Court Can Reconsider Arbitration Order

Pinela v. Nieman Marcus Grp., Inc., No A137520 (D1d4 Jun. 29, 2015).

This is a long and complicated decision addressing the enforceability of Nieman Marcus employee’s arbitration agreement. A bunch of overlapping choice of law and enforceability issues are at issue. But it basically all boils down to the fact that the agreement’s election of Texas law to govern the merits of any dispute arising from the employment relationship (not just contract disputes) made it unconscionable. The election would deprive plaintiff of her unwaivable statutory wage and hour claims under California law. You can’t do that in California.

In getting there, the court makes an interesting point: the line of cases addressing the limited “vestigial” jurisdiction that trial courts retain after compelling arbitration does not apply to the court’s sua sponte power to reconsider the arbitration ruling itself. Here, the court initially compelled most of the case to arbitration, but following developments in the case law—including a published court of appeal case interpreting the exact same agreement—changed its mind. There’s nothing wrong with that.

Affirmed.