Make your arbitration terms ‘clear and unmistakable’

If you think you understand the many technical and evolving rules of arbitration in California, think again. In a recent case, a sophisticated employer thought it could rely upon arbitration provider rules—and prior California court decisions—to simplify the scope and jurisdiction of an arbitration. The court decided it was wrong in at least three areas.

Who decides the scope of arbitrability?

Carlos Villalobos was employed by Simplified Labor Staffing Solutions, Inc., a temporary staffing services company that supplies labor and staffing to its customers. Simplified Staffing placed him with Maersk Warehouse and Distribution Services, where he worked first as a materials handler and later as a forklift operator. Maersk is a warehousing and logistics company that warehouses goods in California that originate outside the state and processes logistics for customers all over the United States.

On June 30, 2022, Villalobos filed a class action alleging multiple wage and hour claims under the labor code and an unfair competition claim against Maersk. He also filed a separate representative action against Maersk for civil penalties under the Private Attorneys General Act (PAGA) on behalf of himself and other current and former employees. The two cases were later consolidated.