Tuesday, October 23, 2012

More limits on arbitration provisions

I've written about the problems employers face enforcing arbitration agreements before, and here is a new spin on the issue.  In Elijahjuan v. Superior Court (2012) --- Cal.Rptr.3d ----, the Second District Court of Appeal, Division 8 (Los Angeles) ruled that a lawsuit brought by a group of employees challenging their status as independent contractors  fell outside the scope of an arbitration agreement that specified that the individuals were independent contractors.  

Why? According to the Court of Appeal, because the lawsuit did not concern the application or interpretation of the Agreement, but instead sought to enforce rights arising under the Labor Code, it was "outside" the agreement. The Labor Code would not apply to independent contractors and did not cover any of the rights and responsibilities set forth in the agreement.

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