Nelsen v. Legacy Partners Residential, Inc. - Court of Appeal Not Persuaded by D.R. Horton - Arbitration Agreements Precluding Class Arbitration O.K.

[author: Noemi Blasutta]

Breaking with the National Labor Relations Board’s ruling that arbitration agreements containing class waivers can violate federal labor law, the California Court of Appeal recently held that an arbitration agreement precluding class arbitration was not unconscionable, nor would enforcing it violate California state law, federal law or public policy.

After Plaintiff Lorena Nelsen filed a putative class action against her former employer, Legacy Partners Residential, Inc. (“LPR”), alleging various violations of the California Labor Code, LPR moved to compel Nelsen to submit her individual claims to arbitration based on an arbitration agreement Nelsen signed when she joined LPR. Nelsen appealed the trial court’s decision granting LPR’s motion. The Court of Appeal affirmed the trial court’s decision.

The Court cited a number of reasons for its decision not to follow the NLRB’s decision in D.R. Horton, Inc. (discussed here) including the fact that the Court, not bound by the decisions of lower federal courts on questions of federal law, is similarly not bound by federal administrative interpretations. Nor did the Court find Horton particularly persuasive. The Court noted that the Horton decision was subscribed to by only two NLRB Board members and the subject matter of the decision fell well outside the Board’s core expertise. The Court also noted that the NLRB’s decision in Horton reflected a novel interpretation of the law and cited no prior legislative expression, or judicial or administrative precedent. What’s more, at least two federal district court cases had rejected the reasoning set forth in Horton since its publication.

Even if the Court had found Horton persuasive, the Court found that the decision would have been inapplicable because Nelsen, who held a managerial position, would not be covered by the National Labor Relations Act.

Read the Court’s full opinion here.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Proskauer - California Employment Law | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×