Whether An Arbitration Agreement Exists Was A Gateway Issue For The Court To Decide.
Agreeing with the trial court that there was no agreement express or implied to arbitrate, the Court of Appeal affirms the trial court's order denying employer's motion to compel arbitration in a putative class action wage and hours case brought by a trucker. Mendoza v. Trans Valley Transport et al., H044372 (6th Dist. 3/1/22) (Greenwood, Elia, Grover). This is a 55-page opinion and I will be brief.
First, the opinion addressed choice of law: did the California Arbitration Act or the Federal Arbitration Act apply? Answer: the CAA applied, because of the carve-out in the FAA for "workers engaged in foreign or interstate commerce," meaning transportation workers. And Mr. Mendoza fell into the carve-out category because he was a trucker. Therefore, the CAA applied.
Second, the Court of Appeal refused to enforce a delegation clause delegating the issue of contract formation to an arbitrator. It found the issue to have been forfeited because it was only raised in reply papers. Nevertheless, addressing the merits, the Court concluded that not all gateway issues are delegable, and the issue of whether an agreement to arbitrate existed was one for the courts to decide.
Third, the Court agreed that the parties had not agreed to arbitrate. The problem was that, while the employee acknowledged receipt of a handbook and 14 other items, and acknowledged that any questions he had were answered, nothing in the mass of documents pointed him to an arbitration clause, and there was no signature line for the arbitration policy that could have been found in the handbook. Nor would the Court conclude that there was an "implied in fact" contract, simply because the employee received the handbook and continued to work for the company, because nothing drew the employee's attention to the arbitration policy.
COMMENT: Employers who want to make an arbitration agreement "stick" should include signature lines, and make it clear and unmistakable in writing to the employee that the employee is agreeing to arbitrate. We note that Mendoza was Spanish speaking and did not read or write English. The employer's director of human resources testified that his custom and practice was to explain the written material to employees and that a Spanish translation was provided, which, however, Mendoza did not recall. For employees who may not be fluent in English, it is preferable to have clear and unmistakable evidence that they have received a written translation.
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