Arbitration Archives - Page 2 of 2

An Epic Dissent: Justice Werdegar Nails it in Iskanian

Hunter PyleJune 30, 2014June 27, 2023

The majority opinion in Iskanian has been discussed at length, both here and in every other employment blog that touches on California law. What has been overlooked, however, is the incredibly eloquent and persuasive dissenting (and concurring in part) opinion written by Justice Kathryn Werdegar.

The fundamental points made by Justice Werdegar are that (1) class actions are a form of collective action; (2) Congress has made it clear for eighty years that contracts that strip employees of the right to engage in collective action are illegal; and (3) therefore class action waivers are illegal and unenforceable.

Continue reading “An Epic Dissent: Justice Werdegar Nails it in Iskanian” →

Ninth Circuit Clarifies Some Issues and Ducks Others Regarding Arbitration Agreements

Hunter PyleJune 30, 2014June 27, 2023

The Court of Appeal for the Ninth Circuit recently issued a pair of decisions that help to clarify the law surrounding arbitration agreements: Davis v. Nordstrom (holding that no particular form of notice is required to modify existing arbitration agreements) and Johnmohammadi v. Bloomingdale’s (opportunity to opt out of arbitration agreements with class action waiver defeats argument that federal labor laws bar such waivers).

In Davis v. Nordstrom, Inc. (9^th Cir.2014) 2014 DJDAR 8019 the court clarified the law with respect to whether and how an employer can modify an existing arbitration agreement so as to prohibit class actions. The plaintiff in Davis had received an employee handbook that required arbitration but permitted class actions. In 2011, Nordstrom revised the arbitration agreement to bar class actions.

Continue reading “Ninth Circuit Clarifies Some Issues and Ducks Others Regarding Arbitration Agreements” →

The Wolf Guarding the Henhouse: Should Arbitrators Decide Whether To Enforce Arbitration Agreements?

Hunter PyleMay 30, 2014June 27, 2023

When an employee files a lawsuit in court, and the employer tries to compel the employee to proceed in arbitration based on an arbitration agreement, who gets to decide whether the arbitration agreement is enforceable? Is it the judge who is presiding over the employee’s case? Or is it an arbitrator? For more than five years, the rule in California-which we think is fair-has been that the judge decides. However, the recent decision of Tiri v. Lucky Chances, Inc. (May 15, 2014) 2014 DJDAR 6103 introduces confusion into this previously settled question. Continue reading “The Wolf Guarding the Henhouse: Should Arbitrators Decide Whether To Enforce Arbitration Agreements?” →

The California Supreme Court and the fate of Class Actions

Hunter PyleApril 4, 2014June 27, 2023

The California Supreme Court heard oral argument on April 3, 2014, in a case that is likely to significantly shape the landscape of class actions in both state and federal court: Iskanian v. CLS Transportation, No. S204032. The Supreme Court granted review in Iskanian to resolve two important questions: Continue reading “The California Supreme Court and the fate of Class Actions” →

The Profoundly Negative Impact of Arbitration on Workers’ Rights

Hunter PyleMarch 6, 2014June 27, 2023

Lawyers who represent employers regularly argue that there is no real difference between arbitration and jury trials. They contend that arbitration does not affect the outcomes of cases. And, it is “cheap and quick,” and the employer pays for the arbitrator. So what are workers complaining about, anyway? But as more and more employment cases […]

If You Care About Your Rights In The Workplace, You Should Care A Lot About Italian Colors

Hunter PyleJune 24, 2013June 27, 2023

For many years, the United States Supreme Court has recognized that an agreement to arbitrate will not be enforced if it prevents the effective vindication of federal statutory rights. This rule, called the “effective vindication rule,” has its origins in a case from 1985 called Mitsubishi Motors v. Soler, 473 U.S. 614. Its purpose is simple: to prevent corporations (and others) from crafting arbitration agreements that will for all practical purposes deprive ordinary people of their day in court.

Significantly, from 1985 until now, the effective vindication rule has been repeated and reiterated over and over again. As Justice Kagan’s forceful dissent in American Express v. Italian Colors explains:

[I]n the decades since Mitsubishi, we have repeated its admonition time and again, instructing courts not to enforce an arbitration agreement that effectively (even if not explicitly) forecloses a plaintiff from remedying the violation of a federal statutory right. Slip Op. at 4.

Unfortunately, on June 20, 2013, five justices on the Supreme Court decided that almost 30 years of the effective vindication rule had come to an end. In Italian Colors, those five justices compelled a small company to arbitrate its claims against the gigantic American Express Corporation (“Amex”). Continue reading “If You Care About Your Rights In The Workplace, You Should Care A Lot About Italian Colors” →

Saving Your Constitutional Right To A Day In Court: The Arbitration Fairness Act

Hunter Pyle LawJune 14, 2013June 27, 2023

Imagine after months of unemployment (not hard to imagine these days), you survive a rigorous application and interviewing process to finally arrive at that climactic moment of landing a job. In your state of euphoria, and as day one as a perfect no-hassle employee. You hastily review and sign the standard new hire documents you’re given, knowing that there is nothing you could do about the content, anyways. You sign everything and vaguely hope you haven’t signed away the soul of your first born.

A while later, well after the new job excitement has worn off, you realize that maybe you should be getting paid for overtime, or maybe your supervisor should stop referring to you by a racial nickname. Maybe you complain about these new discoveries in your workplace, and are promptly fired.

No problem! You know you have rights. You contact an attorney with the intention of filing a lawsuit. Then you realize, those new hire documents you signed on day one have come back to haunt you. You’re informed that you signed an arbitration agreement and have to submit to binding arbitration. Binding arbitration with an arbitrator chosen (and paid) by your now nemesis. Continue reading “Saving Your Constitutional Right To A Day In Court: The Arbitration Fairness Act” →

Employers May Not Force Employees to Arbitrate PAGA Claims for Labor Code Violations

Hunter PyleJune 10, 2013June 27, 2023

Brown v. Superior Court, Case No. H037271 (6th App. Dist. June 5, 2013) represents another important victory for workers in California. In Brown, the court held that employers may not force employees to arbitrate their claims under California’s Private Attorney General Act, Labor Code section 2698, et seq., also known as “PAGA.” This is because PAGA claims are representative actions intended to advance a public purpose. A private agreement attempting to waive the right to take such representative actions is unenforceable because it prevents employees from exercising their unwaivable statutory rights.

In Brown, the plaintiffs had signed an arbitration agreement that waived their right to pursue any type of class or representative action. In their lawsuit, the plaintiffs brought claims for unpaid wages and overtime, among others. They also brought claims under PAGA. (Many sections of the California Labor Code provide for civil penalties, often in the amount of $50 or $100 per violation. PAGA allows employees to bring representative actions to recover those penalties in representative actions brought on behalf of other employees.)

The employer then attempted to force the plaintiffs to arbitrate all of their claims, including their PAGA claims. If successful, this would have resulted in the plaintiffs losing their right to pursue claims on behalf of other employees. The trial court agreed with the employer. However, the Court of Appeal for the Sixth Appellate District blocked the employer from doing so. Continue reading “Employers May Not Force Employees to Arbitrate PAGA Claims for Labor Code Violations” →