Employers must carefully draft arbitration agreements and ensure the agreements are regularly updated for compliance with state and federal law. A California Court of Appeal held that owner-operator truck drivers were not required to arbitrate whether they were misclassified as independent contractors where the parties’ arbitration agreements applied to any dispute that arose “with regard to its application or interpretation.” Elijahjuan v. Superior Court, No. B234794 (Cal. Ct. App. Oct. 17, 2012). The Court found that the misclassification claims fell outside the arbitration provision because it did not concern the application or interpretation of the Agreements; rather, the drivers sought to enforce their rights under the California Labor Code.
The Court’s decision reiterates California’s hostility toward enforcing arbitration agreements and reminds employers that they need to make clear that all claims regarding the parties’ relationship are covered by the arbitration agreement. In light of this ever-changing legal climate, employers should continue to consult with their legal counsel when reviewing the enforceability of arbitration agreements. For a detailed discussion regarding this case, please see our article by clicking here