An appellate court in California denied Universal Protection Service, LP (“Universal”) and their affiliate’s mandamus petition, seeking to overturn a lower court ruling compelling arbitration. The court found that whether an arbitration agreement permitted class-wide arbitration is a question for an arbitrator, and not the court.
Plaintiffs, a group of security officers formerly in the employ of Universal, sought arbitration following their employment termination—allegedly—after filing an administrative complaint. The issue before the court centered on whether an arbitration agreement within plaintiff’s employment contract gave an arbitrator the power to determine whether an arbitration agreement allowed for class action arbitration. The court looked to whether there was “clear and unmistakable evidence” that Universal and the plaintiffs planned for an arbitrator to handle such disputes.
Universal argued that because the arbitration agreement did not reference class actions specifically, this was concrete evidence that the parties did not intend the question of class action arbitration to be within the purview of an arbitrator. The court disagreed, finding that mere silence within an arbitration agreement is not sufficient. Instead, the court noted that the parties incorporated the American Arbitration Association’s (“AAA”) rules pertaining to employment disputes including the AAA’s Supplementary Rules for Class Arbitrations. Despite noting that some federal cases have rejected similar conclusions, the court held that because the parties intentionally made the AAA apart of their employment contract, this inclusion authorizes an arbitrator to decide whether the arbitration agreement permits class actions.
Universal Prot. Serv., LP v. Superior Ct. of Yolo Cnty., No. C078557 (Cal. Ct. App. Aug. 18, 2015)
This post written by Matthew Burrows, a law clerk at Carlton Fields in Washington, DC.
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