The question of arbitrability of class claims is a contract interpretation matter for the arbitrator based upon the agreement itself and state law contract principles. Sandquist v. Lebo Automotive, Inc. In reaching the decision, the California Supreme Court also relied on case law interpreting the Federal Arbitration Act and the U.S. Supreme Court's ruling in Green Tree Financial Corp. v. Bazzle. The California decision highlights the need for lawyers to carefully draft arbitration clauses that clearly explain who decides procedural issues and whether the claims are subject to arbitration, observes certain leaders of the ABA Section of Litigation.
Agreement Should Answer Procedural Question
The plaintiff-employee sued his employer for racial discrimination, harassment, and retaliation claims for a class of current and former employees of color. The trial court granted the employer's motion to compel individual arbitration based on the three arbitration agreements employee signed on his first day of employment.