Recent Employment Law Decisions

Ninth Circuit

Federal courts continue to express doubts about arbitration agreements in employment cases. Affirming the district court, the Ninth Circuit rejected an employer’s use of the alter ego doctrine to enforce an arbitral clause when the employer wasn’t a signatory to the agreement.

YANG v. MAJESTIC BLUE FISHERIES, LLC

Yang Died When The Employer’s Ship Sank In Fair Weather

Chang Yeol Yang was a seaman aboard the F/V Majestic Blue, the oldest ship in its fleet. The ship had been sold for a mere $10 to Defendant/Appellant Majestic Blue Fisheries by another company owned by the same family. Yang’s widow, Plaintiff/Respondent Esther Yang, alleged that the ship was not seaworthy, and that the crew was incompetent, resulting in the ship sinking in fair weather and her husband’s death at sea.

The Employer Tried To Enforce An Arbitral Clause

Because Respondent Majestic Blue Fisheries is a foreign entity, it attempted to enforce an arbitration clause through the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, an act implementing a treaty of the same name. The Ninth Circuit analyzed this law and determined that, because Majestic Blue Fisheries was not a signatory to the agreement with the arbitration clause, that Act specifically precluded its enforcement.

The Ninth Circuit Held That A Non-Signatory Can’t Use Equitable Arguments To Enforce Arbitration

More pertinent to employment practitioners, however, is the court’s analysis about Respondent’s attempt to use the equitable doctrines of alter ego, agency, and estoppel to enforce the arbitral clause.

Pointing out that Respondents had “affirmatively represented to the district court that Dongwon and Majestic were ‘separate and

distinct companies,’” in other litigation, the Ninth Circuit held that they could not then assert alter ego or agency theories here.

Most importantly, the Ninth Circuit analyzed California law to determine that “the alter ego rationale ‘applies only to’ breach of contract claims, and not statutory claims. The court rejected Respondents’ argument that federal law favors arbitration agreements, standing firm with consistent authority that “the federal policy . . . ‘is inapposite when the question is whether a particular party is bound by the arbitration agreement.’”

Conclusion

The courts continue to protect the rights of litigants to access the court system even in the face of arbitration agreements, especially when non-signatories seek to enforce them.

Ninth Circuit, November 30, 2017 opinion by Nguyen, 2015 WL 5003606

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Letter from the Editor
By Craig T. Byrnes

Craig T. Byrnes

Craig T. Byrnes

Welcome to the new CELA Bulletin!

For years, Joan Herrington has spearheaded the Bulletin with the support of CELA staff. My co-editor, Tracy Fehr and I, are proud that Joan has passed the baton to us, and we intend to make the most of it.

The CELA Bulletin will still be what it’s always been: a reliable source for the judiciary and anyone involved with the court system to learn about recent developments in employment law. It will also have some differences from what you’ve seen before. Tracy and I will provide our own analyses and commentary on the importance of each case.

We’ll select the most important cases, without trying to be inclusive of every case that could pertain to employment law. On the other hand, we may include cases that have some relevance not so obvious at first glance. For example, cases addressing civil procedure, insurance, and evidence may find their way into the CELA Bulletin if your editors think they have sufficient impact.

You’ll continue to see articles addressing practice issues, written by CELA practitioners and editorially vetted. Our Legislative Counsel & Policy Director, Mariko Yoshihara, will keep updating you on legislative developments in our practice area. CELA’s new President, Wendy Musell, will provide her insights in her own articles as well. We are grateful to our outgoing President, Jean Hyams, for working with us on this Bulletin and helping with the transition.

Tracy and I are also thankful that we will continue to receive the support of CELA Administrative Director Christina Krasomil, and CELA’s Administrative Assistant Alexandra Menna. Without them, this Bulletin would not exist, and you would not receive the high quality of information that it contains.

The CELA Bulletin will remain your most valuable source of information for recent developments in employment law. If you keep them available, you’ll find that you’ll collect a tremendous library of knowledge and practical information.

Thank you for subscribing to the CELA Bulletin. We’ll make it worth your while.

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