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.

Association wins Victory on Dues Issue

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The California Teacher’s Association won a large victory for unions and organized labor in the United States Supreme Court on May 26, 2016. The justices deadlocked 4-4, which means that lower court’s ruling in the matter stands.

The case involved ten teachers from California and the Christian Educators Association International who jointly sued the California Teacher’s Association (CTA). The CTA is one of the largest and most powerful teachers’ unions in the country.

California is one of 23 states which requires public employees like teachers to pay a mandatory fee to the union even if the employee is not a union member. The state and unions reason that since all teachers benefit from the association’s collective bargaining efforts, then all teachers should pay for these costs.

The teachers argued that this “agency shop” law, which requires teachers to pay union fees as a condition of employment, is unconstitutional. The teachers believe that the rule violates their freedom of speech and freedom of association. Some teachers do not want to join the union because they disagree with unions in general, and others disagree with the CTA’s widespread political activities. Others simply do not believe they should be forced to pay money for an organization that they do not want to join.

The tied decision was expected after the death of Justice Antonin Scalia. Since the Court only has eight justices, a tie leaves the lower court decision in place but does not decide the issue permanently. The case can still be re-presented to the Supreme Court once a ninth justice is in place.

Many legal observers believed that Justice Scalia would have ruled against the unions. If this were the case, the decision would have caused a major blow to unions across the nation and would have greatly decreased their power. If the decision were overturned, non-union employees would no longer have to contribute to the union’s collective bargaining costs, and the impact would be substantial.

Anti-union activists have vowed to present the case again, and many believe that the issue is important enough that a full panel of justices will agree to re-hear the case. Unless or until that happens, California law still allows unions to charge non-members dues or fees in order to support their activities.

Painkiller Maker Pays Massive Class Action Settlement in False Claims Case

321516A drug that may be a distant memory for users made headlines recently when a case against the manufacturer settled for more than $800 million recently. Although it hasn’t been on the market since 2004, the painkiller Vioxx is still making headlines and costing its maker millions of dollars.

The company pulled the pills from the market when it was determined it could increase stroke and heart attack risks in patients. The drug company agreed to resolve a class action lawsuit by paying $830 million to shareholders recently. The shareholders argued the drug maker made misleading statements about its safety while it was still being prescribed.

The drug was introduced in 1999. The lawsuits began in 2003. They were consolidated in a case under a New Jersey federal judge and the group was certified as a class – meaning it can proceed as one action on behalf of many different parties – in 2013.

Shareholders alleged the drug company knew of the safety risks before the drug reached the market, then tried to minimize risks as problems began to publicly emerge while the drug was still being prescribed. The drug company denied allegations in court documents. Part of the case went to the U.S. Supreme Court, where it was unanimously ruled that investors hadn’t waited too long to bring their cases.

The company also faced a list of product liability class action lawsuits alleging that patients suffered heart attacks or strokes due to the drugs, and that the company failed to warn them properly of the risks. Merck admitted no liability as part of the settlement.
The company also agreed to pay $950 million to resolve accusations by the U.S. Department of Justice and state governments alleging the company lied to governments about the drug safety, and marketed it for uses not covered by the approval of the Food and Drug Administration. Merck pleaded guilty to a misdemeanor for violating federal drug laws by promoting Vioxx for use in the treatment of rheumatoid arthritis before the FDA approved it to do so.