On May 5, 2026, the California Court of Appeal, First Appellate District, affirmed the denial of an employer’s motion to compel arbitration in a wage-and-hour class action brought by a former employee. The employer sought to enforce an arbitration agreement that the former employee had signed with a temporary staffing agency that had previously placed him.

• The California Court of Appeal, First Appellate District, affirmed the holding that an employer could not enforce an arbitration agreement since it was neither a signatory to the contract nor an “affiliate” of the staffing agency.
• The court further held that even if the employer was a third-party beneficiary of the arbitration agreement, the agreement did not cover claims arising after the employment with the staffing agency ended.
• The court further held that equitable estoppel did not apply because the claims were not intertwined with the agreement.

In Toothman v. Redwood Toxicology Laboratory, Inc., the First Appellate District held that an employer could not enforce the arbitration agreement because it was not a party to the contract. The court further held that the agreement did not otherwise cover the former employee’s claims based on agency or third-party beneficiary theories.

Employee Signs Arbitration Agreement With Staffing Agency

The former employee, Robert Toothman, signed the arbitration agreement with Apex Life Sciences, LLC, before being placed with the employer in 2018. Months later, his employment...

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