Ordinarily, a decision by an arbitrator is not subject to being reversed by a court based on a legal error by the arbitrator. Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 1, 25. In other words, unlike a decision by a court, a decision by an arbitrator generally cannot be "appealed."
In an April 26, 2010 decision signaling continued judicial antagonism to arbitration of employment claims, the California Supreme Court held in Pearson Dental Supplies, Inc. v. Superior Court that an arbitration decision in favor of an employer is subject to judicial review and to being vacated by a court if a legal error by the arbitrator would deprive a plaintiff employee of a hearing on the merits of a claim for alleged violation of the Fair Employment and Housing Act or, tellingly, a claim based on "other unwaivable statutory rights."
Luis Turcios was employed by Pearson Dental Supplies, Inc., as a janitor. After Pearson Dental Supplies terminated his employment, Turcios submitted to the Department of Employment and Housing ("DFEH") a complaint alleging Pearson Dental Supplies violated the Fair Employment and Housing Act ("FEHA") by discriminating against him based on his age and related claims. After receiving from the DFEH a "right-to-sue" notice, Turcios filed suit against Pearson Dental Supplies.
Approximately five months after Turcios filed suit, Pearson Dental Supplies filed a motion to compel Turcios to arbitrate his claims based on an arbitration agreement Pearson Dental required Turcios to sign as a condition of employment. The trial court granted that motion, and the parties selected an arbitrator.
The arbitrator decided in favor of Pearson Dental Supplies, finding that Turcios' claims were time-barred by a provision of the arbitration agreement requiring Turcios to initiate arbitration of any claims arising out of his employment within one year because Turcios did not submit his claims to arbitration within one year of the date Pearson Dental Supplies terminated his employment.
Turcios then challenged the arbitrator's decision in the trial court. The trial court agreed with Turcios that the arbitrator made a legal error when the arbitrator decided that Turcios' claims were time-barred and vacated the arbitrator's decision.
Pearson Dental then sought appellate review of the trial court's decision vacating the arbitrator's decision. The Court of Appeal agreed Turcios' claims were in fact not time-barred, but the Court of Appeal agreed with Pearson Dental Supplies that the arbitrator's decision was not subject to review based on a legal error by the arbitrator and reversed the trial court's decision to vacate the arbitrator's decision.
Turcios then petitioned the California Supreme Court to review the Court of Appeal's decision. The California Supreme Court agreed with Turcios and with the trial court and held that arbitration decisions based on arbitration agreements entered into as a condition of employment are subject to a greater scope of review than other types of arbitration agreements. The Court held also that a court can vacate an arbitrator's decision if the decision is based on a legal error that effectively bar an employee from having claims for alleged violation of the FEHA or for "other unwaivable statutory rights" decided on the merits. The Court held also that the arbitrator failed to properly apply a provision of the Code of Civil Procedure providing that an arbitration filing deadline is tolled while a related civil action for the same claim(es) is pending.
In one bright spot in the decision, the Court declined to hold that a provision of the arbitration agreement arguably waiving Turcios' right to submit claims to administrative agencies, such as the DFEH, is unconscionable. The Court explained: "[A]s the United States Supreme Court recently recognized [citation], an arbitration agreement could, under federal law, [such as the Federal Arbitration Act,] validly limit the resort of an employee to an administrative agency that acts as an adjudicator, rather than as a prosecutor, of employment claims, such as the Labor Commissioner in this state."
The California Supreme Court's decision in this case is a further development in a long line of cases finding various provisions of arbitration agreements between employers and employees unenforceable or otherwise limiting the usefulness of such agreements to employers. In addition, lower appellate courts frequently address employment arbitration agreements in reported opinions. An employment arbitration agreement previously believed to be enforceable might not withstand judicial scrutiny today or in the future. Employers should therefore consider having such agreements reviewed periodically by experienced counsel.
- Partner
Christopher Andre is a seasoned civil litigator who focuses his practice on civil litigation and advising and representing employers. Mr. Andre is an editor of and frequent contributor to the firm’s Labor and Employment Law ...
Other AALRR Blogs
Recent Posts
- Rotational Employees Can Have Their “On” And “Off” Weeks Counted Against Their FMLA Leave Entitlement
- Ninth Circuit Issues Important Decision on Per Diem Pay
- Ninth Circuit Upholds Victory for Trucking Industry: California Meal and Rest Break Rules Preempted by Federal Law as to Commercial Drivers
- They Say Never Discuss Politics In Polite Company, But How Can Employers Handle Impolitic Off-Duty Conduct?
- DOL Permits Back-of-the-Restaurant Staff to Share in Servers’ Tips
- Can California Employers Be Liable For Failure To Prevent Something That Never Happened?
- Employer’s Delay is Fatal to Enforcement of Arbitration Agreement
- California Employers: The federal Department Of Labor’s Final Rule For Worker Classifications Does Not Eliminate The Requirements Under California’s ABC Test
- Court Holds California Law Applies to Offshore Workers on Oil Platforms
- More Training Required for Human Resource Employees and Managers in California
Popular Categories
- (40)
- (135)
- (42)
- (22)
- (6)
- (6)
- (31)
- (26)
- (22)
- (14)
- (5)
- (6)
- (4)
- (3)
- (3)
- (14)
- (9)
- (2)
- (2)
- (1)
- (3)
- (1)
- (3)
- (1)
- (1)
- (2)
- (1)
- (1)
- (1)
- (1)
- (1)
- (1)
- (1)
Contributors
- Christopher S. Andre
- Cindy Strom Arellano
- Sarkis A. Atoyan
- Alicia A. Belock
- Eddy R. Beltran
- Rex Darrell Berry
- William M. Betley
- Brigham M. Cheney
- Michele L. Collender
- Kevin R. Dale
- Scott K. Dauscher
- Alexandria M. Davidson
- William A. Diedrich
- Alfonso Estrada
- Lauren D. Fierro
- Paul S. Fleck
- Robert Fried
- L. Brent Garrett
- Carol A. Gefis
- Kieran D. Hartley
- Amber S. Healy
- Jonathan Judge
- David Kang
- Nate J. Kowalski
- Joshua N. Lange
- Catherine M. Lee
- Thomas A. Lenz
- David M. Lester
- Martin S. Li
- Mia A. Lomedico
- Jorge J. Luna
- Michael J. Morphew
- Ronald W. Novotny
- Michael J. O'Connor, Jr.
- Aaron V. O'Donnell
- Shawn M. Ogle
- Sharon J. Ormond
- Justin R. Peters
- Chesley D. Quaide
- Todd M. Robbins
- Irma Rodríguez Moisa
- Casandra P. Secord
- Jon M. Setoguchi
- Lauren B. Shelby
- Ann K. Smith
- Amber M. Solano
- Susana P. Solano
- Ethan G. Solove
- Susan M. Steward
- April Szabo
- Jay G. Trinnaman
- Jonathan S. Vick
- Robert L. Wenzel
- Brian M. Wheeler
- Glen A. Williams
- Kimberley A. Worley
- Lisa C. Zaradich
Archives
2021
2020
- December 2020
- October 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- January 2020
2019
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
2018
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- March 2018
- February 2018
- January 2018
2017
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- June 2017
- May 2017
- March 2017
- February 2017
2016
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
2015
- December 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- February 2014
- January 2014
2013
- October 2013
- September 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
2011
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011