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CDF Prevents Employee From Pursuing Class Claims For Unpaid Wages
Aug 17, 2021

CDF Prevents Employee From Pursuing Class Claims For Unpaid Wages

Topics: Arbitration Agreements, Class Actions, Court Decisions, Wage & Hour Issues

This week CDF secured a victory for a California Employer when the California Court of Appeal held that the employer’s general California choice-of-law provision in its employment agreement did not entitle the employee to pursue class claims for unpaid wages.  

In Nixon v. AmeriHome Mortgage Company, LLC, the employment agreement at issue required the employee to arbitrate any employment-related claims on an individual basis and to waive class claims.  The employment agreement also included a choice-of-law provision that incorporated state law.  Plaintiff relied on that provision to argue that state law governed, not federal, and as such, she should be permitted to pursue class claims for alleged unpaid wages pursuant to Labor Code Section 229 despite the class waiver she executed.  Section 229 allows a party to maintain an action for unpaid wages despite the existence of an agreement to arbitrate unless the arbitration agreement is governed by federal law.  Here, plaintiff argued that the choice-of-law provision at issue was so general and broad that it incorporated California law making plaintiff’s class claim for unpaid wages exempt from arbitration.

In a published decision, the Court of Appeal disagreed with the plaintiff and affirmed the trial court’s order requiring plaintiff to arbitrate her individual claims and dismissing class claims.  The Court of Appeal reasoned that “interpreting a general California choice-of-law provision in an agreement as evidencing the parties’ intent to apply section 229 to an arbitration provision covering all employment claims, including those relating to wages, departs from common sense and makes mischief.”  

This case provides employers with guidance on how to avoid claims that are exempt from arbitration and the language that should be incorporated into an arbitration agreement for adequate protection against class claims.

Defendants were represented by CDF Labor Law LLP attorneys Todd R. Wulffson and Niki Lubrano.

About CDF

For over 25 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor in Chief

Sacramento Office Managing Partner and Chair of CDF’s Traditional Labor Law Practice Group. Mark has been practicing labor and employment law in California for thirty years. His practice has a special emphasis on the representation of California employers in union-management relations and handling federal and state court litigation and administrative matters triggered by all types of employment-related disputes. He is also adept at providing creative and practical legal advice to help minimize the risks inherent in employing workers in California. He recently named “Sacramento Lawyer of the Year” in Employment Law-Management for 2021 by Best Lawyers®.
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