If You Litigate, You Can't Arbitrate

Fleming Dist. Co. v. Younan, No. A157038 (D1d3 May 15, 2020)

An employment contract contains an arbitration clause. But Employee files a wage claim with the Labor Commissioner. Employer claims that the Labor Commissioner case can’t proceed, given the arbitration clause. But instead of immediately moving to compel arbitration, Employer winds up litigating the wage claim. Employee wins. Then, in connection with a demand for a trial de novo in superior court, Employer finally files an arbitration petition. Too late. Litigating the claim before the Labor Commissioner is not consistent with the right to arbitrate. Employer needed to do more than complain that the case was arbitrable. It needed to take active steps to move the case to arbitration. By filing to do that in a timely fashion, Employer waived the right to compel.

Affirmed.

Don't Call It a Berman

Otto, LLC v. Kho, No. A147564 (D1d1 Aug. 21, 2017)

In Sonic-Calabasas A, Inc. v. Moreno, 57 Cal. 4th 1109 (2013)—aka Sonic II—the California Supreme Court held that an arbitration agreement is unconscionable if it deprives an employee of the procedural advantages provided in the Labor Code wage claim procedures known as Berman hearings. The Berman procedures permit an employee to litigate claims for back wages in an informal administrative proceeding, with limited pleading, no formal rules of evidence, no discovery, fee shifting, and where the hearing officer has the power to assist the parties in cross examinations and to explain concepts and issues that the (often unrepresented) parties do not understand. If the employee is successful, the Labor Commissioner is tasked with enforcing the award and can defend it on appeal.

Within the Jurisdiction . . .

Rebolledo v. Tilly’s, Inc., No. G048625 (D4d3 Aug. 6, 2014)

The court here holds that an arbitration clause’s exclusion of “any matter within the jurisdiction of the California Labor Commissioner” applies to wage claims brought in superior court when they could have been brought before the Labor Commissioner. Those matters are thus within the Commissioner’s concurrent jurisdiction, even if the plaintiff did not elect to bring them in that forum. So the employee can’t be compelled to arbitrate those claims.

Affirmed.