In California, arbitration agreements will be deemed "unconscionable" if they concern discrimination or "public policy" causes of action, unless they comply with the procedural requirements set forth in Armendariz v. Foundation Health Psychcare Services.
Armendariz requires, among other things, "neutral arbitrators, more than minimal discovery, a written award, and all of the types of relief that would otherwise be available in court and, in addition, "'do[] not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum.'"
Many an arbitration agreement has been invalidated under Armendariz, either because the arbitration agreement shifted costs to the employee, did not provide for discovery, or unduly limited remedies. There also is the argument that Armendariz requires "mutuality," which means that if an agreement is not entirely mutual, it is invalid as unconscionable.
Well, in Giuliano v. Inland Empire Personnel, the plaintiff sued for breach of contract, alleging he was not paid bonuses or severance to which he was entitled. He signed an arbitration agreement that probably would have failed under Armendariz. But the Court of Appeal here said that because no FEHA or public policy claim was at issue, Armendariz did not apply.
This decision is significant, because many employers are sued for breach of contract, fraud, and other causes of action not involving discrimination or harassment If Armendariz does not apply, employers will have significant freedom to include in these arbitration agreements terms that would not normally be upheld under Armendariz, e.g., a waiver of entitlement to punitive or tort damages, short statute of limitations, carve-outs permitting the employer to seek injunctive relief, etc. Employers seeking to change arbitration provisions must have them carefully reviewed by counsel - not kidding.
DGV
Ca Supreme Court: Three-Year Statute of Limitations for Meal Periods Claims
Murphy v. Kenneth Cole Productions was supposed to be the case in which the California Supreme Court once and for all held that meal period penalties are in fact penalties and not wages. Wrong again! The high court unanimously held that meal period premiums are "wages," not penalties. So much for all the press on the hotly divided court at oral argument.
Anyway, so what? Well.....wage claims are covered by a three-year statute of limitations; penalty claims are covered by a one-year statute. Three years is three times longer than one year, which may result in larger claims and larger awards .
If you care about such things, this case kind of smarts. But wait...there's more.
The Supreme Court also held that appeals of Labor Commissioner decisions to Superior Courts may include new claims not litigated on the administrative level. That means that employees may lose a claim at the Labor Commissioner level, appeal, and assert entirely new theories in court for the first time as part of the simple appeal "de novo" process. I suppose it also means that employers may appeal Labor Commissioner decisions and face entirely new claims at the Superior Court level.
DGV
Anyway, so what? Well.....wage claims are covered by a three-year statute of limitations; penalty claims are covered by a one-year statute. Three years is three times longer than one year, which may result in larger claims and larger awards .
If you care about such things, this case kind of smarts. But wait...there's more.
The Supreme Court also held that appeals of Labor Commissioner decisions to Superior Courts may include new claims not litigated on the administrative level. That means that employees may lose a claim at the Labor Commissioner level, appeal, and assert entirely new theories in court for the first time as part of the simple appeal "de novo" process. I suppose it also means that employers may appeal Labor Commissioner decisions and face entirely new claims at the Superior Court level.
DGV
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