Court rules in favour of employees and that arbitration agreement was invalid
An employer has lost an appeal in the California Court of Appeal for the Second District after it was ruled that two employees did not sign an arbitration agreement and terms regarding a third employee were substantively unconscionable (primarily one-sided in the employer’s favour).
Juan Navas, Martha Herrera Lopez, and Benjamin Hernandez Ramos – the plaintiffs in the case of Navas et al. v. Fresh Venture Foods, LLC – and other employees filed a class action lawsuit against the defendant, Fresh Venture Foods, LLC.
The plaintiffs alleged that the company failed to pay minimum and overtime wages. They also brought a claim under the Private Attorneys General Act of 2004 (PAGA) for civil penalties or damages for labor law violations on behalf of themselves and other employees.
The company brought a motion to compel arbitration. It claimed that the three plaintiffs signed arbitration agreements consenting to arbitrate their individual claims against the employer and giving up the right to represent others in litigation or to participate in class actions.
The trial court ruled in the plaintiffs’ favor. It found that the company failed to prove that Lopez and Ramos entered into arbitration agreements and that the agreement that Navas signed was procedurally and substantively unconscionable.
The employer appealed. The California Court of Appeal for the Second District agreed with the trial court’s...
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