Los Angeles Employment Lawyer: CA Employee Beats Arbitration Requirement!

04/23/2012 // Los Angeles, CA, USA // Keller Grover LLP // Los Angeles employment lawyer Eric Grover

Los Angeles, CA (Los Angeles Employment Lawyer News) — All arbitration agreements are not ironclad, as American Management Services (AMS) learned about their employment contract and Issue Resolution Agreement. A California appeals court has reversed a trial court’s ruling that found a former employee’s complaint should have gone to arbitration—not the court system, reports California employment lawyer Eric Grover of Keller Grover LLP.

Brandon Grey applied for a position at AMS, a residential and commercial property management company, in June 2006. Upon applying for the position, Grey was issued an application packet that contained documents that he was required to sign—just like any other prospective employee who wanted their application reviewed by AMS.

In the application packet Grey was given an Issue Resolution Agreement (IRA), which maintained that an applicant agrees to “settle any and all previously unasserted claims, disputes, or controversies arising out of or relation to [the] application or candidacy for employment, and/or cessation of employment with [AMS] exclusively by final and binding arbitration before a neutral Arbitrator,” court documents stated. The IRA also included resolution rules that described the arbitration process. Grey signed this agreement.

AMS offered Grey the position on July 3, at which time they required him to sign an employment contract with AMS. Under this employment contract—that Grey signed—it detailed in its “Remedies” section “a dispute arising out of the alleged breach of any other provision of this Agreement…shall be submitted to final and binding arbitration. The contract also stated, “This Agreement is the entire agreement between the parties in connection with employee’s employment with [AMS], and supersedes all prior and contemporaneous discussions and understandings… Employee acknowledges that this Agreement is supplemented by such general employment policies and procedures as [AMS] may implement from time to time. Employee agrees that it is his sole responsibility to remain informed about all applicable general employment policies and guidelines of [AMS] that may be contained in the Employee Handbook or posted on [AMS’s] Intranet site,” according to court documents.

Grey was later fired from AMS and subsequently filed a lawsuit against AMS and its executive on April 30, 2009 in the superior court. Grey maintains that the executive, Scott Mencaccy, harassed him and later fired him because of his sexual orientation.

Grey charged the defendants with employment discrimination, harassment, and retaliation on the basis of sexual orientation; failure to pay wages; intentional infliction of emotional distress; defamation and compelled self-defamation, and wrongful termination of employment in violation of public policy.

AMS and Mencaccy pressed the trial court to force Grey into arbitration under the employment contract and IRA. The court sided with AMS and ordered Grey to arbitrate his claims.

The arbitrator subsequently ruled in favor of AMS and awarded AMS its costs, states Grover, a California employment attorney.

When Grey moved to vacate the award, the trial court disagreed and confirmed the award. Grey then filed an appeal.

The appeals court found that the employment contract superseded the IRA, due to its integration clause, which stated in part: “This Agreement is the entire agreement between the parties in connection with Employee’s employment with [AMS], and supersedes all prior and contemporaneous discussions and understandings.”

The court determined that the employment contract “is the final expression of the parties’ agreement with respect to Grey’s employment and it supersedes the IRA.”

The appeals court ultimately ruled that Grey was not required to submit his claims to arbitration under the terms of his employment contract, finding that the arbitration clause was too narrow in scope to require arbitration. The clause stipulated that only breaches of the contract were required to be arbitrated and virtually all of Grey’s claims in his suit were for statutory-based violations of employment laws. The arbitration award was vacated and the judgment was reversed and remanded for further proceedings in the trial court.

“After a series of recent Supreme Court rulings favoring big business and forced arbitration on consumers, it is at least a small relief to see an employee allegedly fired for all the wrong reasons prevail in preventing his claims from forced arbitration,” explains Grover, a California employment lawyer. “If the Arbitration Fairness Act—S.987—that was introduced last year were passed, it would amend the Federal Arbitration Act to invalidate all arbitration clauses in consumer and employment contracts and level the playing field.”

This news was brought to you by the Los Angeles employment lawyers at Keller Grover LLP.

Keller Grover is an experienced employment law firm that has played leading roles in a wide variety of employment related claims, including wage and hour, breach of contract cases and discrimination and harassment cases based on race, sex, age, disability and other legally protected categories. Keller Grover LLP is dedicated to helping workers whose wage and hour rights have been violated. For more information about the Los Angeles employment lawyer at Keller Grover and employment law cases, please visit www.kellergover.com.

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