Harris v. Bingham McCutchen LLP California Court of Appeal, Second Appellate District, Case No, B240522, March 29, 2013
The Second Appellate District affirmed the trial court’s determination that (i) a choice of law provision requiring application of Massachusetts state law was enforceable under recent California case law (Peleg v. Neiman Marcus Group, Inc., 204 Cal. App. 4th 1425 (2012)); and (ii) applicable Massachusetts legal authority invalidated an arbitration agreement in an employment contract. Plaintiff Hartwell Harris brought employment discrimination and wrongful termination claims under California state law against a Boston-based law firm, Bingham McCutchen LLP (“Bingham”). Bingham moved for an order compelling arbitration, producing a letter agreement that included a mandatory, pre-dispute arbitration paragraph. Pointing to a Massachusetts choice-of-law provision in the letter agreement,the plaintiff argued that Warfield v. Beth Israel Deaconess Medical Center, Inc., 454 Mass. 390 (Mass. 2009), which requires arbitration agreements affecting statutory claims to be “clear and unmistakable,” disposed of Bingham’s motion and precluded enforcement of the arbitration agreement. Bingham did not contest the validity of the choice-of-law provision, but urged that it applied only to claims arising under Massachusetts anti-discrimination laws. Bingham also argued that AT&T Mobility v. Concepcion, 131 S. Ct. 1740 ( (2011), abrogated Warfield because its “clear and unmistakable” test offended the strong federal pro-arbitration policy embodied in the Federal Arbitration Act.
Affirming the trial court’s order refusing to enforce the arbitration agreement, the Second District rejected both of Bingham’s arguments. Relying on California’s strong policy “favor[ing] enforcement of choice-of-law provisions,” and noting that Peleg, 204 Cal.App.4th at 1467, “[u]pheld application of other states’ internal statutes, rules and laws to arbitration contracts,” the court applied Massachusetts law to resolve the enforceability issue. The Court of Appeal also rejected Bingham’s argument for limiting enforcement of the choice-of-law provision to Massachusetts’ anti-discrimination statutes on the ground that California’s anti-discrimination statutes implicate the same public policies as those the Massachusetts Supreme Court identified in Warfield. Moreover, the appellate court resolved any ambiguity as to the provision’s scope against Bingham’s interest because it drafted the agreement. Finally, the Court of Appeal noted that Warfield had already rejected the argument that Concepcion invalidated its “clear and unmistakable” test for arbitration agreements affecting statutory discrimination claims. United States Supreme Court precedent (14 Penn Plaza v. Pyett, 556 U.S. 247 (2009)) required “[a]greement[s] to arbitrate statutory antidiscrimination claims in a collective bargaining agreement [to be] explicitly stated.” And Concepcion itself recognized that “[s]tates remain free to take steps addressing the concerns that attend contracts of adhesio[n].”
Full Opinion: http://www.courts.ca.gov/opinions/documents/B240522.PDF