California Courts of Appeal
ARNOLD v. DIGNITY HEALTH
PLAINTIFF ARNOLD HAD REPEATED PERFORMANCE ISSUES AND WAS TERMINATED FOR VIOLATING PATIENT CONFIDENTIALITY WHILE ON FINAL WARNING
Plaintiff Virginia Arnold began working for Defendant Dignity Health in 2003 as a medical assistant. She was in her mid-50’s. Over the years, Arnold received some warnings for performance issues, and a final written warning and 3-day suspension in 2012. One of Arnold’s job duties was disposing of urine sample cups. She was required to wipe patient identifying information off each cup before throwing it away. Arnold’s new supervisor found a cup in the trash with patient information on it and blamed Arnold. Dignity Health found that Arnold did not take responsibility and was not honest during the investigation. Because Arnold was on final warning and it was not her first patient privacy violation, Dignity Health terminated her. Arnold sued for age discrimination. She contended that the Executive Director, who was never her direct supervisor, had made three age-based comments to her over a period of years, mostly surprise that Arnold was older than she appeared. Arnold’s previous supervisor also made three comments about her age over the years. Arnold additionally alleged that the Executive Director and others discriminated against her because she associated with Black employees. Dignity Health filed a motion for summary judgment, which was granted. Arnold appealed.
ARNOLD PROVIDED NO EVIDENCE IN SUPPORT OF HER CLAIMS
The Court of Appeal affirmed. Arnold’s appellate briefing did not provide proper analysis of most of her causes of action, therefore forfeiting her appeal as to those claims. The Court then analyzed Arnold’s sole remaining claim for discrimination based on age and association. Arnold presented no evidence that the two people who made allegedly ageist comments were involved in the decision to terminate her. Though Arnold alleged that they were involved, she provided no evidence to support this claim and offered only speculation and conjecture. The age comments were not indicative of animus where Arnold did in fact appear much younger than her age. Arnold’s declaration was insufficient where it vaguely referenced an intimidating and aggressive manner but did not say which comments or provide detail explaining how the benign comments were intimidating. Though it does raise a weak suspicion of discriminatory animus, without more, there is not substantial evidence to defeat summary judgment. Though Arnold complained about mistreatment of a Black coworker, the alleged perpetrator was not involved in Arnold’s termination, and Arnold provided no evidence that anyone involved in the termination decision knew of her complaint. On the whole, Arnold provided insufficient evidence to defeat summary judgment.
COA 3rd Dist. Filed 7/17/20, publication ordered 8/13/20. 53 Cal.App.5th 412. Opinion by Justice Duarte.
BLUE FOUNTAIN POOLS AND SPAS INC. v. SUPERIOR COURT (DAISY ARIAS)
DEFENDANT BLUE FOUNTAIN ALLOWED ONGOING SEXUAL HARASSMENT FOR YEARS, EVEN AFTER A CHANGE IN OWNERSHIP
Plaintiff Daisy Arias worked for Defendant Blue Fountain Pools and Spas for many years. Beginning just after her hire in 2006, supervisor Sean Lagrave harassed Arias. After she complained to management, Lagrave grabbed her butt and often touched her waist and hair when he passed her. He also bragged about his sexual prowess and talked about sex often. Arias reported all of this harassing conduct. Arias continued bragging about his sexual exploits and would show photographs of nude women and women performing sex acts to Arias. Arias continued to complain. In 2015, Farhadian purchased Blue Fountain. Arias hoped the new management would help her, and she continued to complain about Lagrave. Instead, Farhadian participated in the harassment. In April 2017, Lagrave screamed obscenities at Arias and physically assaulted her. In the ensuing days, Arias communicated with Farhadian that she was unable to work and was not feeling well and had gone to the hospital. Farhadian accused her of quitting and told her to pick up her final paycheck. Arias filed a DFEH complaint and received a right to sue notice on August 14, 2017. Arias filed a lawsuit the next day. The defendants filed a motion for summary adjudication, arguing that Arias’ sexual harassment claim was time-barred because the continuing violation doctrine did not apply. They argued the actions became permanent when Arias knew Blue Fountain would not stop the harassment, which was years before she filed a DFEH complaint. The trial court denied the MSA, and Blue Fountain filed a writ.
A DEFENDANT MAY NOT USE THE STATUTE OF LIMITATIONS AS A SWORD TO EXCLUDE UNLAWFUL CONDUCT OCCURRING WITHIN THE LIMITATIONS PERIOD
The Court of Appeal denied the writ, noting that Blue Fountain attempted to turn the statute of limitations from a shield to a sword. Under the continuing violations doctrine, an employer is liable for actions that occur outside of the statute of limitations period if such actions are sufficiently linked to unlawful actions that occurred during the limitations period. This allows employees to reach back in time to acts before the limitations period but does not allow an employer to bar claims within the limitations period if those claims are linked to claims outside the limitations period. Because Lagrave harassed Arias during the limitations period, including the April 2017 assault, denial of summary adjudication as to harassment was proper. In addition, the Court of Appeal further held that all of the harassing conduct since the 2015 change of ownership was part of a continuing violation. The trial court was also correct to consider evidence of Lagrave’s harassment during the 2006-2014 time period in its analysis.
CELA Involvement: Congratulations to CELA members Brian Hannemann of Hannemann Law Firm, APC and Jonathan Weinman of Broslavsky & Weinman, LLP.
COA 4th Dist., Div. 2. Filed 8/10/20. 53 Cal.App.5th 239. Opinion by Justice Slough.
DOE v. GOOGLE
PLAINTIFFS ALLEGED LABOR CODE VIOLATIONS BY GOOGLE AND ADECCO’S CONFIDENTIALITY POLICIES
Plaintiffs were employees with Google, placed there by Adecco. Both companies were considered joint employers for the purposes of the demurrers that they filed.
Plaintiffs alleged that Google and Adecco’s confidentiality policies prohibited them from discussing their wages, or from reporting illegal activities either internally or to government agencies. Plaintiffs alleged that these policies violated various provisions of the Labor Code, and sued under PAGA.
Meanwhile, one of the plaintiffs filed a complaint with the National Labor Relations Board, alleging violations of the National Labor Relations Act (“NLRA”) because of the policies, as well as his termination for violating those policies. The NLRB filed a complaint, which it ultimately settled in exchange for Google’s posting notice of employee’s rights. That settlement did not preclude the claims in the state courts.
THE TRIAL COURT SUSTAINED THE DEMURRER ON THE GROUNDS OF NLRA PREEMPTION
Both Google and Adecco demurred on the ground that the PAGA claims were preempted by the NLRA. The trial court ultimately sustained these demurrers without leave to amend. Plaintiffs timely appealed.
THE PAGA CLAIMS WERE NOT SUBJECT TO NLRA PREEMPTION
In examining the preemption issue, the appellate court looked to San Diego Bldg. Trades Council v. Garmon, 359 US 236 (1959) for the parameters of NLRA preemption. Although state laws addressing the same conduct prohibited by the NLRA are “presumptively preempted,” the court pointed out that there exist two analytically distinct types of exceptions to that rule under Garmon: (a) where the activity in question is merely a “peripheral concern” of the NLRA, and (b) where the conduct challenged is “deeply rooted in local feeling and responsibility . . . . “
Here, the plaintiffs sought to enforce Labor Code provisions that protect individual action, as opposed to the concerted action that is the stated purpose of the NLRA. The prohibition against discussing wages, for example, was made illegal by Labor Code §232 originally to help employees determine if they were being discriminated against on the basis of sex.
Moreover, the “local interest” exception to Garmon preemption applied because, as the US Supreme Court has said, labor standards are typically a matter left to the police power of the States. Furthermore, the NLRA was not enacted to enforce minimum labor standards, and thus the claims were of “peripheral concern” to the NLRA.
CONCLUSION
Labor Code claims, even when brought under PAGA on behalf of others, are not subject to NLRA preemption. Practitioners should be careful about filing concurrent claims with the NLRB, because the analysis – if not the outcome — might have been different had that body reached a decision on the merits or had Google admitted liability in the settlement agreement.
COA 1st Dist., Div. 4; Filed 9/21/20. Opinion by Justice Tucher.
MARSHALL v. WEBSTER
PLAINTIFFS LOST AN ANTI-SLAPP MOTION, MOVED FOR RECONSIDERATION, AND THEN APPEALED
Plaintiffs Richard and Susan Marshall sued Defendant Daniel Webster for defamation and intentional infliction of emotional distress. The Marshalls claimed that Webster, a reporter and author, had published false statements about them. Webster filed an anti-SLAPP motion pursuant to CCP §425.16. The trial court granted the motion on May 11, 2018 and invited Webster to move for fees and costs. The court served the notice on all parties the same day. Webster served the court’s order and its notice of entry on July 30, 2018. The Marshalls moved for reconsideration. The court awarded Webster fees on August 29, 2018 and denied the motion for reconsideration on November 15, 2018. The Marshalls filed a notice of appeal on October 25, 2018. Webster sought to dismiss the appeal as untimely, and the Court of Appeal did so.
A MOTION FOR RECONSIDERATION DOES NOT EXTEND THE TIME TO APPEAL AN APPEALABLE ORDER OR JUDGMENT
The Court of Appeal must dismiss an appeal if the notice of appeal is filed late. CRC 8.104 required the Marshalls to file a notice of appeal within 60 days of service of the notice of entry of the judgment or appealable order. An order granting an anti-SLAPP motion is appealable. The deadline for the Marshalls to appeal was therefore 60 days after they were served with the notice that the anti-SLAPP motion had been granted. The notice of appeal was due within 60 days of May 11th, the date that the court mailed the notice to the Marshalls. The Marshalls argued that the May 11th order was a memorandum of decision, and the formal order was not signed by the trial court until June 29th. The Court of Appeal rejected this argument because the May 11th ruling was signed, filed, and served and set forth a detailed factual and legal basis for the court’s decision. The wording clearly constituted a final decision on the merits of the motion. The motion for reconsideration did not extend the time to appeal because the May 11th order constituted an appealable judgment. Therefore, upon its entry, the trial court lost jurisdiction to decide a motion for reconsideration. A motion for reconsideration is ineffectual if filed after entry of judgment.
COA 3rd Dist. Filed 8/27/20, publication ordered 9/4/20. 54 Cal.App.5th 275. Opinion by Justice Krause.
MORGADO V. CITY & COUNTY OF SAN FRANCISCO
PLAINTIFF MORGADO RECEIVED FRONT PAY FOR HIS WRONGFUL TERMINATION
Plaintiff Morgado was a police officer with the City of San Francisco. A previous appeal upheld the trial court’s injunctive order to reinstate him following administrative appeal. and allow him front pay.
After repeated hearings and further appeal, the City reinstated Plaintiff Morgado and provided the front pay ordered by the court, but deducted income that Morgado had earned during his suspension as a mortgage broker. The City appealed a finding of contempt by the court and the court’s order not to apply the deductions to the front pay.
THE APPELLATE COURT FOUND THAT DEDUCTIONS WERE PROPER, BUT THAT THE CITY HAD MISCALCULATED
The appellate court looked to the rule for mitigation of damages, and pointed out that deductions for side income may be taken from an award of front pay if the income was of a sort that was inconsistent with the prior employment. In this case, the court found that Plaintiff Morgado could not have earned income as a mortgage broker while he was a police officer, and so the deduction could be had.
On the other hand, the only amount that the City was entitled to deduct was the post-tax, not pre-tax, income.
CONCLUSION
Defendants may deduct income from a front pay award if it that income would have been inconsistent with the previous employment.
COA 1st Dist., Div. 4. Filed 8/26/20. Opinion by Justice Streeter.
ROBINSON v. SOUTHERN COUNTIES OIL COMPANY
PLAINTIFF ROBINSON OPTED OUT OF A SETTLEMENT COVERING HIS CLAIMS AND ATTEMPTED TO SEEK DUPLICATIVE PAGA PENALTIES IN HIS LAWSUIT
Plaintiff Richard Robinson worked for Defendant Southern Counties Oil Company as a truck driver from February 2015 to June 2017. Robinson filed a PAGA action in August 2018 for meal and rest break violations. In February 2019, San Diego County Superior Court approved a settlement in a class action against Southern Counties that alleged the same Labor Code violations and also sought PAGA penalties. The San Diego settlement covered Southern Counties employees from March 2013 to January 2018. Robinson and three others opted out of the San Diego settlement. Robinson then amended his own complaint to represent employees who opted out of the San Diego settlement as well as those employed from January 2018 to the present. The trial court sustained a demurrer without leave to amend to Robinson’s amended complaint and entered judgment against Robinson. Robinson appealed, and the Court of Appeal affirmed.
ROBINSON WAS PRECLUDED FROM SEEKING PAGA PENALTIES BECAUSE THE OTHER LAWSUIT HAD ALREADY OBTAINED PAGA PENALTIES FOR THE SAME LABOR CODE VIOLATIONS
Claim preclusion, or res judicata, prohibits a second suit between the same parties on the same causes of action, if there has been a final judgment on the merits. There was no dispute that Robinson’s case and the San Diego case involved PAGA claims based on the same Labor Code violations. Robinson’s only argument was that claim preclusion did not apply because he opted out of the San Diego settlement. However, Robinson only opted out regarding his individual claims. There was no mechanism to opt out of the PAGA judgment. An aggrieved employee’s action under PAGA functions as a substitute for an action brought by the government itself, and when a government agency is authorized to bring an action and a private person lacks the independent legal right to bring the action, the person who is not a party but is represented by the agency is bound by the judgment as though that person were a party. The San Diego settlement and judgment resolved the LWDA’s claims with respect to Southern Counties’ meal and rest break violations. Robinson cannot opt out of that settlement and pursue civil penalties for the same violations on behalf of the LWDA. Claim preclusion therefore applies to the violations resolved by the San Diego settlement.
ROBINSON COULD NOT RECOVER PAGA PENALTIES FOR A TIME PERIOD DURING WHICH HE WAS NOT EMPLOYED BY DEFENDANT
Robinson additionally sought PAGA penalties for employees of Southern Counties after the time period covered by the San Diego settlement. However, Robinson was not an employee of Southern Counties during any of that time period and was not affected by any Labor Code violations. Since Robinson is precluded from bringing PAGA claims for the time period of his employment, he is also precluded from bringing claims after his employment.
COA 3rd Dist. Filed 7/17/20, publication ordered 8/13/20. 53 Cal.App.5th 412. Opinion by Justice Duarte.
COA 1st Dist., Div. 4. Filed 8/13/20. 53 Cal.App.5th 476. Opinion by Justice Pollak.
ROWAN v. KIRKPATRICK
DEFENDANT KIRKPATRICK’S NOTICE OF APPEAL WAS DUE DURING THE COVID-19 COURT HOLIDAYS
Plaintiff Rebecca Rowan and Defendant Kylie Kirkpatrick filed requests for civil harassment restraining orders against each other. Rowan also moved to declare Kirkpatrick a vexatious litigant. The trial court denied Kirkpatrick’s request, granted Rowan’s restraining order request, and granted Rowan’s vexatious litigant motion. Rowan served Kirkpatrick notices of the three rulings on February 25, 2020, February 26, and March 6, respectively. On March 17, 2020, Napa County Superior Court reduced court operations due to the COVID-19 pandemic. On March 18th, the Superior Court declared March 18th through April 10th court holidays for purposes of calculating time for filing papers. The court thereafter extended the holiday closure period through May 29th. Napa County Superior Court reopened on June 1, 2020, and Kirkpatrick filed a Motion to Reconsider on July 10th. The court denied the motion, and Kirkpatrick filed a notice of appeal on July 14th.
A NOTICE OF APPEAL DUE DURING THE PANDEMIC COURT HOLIDAYS MUST BE FILED ON THE FIRST COURT DAY AFTER THE END OF THE HOLIDAY PERIOD
In order to timely appeal an order, the party must serve and file a notice of appeal in superior court on or before 60 days after service of notice of the order they wish to appeal. If the notice of appeal is filed late, the appeal must be dismissed. The 60-day deadline began to run separately from each of the three notices Rowan served in February and March. Normally, Kirkpatrick’s deadline to appeal would have been April 27th and May 5th. However, the superior court was closed on both days, and the days were deemed holidays. Per CCP §12, if the last day to perform an act within a specified period lands on a holiday, that period is extended to the next day that is not a holiday. Therefore, Kirkpatrick’s deadlines were extended to June 1st, the day the superior court reopened, and June 4th. The motion for reconsideration did not extend the time to appeal because it was procedurally defective and not valid. Therefore, Kirkpatrick’s July 14th notice of appeal was untimely, and her appeal must be dismissed. However, the Court of Appeal concluded by noting the difficulties caused by the pandemic and implied that it might rule more favorably under circumstances where filings were untimely through no fault of the filer.
COA 1st Dist., Div. 3. Filed 9/4/20. 54 Cal.App.5th 289. Opinion by Acting Presiding Justice Fujisaki.
SANCHEZ v. MARTINEZ
BOTH PARTIES APPEALED THE TRIAL COURT’S CALCULATION OF DAMAGES AND PENALTIES FOR REST PERIOD VIOLATIONS
Plaintiff Sanchez and four other farm laborers sued their former employer Defendant Miguel Martinez for various Labor Code violations. After a previous appeal, the plaintiffs were left with only their rest period claims. The Court of Appeal held that Martinez was obligated to pay the plaintiffs for time spent working during rest periods, and it appeared that Martinez had not done so. The Court of Appeal remanded to allow the trial court to calculate the resulting damages and penalties. The trial court awarded $416 in damages and $17,775 in penalties, and both parties disagreed with the trial court’s calculation. The plaintiffs appealed and Martinez cross-appealed.
PLAINTIFFS ASSERTING REST PERIOD VIOLATIONS MAY NOT RECEIVE BOTH THEIR ACTUAL DAMAGES AND A PENALTY HOUR OF PAY
Rest periods are considered hours worked, so employees must be paid at least minimum wage for rest periods, even if the employees are paid on a piece rate basis. Labor Code §226.7 claims may be based solely on nonpayment of wages for rest periods. The Court of Appeal rejected the plaintiffs’ argument that they should receive their regular pay for working during a rest period and an hour of pay as a penalty for the rest period violation. The Court held that this would be an impermissible double recovery of damages and that the plaintiffs could recover either the actual damages for the unpaid time worked or the hour of pay as penalty, but not both. The plaintiffs were free to choose which they preferred to recover.
COA 3rd Dist. Filed 9/11/20. 54 Cal.App.5th 535. Opinion by Acting Presiding Justice Blease.
STARKS v. VORTEX INDUSTRIES, INC.
PLAINTIFFS STARKS AND HERRERA ALLEGED WAGE AND HOUR CLAIMS
Defendant Vortex Industries installs commercial and residential doors. It employed Plaintiff Starks as a technician. In August 2015, Starks, after receiving no response from the Labor & Workforce Development Administration (“L&WDA”) filed a PAGA claim alleging various violations of the Labor Code.
Meanwhile, Plaintiff Herrera filed his PAGA claim on December 16, 2016, almost a year and a half later. His allegations were substantially similar to Starks’.
The cases were subsequently related on a motion from Defendant Vortex.
PLAINTIFF STARKS SETTLED HIS MATTER
Plaintiff Starks took his case to trial, winning a bench determination in Phase I that he was an “aggrieved employee” for purposes of PAGA. The parties then told the court that they were engaged in settlement discussions, and that any such settlement had implications for Plaintiff Herrera as a non-party aggrieved employee. At that point, Plaintiff Herrera had only engaged in some initial discovery, and made no motion to consolidate.
Starks subsequently settled the matter with Vortex, and the trial court approved the settlement after the L&WDA did not object to it.
PLAINTIFF HERRERA MOVED TO VACATE THE JUDGMENT
Almost a month later, in November 2017, Plaintiff Herrera moved to vacate the judgment. A few days later, he moved to intervene in the Starks action. The court denied both motions, and later granted summary judgment against Herrera and in favor of Vortex on the ground that the Starks’ judgment was preclusive against him.
THE INTERVENTION WAS UNTIMELY
The appellate court affirmed. It held first that, using a “totality of the circumstances” test, Herrera’s motion to intervene was untimely. It was filed three weeks after judgment was entered, which, while not dispositive, is heavily weighted. Moreover, there was no explanation for Herrera not moving to consolidate the cases (despite the court’s invitation to do so), even though he knew or should have known that the settlement would have preclusive effect on him.
IT WAS NOT AN ABUSE OF DISCRETION TO REFUSE TO VACATE THE JUDGMENT
Once the L&WDA failed to object to the settlement and cashed the check sent to it by Starks, it lost its ability to attack or appeal the judgment. Once that happened, Herrera, as the agent of the L&WDA, also lost his ability to do so. For the same reason, summary judgment was proper: as the L&WDA had accepted the money from Starks’ claim, the judgment had preclusive effect against Herrera (as did Herrera’s cashing of the check mailed to him as part of the Starks judgment).
CONCLUSION
PAGA judgments are preclusive against other, similar PAGA claims, when the L&WDA does not object and accepts the benefit of the result.
COA 3rd Dist. Filed 9/11/20. 54 Cal.App.5th 535. Opinion by Acting Presiding Justice Blease.
Ninth Circuit
FRLEKIN v. APPLE, INC.
DEFENDANT APPLE REQUIRED EMPLOYEES TO CLOCK OUT AND THEN SUBMIT TO MANDATORY SEARCHES THAT TOOK UP TO 45 MINUTES
Plaintiffs Amanda Frlekin and others brought a wage and hour class action against Defendant Apple, Inc. Apple required employees to undergo searches upon exiting but did not pay employees for this time, as employees were required to clock out before being searched. Employees estimated the time spent waiting for and undergoing the search at 5-20 minutes per incident. Some employees reported waiting up to 45 minutes. The district court certified a class of all non-exempt Apple California employees subject to the bag search policy between July 25, 2009 and the present. The parties both moved for summary judgment on liability. The district court granted Apple’s MSJ and denied Frlekin’s, finding the waiting and search time not compensable. Frlekin appealed, and the Ninth Circuit reversed.
TIME SPENT WAITING FOR AND UNDERGOING REQUIRED SEARCHES MUST BE COMPENSATED
In 2017, the California Supreme Court answered the following question for the Ninth Circuit: “Is time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work purely for personal convenience by employees compensable as ‘hours worked’ within the meaning of Wage Order 7?” The California Supreme Court responded “yes.” In answering the question, the California Supreme Court held that Apple’s employees were subject to Apple’s control while waiting for and during the exit searches, requiring that Apple compensate the employees for that time, because “Apple’s exit searches are required as a practical matter, occur at the workplace, involve a significant degree of control, are imposed primarily for Apple’s benefit, and are enforced through threat of discipline.” Based on the California Supreme Court’s holding and the lack of disputed material facts, summary judgment for Apple was in error, and the plaintiffs were entitled to summary judgment regarding the issue of whether time spent waiting for and undergoing searches was compensable as hours worked.
CELA Involvement: Congratulations to Kimberly Kralowec of Kralowec Law, P.C. and thanks to Michael Singer of Cohelan Khoury & Singer for his Amicus brief on CELA’s behalf.
Ninth Circuit. Filed 9/2/20. 973 F.3d 947. Opinion by Judge Marshall.
RITTMANN v. AMAZON.COM, INC.
PLAINTIFF DELIVERED PACKAGES FOR AMAZON
Plaintiff/Appellant signed up for Amazon.com’s Amflex system. As part of that agreement, Plaintiff/Appellant delivered packages from Amazon’s warehouses to their final destination. Those packages usually crossed state lines. Sometimes Plaintiff/Appellant crossed state lines in the course of his work, but most often he did not.
THE TRIAL COURT DENIED THE PETITION TO COMPEL ARBITRATION ON PLAINTIFF’S CLAIMS
Plaintiff was joined as a named plaintiff in a class action, alleging wage and hour violations, as well as claims that Amflex workers were misclassified as independent contractors.
The trial court denied Amazon’s motion to compel arbitration.
THE FAA EXEMPTION FOR TRANSPORTATION WORKERS DOES NOT REQUIRE THAT THE WORKERS THEMSELVES CROSS STATE LINES
The Ninth Circuit upheld the district court. The arbitration agreement state that the Federal Arbitration Act applied to the arbitration agreement. The court therefore examined §1 of the FAA, which provides an exemption for transportation workers “engaged in interstate or foreign commerce.”
The court determined that the definition of “interstate commerce” did not require that the workers themselves cross state lines. Rather, if they were involved in the stream of commerce that included interstate travel, then they would be exempted under §1.
In its analysis, the court looked at the US Supreme Court’s Circuit City Stores, Inc., v. Adams case. That case decided that §1 of the FAA was to be narrowly interpreted to exempt only transportation workers, and not workers in general, who are involved in interstate commerce.
The court then examined other circuits to have considered the same issue. Those courts were unanimous in determining that workers whose jobs involved the flow of interstate commerce, in particular those who made the last delivery to the final destination, were themselves subject to the §1 exemption of the FAA.
AMAZON’S TERMS OF SERVICE MADE THE ARBITRATION AGREEMENT UNENFORCEABLE
Having decided that the FAA did not apply, the court then looked to the arbitration agreement to find out which law did apply. The agreement was part of Amazon’s Terms of Service, which stated that Washington law applied except for the arbitration agreement.
Because neither federal nor Washington state law applied, the court found that the agreement was ambiguous about which body of law did apply. Because it was ambiguous, there was no enforceable contract because there was no agreement.
CONCLUSION
Workers need not cross state lines themselves for the exemption of FAA’s §1 to apply. They need only be part of the overall flow of the interstate transportation of goods or people.
Ninth Circuit, Filed 8/19/20; Opinion by Judge Smith.