Source: http://kruismediation.com/cgi-bin/adrcases.cgi?case=ADR20161207.htm
Timestamp: 2017-12-12 00:49:21
Document Index: 112770412

Matched Legal Cases: ['§ 2698', '§ 2699', '§ 2698', '§ 1', '§ 4301', '§ 1', '§ 4322', '§ 1', '§ 2698']

In PAGA Wage and Hour Claim, Employer May Not Compel Arbitration To Determine If Plaintiff Is "Aggrieved Employee" Under Labor Code Because the "Individual" and "Representative" Claims Cannot Be Split
In Perez v. U-Haul (2016) 3 Cal. App. 5th 408, Plaintiffs signed mandatory arbitration agreements as a condition of their employment with defendant. They later filed a representative action under the Private Attorneys General Act of 2004 ("PAGA," Lab. Code § 2698 et seq.), claiming wage and hour violations under the Labor Code, including overtime and meal break violations. Defendant moved to compel Plaintiffs to individually arbitrate the issue of whether they qualified as "aggrieved employee[s]," a prerequisite under PAGA in order to have standing to bring the representative action under Lab. Code § 2699(a). Defendant requested the trial court to stay all other PAGA issues pending the arbitration. Concluding that California law prohibits an employer from compelling an employee to split the litigation of a PAGA claim between multiple forums, the trial court denied the motion.
Affirmed. In Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal. 4th 348, the California Supreme Court held that an employee's right to bring a PAGA claim is "unwaivable" because the suit is brought by an employee as a proxy for California's labor law enforcement agencies. Since it is not an individual claim brought by an employee against the employer, but a representative action on behalf of the state, allowing an employer to split the "individual" and "representative" components is contrary to PAGA's public policy of protecting the public. Thus, the trial court correctly denied defendant's motion to compel arbitration.
Likewise, Bloomingdale's Cannot Compel Arbitration of Employee's Individual PAGA Claim Where Representative Action Waiver Remains Unenforceable Under 'Iskanian.'
In Tanguilig v. Bloomingdale's Inc., (2016) 5 Cal. App. 5th 665, Plaintiff was a Bloomingdale's employee who filed a representative action on behalf of herself and other employees under the Labor Code Private Attorneys General Act of 2004 ("PAGA," Lab. Code § 2698 et seq.) alleging various Labor Code violations. Defendant moved to compel arbitration of Plaintiff's "individual PAGA claim" and stay or dismiss the remainder of the complaint. The trial court denied the motion.
Affirmed. Under Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal. 4th 348, and consistent with the Federal Arbitration Act ("FAA," 9 U.S.C. § 1 et seq.), a PAGA representative claim is nonwaivable by a plaintiff-employee via a pre-dispute arbitration agreement with an employer. Furthermore, a PAGA claim (whether individual or representative) cannot be ordered to arbitration without the state's consent.
Employer May Compel Servicemember To Arbitrate Employment Dispute Because Uniformed Services Employment And Reemployment Rights Act Does Not Prohibit Arbitration Of Claims Arising Under Its Provisions
In Ziober v. BLB Resources, Inc., 839 F. 3d 814 (9th Cir. 2016), Plaintiff was a servicemember in the U.S. Navy Reserve, and employed as a civilian by Defendant, a real estate and marketing firm. Plaintiff signed an agreement with Defendant requiring the arbitration of legal disputes. After his deployment to Afghanistan, Plaintiff filed suit in district court alleging Defendant fired him in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA," 38 U.S.C. § 4301 et seq.), which establishes employment rights for returning servicemembers. Defendant moved to compel arbitration. The district court granted the motion and dismissed the action.
Affirmed. The U.S Supreme Court has consistently recognized the "liberal federal policy favoring arbitration agreements" established by the Federal Arbitration Act (9 U.S.C. § 1 et seq.). An exception to this pro-arbitration mandate will arise where a "contrary congressional command" exists. USERRA provides that a servicemember may either pursue litigation through the Secretary of Labor or Attorney General, or "may directly pursue a civil action in federal court" (38 U.S.C. §§ 4322 - 4323). Plaintiff argued those provisions bestowed in him a procedural right to sue in federal court that preempted any contractual agreement to arbitrate. However, USERRA expresses no such right, nor does its legislative history. The district court's order compelling arbitration and dismissing the action was correct.
Ninth Circuit Holds For the First Time That Equitable Tolling Applies To the Federal Arbitration Act - Decision Rendered By Impostor Attorney Vacated
In Move, Inc., v. Citigroup Global Markets. Inc., Move, Inc., v. Citigroup Global Markets. Inc., 840 F. 3d 1152 (9th Cir. 2016), Plaintiff maintained an investment account with Defendant, and signed a "Client Agreement" that included an arbitration provision whereby "all claims or controversies ... shall be determined by arbitration before, and only before, any self-regulatory organization or exchange in which [Citigroup] is a member." Later, Plaintiff commenced arbitration proceedings before a three-member panel of the Financial Industry Regulatory Authority (FINRA) alleging Defendant mismanaged $131 million of Plaintiff's funds by investing in speculative auction rate securities. Pursuant to FINRA rules, the parties were furnished with a list of 30 arbitrators along with their employment histories. Because the matter involved complex security issues, Plaintiff selected James H. Frank, whose Arbitrator Disclosure Report reflected that he was a licensed attorney in three states. After an adverse arbitration award, Plaintiff discovered that Frank was unlicensed and impersonating a retired California attorney with a similar name. Plaintiff sought vacatur of the arbitration award. The district court held equitable tolling was available under the Federal Arbitration Act ("FAA," 9 U.S.C. § 1 et seq.), but denied the motion because Plaintiff had not demonstrated grounds to justify vacatur outside the 90-day limitation period under the FAA.
Reversed and remanded. "It is hornbook law that limitations periods are customarily subject to equitable tolling ... unless tolling would be inconsistent with the text of the relevant statute." Young v. United States, 535 U.S. 43, 49 (2002). The Supreme Court has instructed the lower courts to apply equitable tolling in cases where, as here, the limitations period is not "usually generous," or is not in "unusually emphatic form." Furthermore, equitable tolling is not inconsistent with the FAA, "nor undermine [its] basic purpose," since the Act "relies on the assumption that the [arbitration] forum is fair." Vacatur was appropriate here because Plaintiff relied on Frank's falsified credentials that "deprived [Plaintiff] of a fundamentally fair hearing." Therefore, the district court should have granted Plaintiff's motion for vacatur.
Uber's Motion To Compel Arbitration Incorrectly Denied By District Court Because Delegation Clause Clearly And Unmistakably Gave Arbitrator, Not Court, Authority To Decide Threshold Issue Of Arbitrability
In Mohamed v. Uber Technologies, Inc., 836 F. 3d 1102 (9th Cir. 2016), Abdul Mohamed and Ronald Gillette, former Uber drivers, claimed Uber overreached in its credit checks of them. They brought a putative class action in district court alleging violation of the Fair Credit Reporting Act and various state statutes. Gillette also brought a representative action under the Private Attorneys General Act of 2004 ("PAGA," Lab. Code § 2698 et seq.) alleging he was misclassified as an independent contractor rather than an employee. Uber moved to compel arbitration. The district court denied the motion and Uber timely appealed.
Reversed in part and remanded. Whether the court or arbitrator decides arbitrability is generally for judicial determination "unless the parties clearly and unmistakably provide otherwise." (Oracle Am., 724 F.3d at 1072 (quoting Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) emphasis in original)." Uber's arbitration provisions clearly and unmistakably delegated the question of arbitrability to the arbitrator, except the issues of class certification, collective actions, and representative claims. Therefore, the question of arbitrability as to all but Gillette's PAGA claim shall be decided by the arbitrator. Under the terms of the agreement Gillette signed, the PAGA waiver was severed from the arbitration provision, and Gillette's PAGA claim remanded to the district court to proceed on a representative basis.
Landowner's Motion To Compel Arbitration Against Low-Income Mobilehome Owners Renting Land Properly Denied Where Arbitration Provision Was Both Procedurally and Substantively Unconscionable
In Penilla v. Westmont Corporation (2016) 3 Cal. App. 5th 205, Plaintiffs were 60 primarily low-income mobilehome owners who rented the land beneath their homes from defendant. The rental agreements included an arbitration provision. Plaintiffs brought suit for contract, tort, and statutory causes of action. Defendant moved to compel arbitration. The trial court denied the motion finding the arbitration provision procedurally and substantively unconscionable.
Affirmed. The arbitration provision was procedurally unconscionable since it failed to disclose arbitration fees that were cost-prohibitive, and was neither provided in a Spanish-language copy nor explained to those who did not understand English. The arbitration provision was substantively unconscionable because it imposed arbitral fees that were unaffordable, or would have substantially deterred plaintiffs from asserting their claims. The finding of substantive unconscionability was further supported by the shortened limitations period for many of the causes of action, and limitations of remedies available in arbitration for statutory claims. Since the arbitration provision was both procedurally and substantively unconscionable, it was unenforceable. The trial court correctly denied the motion to compel arbitration.
'Sandquist' Requires Arbitrator, Not Court, To Determine Availability of Class Arbitration Where Arbitration Clause In Employment Application Ambiguous
In Nguyen v. Applied Medical Resources Corporation (2016) 4 Cal. App. 5th 232, Plaintiff sought employment with Defendant. He signed an employment application that included an arbitration clause requiring arbitration of all disputes that "arise out of or relate to my employment." Plaintiff later brought a putative class action alleging wage and hour claims. Defendant moved to compel individual arbitration. The trial court granted the motion to compel and struck all class and representative claims except for the representative Private Attorney General Act cause of action. Plaintiff timely appealed and his appeal was treated as a petition for writ of mandate.
Petition granted in part. Subsequent to the trial court's order compelling individual arbitration, the California Supreme Court rendered its decision in Sandquist v. Lebo Automotive, Inc., (2016) 1 Cal. 5th 233, holding that the arbitrator, and not the court, shall decide the availability of class arbitration when the arbitration clause is ambiguous on the issue. Therefore, the trial court erred in dismissing the class claims because whether the arbitration provision contemplated class arbitration was a question for the arbitrator to decide, not the trial court. Remand was required and the availability of class arbitration shall be determined by the arbitrator in the first instance.