Arbitration, Equitable Estoppel, Agents: Hourly Employee Hired Out By Temporary Staffing Company Is Compelled To Arbitrate With Company To Which He Is Assigned -- Though That Company Is A Non-Signatory To Arbitration Agreement

Equitable Estoppel And Agency Theories Required The Employee To Arbitrate With The Non-Signatory Company.

            I suspect that that the facts in our next case are far from unique.  In Garcia v. Pexco, LLC, G052872 (4/3  4/24/17) (Ikola, Aronson, Thompson) (unpublished), plaintiff Garcia was hired by Real Time, a temporary staffing company, and assigned to work for Pexco, LLC.  Garcia brought employment claims against Real Time and Pexco, alleging they were joint employees, agents of one another, and both responsible for the same wrongs.  While Garcia had a broad arbitration agreement covering the claims with Real Time, he had no arbitration agreement at all with Pexco.  

            Of course, defendants moved to compel, and there was no question but that Real Time could require arbitration.  The issue in the appeal was whether Pexco, the sole respondent, could compel arbitration.  Yes, the Court of Appeal concluded.  Garcia was equitably estopped from avoiding arbitration with Pexco, because he had alleged that Pexco and Real Time were joint employers, agents of one another, and had committed the same wrongs.

            COMMENT:  There are two interesting aspects to the case.  The first is that the Court must distinguish between pleadings that result in equitable estoppel, and pleadings that do not result in equitable estoppel.  The murky distinction that the Court appears to be making is that pleadings that are "mere boilerplate" will not necessarily result in equitable estoppel and admissions (especially if denied?), but that pleadings that are "not merely boilerplate language" and are actually integral to the claims will lead to equitable estoppel.

            The second interesting aspect is that, while the Court relies on existing case law to apply established rules of equitable estoppel and agency in order to require arbitration, the Court does not rely on any cases involving temporary staffing agencies that assign employees to other companies -- probably an increasingly common occurrence in our "gig economy" characterized by a lack of permanent employment.   Alas, the case is unpublished as of this date.