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Posts Tagged ‘Labor Code’

Second District Reverses Arbitration Order in Wage & Hour Case, Citing Lack of Bilaterality

In Arbitration, Class-wide Arbitration, Concepcion on March 20, 2013 at 5:48 pm
BgKahuna squeezes his way inside. Abandoned an...

BgKahuna squeezes his way inside. Abandoned and decaying Ambassador Apartments in Gary, Indiana (Photo credit: slworking2)

Yesterday, the California Court of Appeal for the Second District reversed the lower court’s order granting a petition to compel arbitration.  Compton v. Superior Court of Los Angeles County, No. B236669, — Cal.Rptr.3d —-, 2013 WL 1120619 (2d Dist. Mar 19, 2013).  Plaintiff was a property manager who filed a putative wage & hour class action complaint in Los Angeles Superior Court.  She was required to sign an arbitration agreement that also barred arbitration of class claims.  The trial court granted defendants’ petition to compel arbitration.

Normally an order compelling arbitration is not appealable.  But the Court of Appeal determined it had jurisdiction, citing the “death knell” doctrine:

An order compelling arbitration is not appealable. (Elijahjuan v. Superior Court (2012) 210 Cal.App.4th 15, 19.) The parties argue over whether this matter is appealable under the “death knell” doctrine, which applies when an order effectively terminates a class action. Rather than parse the case law on that issue, we conclude that we have jurisdiction to treat this nonappealable order as a petition for writ of mandate in this unusual case because: (1) the unconscionability issue is one of law based on undisputed facts and has been fully briefed; (2) the record is sufficient to consider the issue and it appears that the trial court would be only a nominal party; (3) if we were to dismiss the appeal, and the ultimate reversal of the order is inevitable, it would come in a post-arbitration award after the substantial time and expense of arbitrating the dispute; and (4) as a result, dismissing the appeal would require the parties to arbitrate nonarbitrable claims and would be costly and dilatory.

The Court concluded that the arbitration agreement was unconscionably one-sided because (1) it exempted from arbitration claims the employer would more likely bring, such as claims for injunctive or equitable relief from trade secret disclosures; (2) it limited the time to demand arbitration to a period shorter than the relevant statutes of limitation; (3) it retained the statute of limitations period for itself  and (4) it suggested that the arbitrator had the discretion not to award mandatory attorney’s fees under the Labor Code.

The Court determined that it was not violating Concepcion by enforcing Armendariz’s bilaterality rule.

Concepcion did not discuss the modicum of bilaterality standard adopted by Armendariz, which is not a class action case. And Concepcion did not overrule Armendariz. We both agree with and are therefore bound to follow our Supreme Court and apply Armendariz to this case. (Truly Nolen of America v. Superior Court, supra, 208 Cal.App.4th at p. 507.) Accordingly, we conclude that Concepcion does not apply to invalidate Armendariz’s modicum of bilaterality rule, at least in this context.

Justices and Judge

Justice Laurence D. Rubin wrote the opinion for the Court, with Justice Madeleine I. Flier concurring.  Presiding Justice  Tricia A. Bigelow dissented.  Judge Michael Johnson, Los Angeles Superior Court.

Attorneys

R. Rex Parris Law Firm, R. Rex Parris, Alexander R. Wheeler, Kitty Szeto and John M. Bickford; Lawyers for Justice and Edwin Aiwazian, for Petitioner.

Jackson Lewis, Thomas G. Mackey and Brian D. Fahy for Real Parties in Interest.

By CHARLES H. JUNG

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Unclean Hands Bars Suit Between Construction Contractors Where Subcontractor Failed to Pay Labor Code Prevailing Wages

In Affirmative Defenses, Unclean Hands on September 12, 2010 at 1:14 pm
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Plaintiff construction subcontractor appealed from a trial court ruling that its suit against the construction contractor was barred by the doctrine of unclean hands.  B & K Custom Cabinets, Inc. v. B.K. Ball, Inc., No. C060766, 2010 WL 3508321 (Cal. Ct. App. 3d Dist. Sept. 9, 2010).  The subcontractor B & K sued contractor Ball seeking to enforce a stop notice and asserting causes of action for breach of contract and violation of the prompt payment laws, all designed to recover $155,534 allegedly due under the subcontract. Id. *6.  Ball claimed it owed no more than $87,987, but because it had knowledge of B & K’s prevailing wage violation, Ball could not pay even that amount without exposing itself to liability under Labor Code section 1775 unless B & K provided “an affidavit signed under penalty of perjury” attesting that B & K employees had been paid the prevailing wages.” Id. (citing Lab. Code § 1775(b)). Read the rest of this entry »

Labor Code Section 512 Does Not Apply to Public Employees

In Meal and Rest Breaks on August 23, 2010 at 6:29 am
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The First District Court of Appeal held that Labor Code section 512 and IWC Wage Order No. 17 do not apply to public employees.  California Correctional Peace Officer’s Association, et al. v. State of California, No. A125679, 2010 WL 3248794 (Cal. Ct. App. 1st Dist. Aug. 18, 2010).  The California Correctional Peace Officers’ Association (CCPOA) filed a class action, contending that the State of California violated various Labor Code provisions, as well as wage orders promulgated by the Industrial Welfare Commission (IWC), by failing to provide correctional officers with meal periods and by failing to pay for the missed wage periods. CCPOA argued that the Legislature intended that the State provide its correctional officers with meal periods as required by Labor Code section 512 and IWC Wage Order No. 17, and that the State must pay for missed meal periods as required by Labor Code section 226.7.  The court rejected this argument, holding that “the subject wage and hour statutes do not apply to public employees.”  Id. *1. Read the rest of this entry »