Recent Employment Law Decisions

California Courts of Appeal

A defendant will waive its right to arbitrate if it participates in a Labor Commissioner hearing, even if it unsuccessfully moved the Labor Commissioner to dismiss the case so it could pursue arbitration. The right to arbitrate must be invoked by a superior court petition for stay of the hearing and a petition to compel arbitration

FLEMING DISTRIBUTION v. YOUNAN

PLAINTIFF FILED A COMPLAINT FOR UNPAID WAGES WITH THE LABOR COMMISSIONER

Plaintiff/Respondent Alfonus Younan filed a complaint with the Labor Commissioner in June 2017, alleging Defendant/Appellant Fleming Distribution’s failure to pay commission.

After a full evidentiary hearing, in which Fleming Distribution participated, the Labor Commissioner awarded Younan a total of $27,412.60.

FLEMING DISTRIBUTION OBJECTED, AND ASSERTED ITS RIGHT TO ARBITRATE SEVERAL TIMES

At least twice, Fleming Distribution wrote a letter to the Labor Commissioner, attaching a copy of its arbitration agreement with Younan. In each letter, Fleming Distribution requested that the Labor Commissioner honor the agreement and dismiss the matter so that it could be arbitrated. In each letter, Fleming Distribution stated that it would file a petition with the Superior Court if the Labor Commissioner did not comply.

The Labor Commissioner did not comply, and held a hearing. At that hearing, Fleming Distribution moved for dismissal so that it could have the matter heard in arbitration. The Labor

Commissioner denied the motion, finding that Fleming Distribution had not petitioned the superior court for a stay, and that there was therefore no reason to stay the hearing.

After the adverse ruling, Fleming Distribution appealed to the superior court for a trial de novo. It included arbitration as an affirmative defense. At this point, nearly two years later, Fleming Distribution petitioned the superior court to compel arbitration.

THE SUPERIOR COURT DENIED THE PETITION TO COMPEL ARBITRATION

The Superior Court denied the petition. It held that Fleming Distribution had waived its right to arbitrate by acting in a manner inconsistent with the desire to arbitrate by participating in a full evidentiary hearing. Moreover, its delay of two years before filing a petition to compel arbitration was unreasonable.

FLEMING DISTRIBUTION WAIVED THE RIGHT TO ARBITRATE

The appellate court examined only the issue of waiver, as this was dispositive. The court found that, although participating in litigation does not immediately waive the right to arbitrate, it will do so at some point in continued litigation.

Because waiver must be knowing and voluntary, the Court of Appeals pointed out that Fleming Distribution twice stated that it would file a petition with the superior court, and then actually did so once in the superior court. This indicated that Fleming Distribution knew of its ability to do so, and chose not to.

It did not matter that Fleming Distribution asserted its right to arbitration by letter, argument and motion before the Labor Commissioner. The correct course of action was to petition the superior court, and Fleming Distribution did not do it.

Prejudice to Plaintiff Younan was shown by undue delay, and by the necessity of hiring an attorney to represent him in the superior court, although the latter was not necessary to the result.

CONCLUSION

Although waiver is not to be found lightly, a defendant that acts inconsistently with its right to arbitrate will be found to have waived that right under the appropriate circumstances.

COA, 1st Dist., Div. 3, Filed 4/23/20, certified for publication 5/15/20; Opinion by Justice Petrou.

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Message from the Chair
By Elizabeth Riles, Esq., CELA Chair

As Goes California, So Goes the Nation: High Court Protects LGBTQ+ Workers

Elizabeth Riles

History happens every day, but it has never felt so present as it has in 2020. With all that is happening, it was such a great pleasure to experience the sweeping landmark decision of the United States Supreme Court in Bostock v. Clayton County.

In a 6-3 decision written by Justice Neil Gorsuch, the Supreme Court held that Title VII prohibits discrimination based on sexual orientation and gender identity. The Supreme Court found that “sex” is a distinct characteristic but inseparable from the concepts of sexual orientation and gender identity and as such “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex” — exactly what is forbidden by Title VII.

It has been a long battle to remedy the invidious discrimination that the LGBTQ+ community suffers in workplaces across the country. Finally, LGBTQ+ workers in all states will be protected from discrimination in the workplace, a benefit long enjoyed by workers here in California. This is an historic step toward true equality, the promise America has made to everyone.

Moreover, not only has the Court granted protections to LGBTQ+ workers, but the ruling rests on an argument that could provide expanded discrimination protections for other classes of

employees. The way that causation is discussed makes it clear that if the protected characteristics play a role, any role in the decision, then the decision is discriminatory. For that reason, Bostock v. Clayton County could expand when discrimination is found and could be useful in all kinds of discrimination cases, not just LGBTQ+.

I am extremely proud to continue in the work we all do and to be part of this organization that continues to be at the forefront of pushing to ensure we live up to the promise of equality.

Hooray and Hallelujah!

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