Arbitration Agreements

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Arzate v. Ace American Insurance Company, — Cal. Rptr. 3d — (2025) began as a familiar case: plaintiffs signed arbitration agreements (“Agreement”) with their employer that contained a class action waiver. But when a dispute arose, plaintiffs disregarded their Agreements and filed a class action lawsuit. The defendant filed a motion to compel arbitration. The trial court granted the motion, enforced the class action waiver, and stayed the action pending arbitration.Continue Reading Plaintiffs, Not Defendants, Must Initiate Arbitration

On February 3, 2025, the California First District Court of Appeal held that a party to an arbitration agreement cannot rely on a choice-of-law provision to wire around the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “EFAA”). The case, Casey v. Superior Court, clarifies that a party cannot circumvent the EFAA and compel a dispute to arbitration by using a pre-litigation choice-of-law provision.Continue Reading Choice-of-Law Provisions Cannot Circumvent Ending Forced Arbitration Act, Court of Appeal Rules

California’s Private Attorneys General Act (PAGA)[1] allows “aggrieved employees” to sue their employers for Labor Code violations to collect civil penalties “on behalf of himself or herself and other current or former employees.” The issue of how to resolve PAGA claims where the employee and employer are subject to a binding arbitration agreement has been hotly contested over the last several years, as reported many times in this blog [see here, here, and here].Continue Reading PAGA Plaintiffs Cannot Avoid Arbitration by Bringing a “Headless PAGA Lawsuit”

Two recent decisions from the California Courts of Appeal could have massive ramifications for employers seeking to enforce arbitration agreements. Specifically, each court each held that the Ending Forced Arbitration of Sexual Harassment Act (“EFAA”) prohibits separating and arbitrating wage and hour claims that are part of the same suit as a sexual harassment claim. These holdings give plaintiffs’ lawyers a new tool try and defeat arbitration agreements and keep cases in litigation. Accordingly, California employers should be prepared for an influx of sexual harassment claims being tacked on to otherwise unrelated wage and hour lawsuits.Continue Reading California Courts Greatly Expand Scope of “Ending Forced Arbitration of Sexual Harassment Act”

On March 12, 2024, the Ninth Circuit published a decision in Ortiz v. Randstad Inhouse Services, LLC, holding that the Plaintiff Adan Ortiz (“Plaintiff”) qualified as a “transportation worker” under the Federal Arbitration Act, and was thus exempted from mandatory arbitration under the FAA. The district court rejected the employer’s arguments that Plaintiff was bound by the arbitration mandate under the FAA because he performed duties on a purely local basis. This case continues to establish that the scope of the “transportation worker” exemption under the FAA is broader than only those workers that physically move goods or people across state lines, such as truck drivers and cargo pilots.Continue Reading Ninth Circuit Finds Shipping Warehouse Employee Qualified as Exempt “Transportation Worker” Under the Federal Arbitration Act

On May 10, 2024, the Ninth Circuit decided Yuriria Diaz v. Macy’s West Stores, after the employer appealed the district court’s decision ordering arbitration of both an employee’s individual and non-individual claims under the California Private Attorney Generals Act (PAGA). The Ninth Circuit held that even though the arbitration agreement made no mention of PAGA, an employee’s individual PAGA claim was still subject to arbitration because the parties’ intended to arbitrate all employment disputes between them. However the non-individual PAGA claims were not arbitrable, because the parties did not consent to arbitration of those claims. Continue Reading Ninth Circuit Rules That Only Individual PAGA Claims Can Be Compelled to Arbitration

On February 12, 2024, the Ninth Circuit in Johnson v. Lowe’s Home Centers, LLC, 93 F.4th 459 (9th Cir. 2024) vacated a district court’s dismissal of a former employee’s nonindividual PAGA claims and remanded the nonindividual claims to allow the district court to apply California law as interpreted in Adolph v. Uber Techs., Inc., 14 Cal. 5th 1104 (2023) (“Adolph”).Continue Reading Ninth Circuit Applies Adolph, Vacating Lower Court’s Dismissal of Employee’s Nonindividual PAGA Claims

In the past few months, California Governor Newsom has signed numerous new employment laws affecting California employers of all sizes. Below is a summary of some of the laws going into effect in 2024.Continue Reading Looking Ahead: New California Employment Laws for 2024

On October 10, 2023, California Governor Newsom signed into law S.B. 365, a bill that amends California Code of Civil Procedure Section 1294. The new law provides that when a party appeals an order denying a motion to compel arbitration (an order which is immediately appealable), the trial court is not obligated to stay the action during the pendency of the appeal. The law marks a major shift in California civil procedure law.Continue Reading New California Law Prohibits Automatic Stay of Trial Court Action When Appealing Denial of a Motion to Compel Arbitration

In Coinbase, Inc. v. Bielski, the Supreme Court of the United States resolved a circuit split over whether district courts must stay proceedings while an interlocutory appeal of a denial of a motion to compel arbitration is ongoing. The Supreme Court held they must.Continue Reading Supreme Court Eases the Ability for Employers to Appeal Denials of Motions to Compel Arbitration in Federal Court

On April 19, 2023, the California Court of Appeal held that an employer’s arbitration agreement was unenforceable because of unconscionable terms found in other documents provided to employees during the onboarding process. The decision was certified for publication on May 10, 2023. In Alberto v. Cambrian Homecare (Apr. 19, 2023, No. B314192) ___Cal.App.5th, the Court of Appeal affirmed the trial court’s decision that a standalone arbitration agreement was unconscionable based on terms contained within the employer’s confidentiality agreement. Because the arbitration and confidentiality agreements were presented to the employee at the time of hire and related to the employee’s employment, the Court found that the employer’s confidentiality agreement was part of the “contract” to arbitrate, and the two agreements must be read together. The Court then reasoned that unconscionable terms in the confidentiality agreement permeated the arbitration agreement rendering it unenforceable. The Alberto decision is an important development for employers utilizing arbitration agreements along with other types of employment-related agreements as it creates a new risk of losing the benefits of arbitration.Continue Reading It Is Time to Check Your Onboarding Documents – Employer’s Confidentiality Agreement Renders Its Arbitration Agreement Unenforceable