the costs are more than the employer would pay in the courts.

The risk to employers is potentially greater in arbitration than in the courts. Particularly in cases involving nonpayment of overtime, the prevailing employee can recover attorneys’ fees, but the prevailing employer does not usually recover their attorneys’ fees. Worse for the employer, if they get an unfavorable decision against them by the arbitrator, the decision is usually non appealable.
There may be many reasons why employers want employees to sign arbitration agreements. The advantage for an employer in the this setting is that there is no jury, which is good because juries are unpredictable. While some studies indicate that employees win larger awards in a court trial, there is little evidence that the employers would have done better in arbitration.

There are some advantages to the employee in arbitration. Arbitrations are less formal than the court process and usually take less time than it would take to get to trial. If you’re required to sign such an agreement to obtain or keep your employment, you may want to have an attorney review the agreement and give you advice as to whether or not you should agree to the provision.

Were You Asked to Sign Something Just to Get Paid?

fiprkThe day an employee leaves their job can be a very emotional experience, even if the employee is leaving the job by choice. It is often much more so if an employee is being fired or laid off for lack of work. It makes sense, in a world where most people work paycheck to paycheck. When a job is ending, people often wonder where their next month’s rent is coming from and whether or not they’re eligible to collect unemployment.

Too often, an employer will ask an employee to sign something on this day. And employees will sign it, sometimes without even reading it, believing it is necessary to get their final paycheck. Often, they are very concerned about what their employer will say to prospective employers who call and ask about their job performance and behavior. Sometimes, employees will sign anything just because they want things to be gotten over with.

However, employees should carefully read anything they’re asked to sign regarding their employment, especially at the end of their job. The employer could be trying to get the employee to agree they have been paid everything they are owed, or even waiving their rights to sue in exchange for a small severance payment.

Labor Code 206 and 206.5 may protect employees in this situation. Labor Code Section 206.5 clearly states that an employer cannot require an employee to sign a release in order to get paid. Violation of this section can be a misdemeanor, and it covers claims regarding wages due or about to become due. Labor Code Section 206 states that in any dispute over wages, the employer shall pay the undisputed amount due within the required time limits. Triple damages can sometimes be recovered in this situation under the code. This section also provides that the employee still has the right to bring a lawsuit over disputed amounts paid, even if the employer pays the undisputed amount.

One thing an employee shouldn’t have to worry about is whether or not they’ve been paid all their wages, especially when they’re in a precarious situation to begin with.

Do You Have a Favoritism Situation, a Nepotism Case, or Discrimination?

nepOur office just received a call from an employee asking if it was legal for their boss to treat family members better than the other employees who work for them. This is a question that comes up regularly, and it is a valid question, because it involves an issue of basic fairness. Often, the caller describes a person who is related to the boss that does less work, gets more pay or gets a better schedule than the employees who are not related in these calls. The legal term here is nepotism. It means a family member is getting better treatment than the rest of the employees simply because they’re related to the boss or owner of the business. The truth is that unless you’re working for the government, and are covered under a Government Code Section, there are no specific laws preventing an employer from treating an employee better than the rest because they are related.
However, an employer could be breaking their own anti-nepotism policy. Such policies can often be found in an employee handbook. At times, union contracts forbid such treatment and require that things like preferred schedules or jobs be based upon seniority, or another neutral criteria. Sometimes, a breach of contract or breach of implied contract case can be the result of such a situation.
But, just because you don’t work for the government, have a contract or an anti-nepotism policy — that doesn’t mean you don’t have a case. Situations that look like nepotism can actually turn out to be a possible discrimination case. If you are being treated differently because of your gender, age, race, nationality or sexual orientation, you may have a violation of the law taking place. Such cases are generally fact specific and will require an interview with an experienced law office to determine what is happening.