Arbitration Employment Lawyers

Forced Arbitration

When there are disputes in employment, arbitration is a private and out-of-court process forced on employees by employers that are used to resolve employment disputes on terms more favorable to the employer than jury trials. An arbitrator, who is a neutral third-party decision maker, listens to both the employer and employee’s side of the case and decides the outcome. Nowadays, many employers require their employees to agree to resolve disputes through arbitration instead of going to court as a condition of their employment. Usually, this is accomplished by way of a form document contained in a stack of documents handed to the employee on the first day of employment, along with an instruction to sign all of the documents as quickly as possible.  Employers never explain the consequences of signing such a form.

Greg Helmer secured a $1.7 Million arbitration award from Arbitrator Stefan Mason in an age discrimination and harassment case.

At Helmer Friedman LLP, we assist clients in understanding the complex process of forced employment arbitration and work hard to achieve the most favorable outcome for them. Our team of skilled lawyers has a wealth of experience in advocating for clients in arbitral forums. Indeed, name partner, Greg Helmer, secured a $1.7 Million arbitration award from Arbitrator Stefan Mason in an age discrimination and harassment case. At the time, this was the largest such arbitration award in the country. Notwithstanding Mr. Helmer’s achievement, forced arbitration is quite literally stacked in favor of the employer.  See, e.g., Jessica Silver-Greenberg and Robert Gebeloff, Beware The Fine Print – Part I – Arbitration Everywhere, Stacking the Deck of Justice, The New York Times (October 31, 2015), accessible at https://www.nytimes.com/2015/11/01/business/dealbook/arbitration-everywhere-stacking-the-deck-of-justice.html; Jessica Silver-Greenberg and Michael Corkery, Beware The Fine Print – Part II – In Arbitration, a ‘Privatization of the Justice System’ The New York Times (November 1, 2015), accessible at https://www.nytimes.com/2015/11/02/business/dealbook/in-arbitration-a-privatization-of-the-justice-system.html. Commenting about Mr. Helmer’s case, the New York Times described how, after issuing the $1.7 Million award, employers boycotted Arbitrator Stefan Mason and he was never hired again and how that served as a loud warning to arbitrators to never find in favor of employees.

Have you, a friend, or a family member experienced forced arbitration?

Repeat Business

Fearful of losing business, some arbitrators pass around the story of Stefan M. Mason as a cautionary tale. They say Mr. Mason ruled in favor of an employee in an age discrimination suit, awarding him $1.7 million, and was never hired to hear another employment case.

While Mr. Mason’s experience was rare, more than 30 arbitrators said in interviews that the pressure to rule for the companies that give them business was real.

Arbitration Law Updates

This past year, there were a lot of employment decisions to keep up with. Some of them were really important for employers, but most of them were in favor of employees. One area that had a lot of activity was forced arbitration. Let’s take a look at some of the cases that came up.

  • The Supreme Court ruled that employers can enforce arbitration agreements for claims under the PAGA.
  • Non-individual PAGA claims cannot be adjudicated once an individual claim has been committed to a separate proceeding.
  • Justice Sotomayor’s opinion suggests ways to get around the Court’s decision, such as a change in the law or interpretation by California courts.
  • The Morgan v. Sundance case held that prejudice is not a condition of finding that a party waived its right to compel arbitration under the FAA.
  • Recent changes to the California Arbitration Act ensure timely payment of arbitration fees and provide remedies for non-compliance.
  • Instacart tried to force the San Diego City Attorney to arbitrate a dispute, but the Court of Appeal confirmed that the City was acting lawfully.
  • Employers must strictly adhere to the deadline for paying arbitration fees, with no exceptions allowed.

The Supreme Court ruled in Viking River Cruises, Inc. v. Moriana that the Federal Arbitration Act allows employers to enforce arbitration agreements, even for claims under the Labor Code Private Attorneys General Act of 2004 (PAGA). This ruling means that agreements with waivers of the right to bring representative PAGA claims will be enforced, similar to class action waivers. The Court also stated that non-individual PAGA claims could not be adjudicated once an individual claim had been committed to a separate proceeding.

Were you forced to sign an arbitration agreement for an employer?

Justice Sotomayor’s agreement with the majority vote in the Viking River case does not guarantee its long-term impact. Her opinion guides lawyers and lawmakers on how to get around the Court’s decision. For instance, she suggested that California courts could interpret California law or that the Legislature could amend PAGA to allow an employee to sue for PAGA claims on behalf of other employees even after losing individual standing to arbitrate. While the Viking River case is a positive outcome for employers, there are other arbitration cases where employees have won.

The Morgan v. Sundance, Inc. case held that prejudice is not a condition of finding that a party waived its right to compel arbitration under the FAA. The California Supreme Court is revisiting its decision in St. Agnes Med. Ctr. v. PacifiCare of Cal. where it held that prejudice is a condition of finding that a party waived its right to compel arbitration. In Dep’t of Fair Employment
and Hous. v. Cisco Sys., Inc. The Department of Fair Employment and Housing (DFEH) was not required to arbitrate claims of discrimination and retaliation brought against Cisco, even though the affected employee signed an arbitration agreement. The court held that the DFEH was not a signatory to the agreement and was acting independently.

Two Court of Appeal cases confirmed that recent changes to the California Arbitration Act are not overridden by federal law. These changes ensure timely payment of arbitration fees and provide remedies for non-compliance. One case involved Instacart, which tried to force the San Diego City Attorney to arbitrate a dispute. The City sought to protect the public interest, and the Court of Appeal agreed that the City was acting lawfully. The other case confirmed that employers must strictly adhere to the deadline for paying arbitration fees with no exceptions allowed.

Excerpted from Andrew H. Friedman & Ramit Mizrahi and Anthony J. Oncidi, The Top Cases of 2022, Cal. Lab. & Emp. L. R. Vol. 37 No. 1 (January 2023) – view source material here – https://www.helmerfriedman.com/docs/top_cases_2022_mizrahi_friedman_oncidi.pdf