Professional Note: The FAA does not apply to all arbitration agreements signed in California, but only to those arising from transactions involving interstate commerce. If the FAA does not apply, the California Arbitration Act (CAA) will decide whether an arbitration agreement is binding. The CAA gives the courts more latitude than the FAA to refuse to enforce an arbitration agreement. The Court of Appeals first noted that the FAA applies to arbitration agreements signed in California if they result from transactions involving interstate commerce. Since the employer operated a multi-state business, the arbitration agreement was governed by the FAA. The contract of employment at issue contained an arbitration clause under the heading `Settlement by arbitration`. It also included a confidentiality clause and an enforceable clause. The arbitration clause and the main secrecy clause have been translated into Spanish, but the confidentiality sub-agreement and the applicability clauses have not been translated. The Court of Appeal refused to enforce the arbitration agreement. Although the court acknowledged that Ramos` explicit confirmation of the reading and understanding of the English contract containing the arbitration clause would normally bind him to its terms, the court argued that the „circumstances of this case are not typical.“ The court ruled that there was „no mutual consent“ to the arbitration „because the arbitration agreement was hidden in the English contract and not included“ in the Spanish translation.
As a result, Westlake`s failure to provide a translation of the arbitration clause of the purchase agreement meant that it could not prove that Ramos had agreed to settle its dispute with Westlake. This case is another example of the importance of fully assessing the wording of an arbitration agreement and understanding who constitutes the employer`s workforce before implementing such an agreement. Employers should be aware that the applicability of an arbitration agreement may depend on whether or not employees understand what they are signing. Employers are advised to provide translations of all of their arbitration agreements to employees who do not speak and/or read English, and not just to certain provisions. The court of first instance concluded that the Federal Arbitration Act (FAA) governed the parties` arbitration agreement and concluded that the inconsistency between the Spanish and English clauses led to an unclear opinion as to whether the parties had agreed to binding or non-binding arbitration. The lower court resolved this ambiguity against the employer in accordance with the contract rule known as the „counter-profess“ doctrine, which provides that an ambiguity in a contract is interpreted against the author of the contract. Since the employer drafted the arbitration agreement, the trial court has asked the parties to settle their dispute on a non-binding basis. If ICC arbitration is chosen as the preferred method of dispute resolution, this should be decided when negotiating separate contracts, contracts or arbitration agreements. However, if both parties agree, this can be resumed even after a dispute. The employer sells bagels nationwide and has retail outlets in California. A Spanish-speaking employee who can only read and write basic English worked in one of the employer`s retail stores. The employee filed a class action lawsuit against the employer for allegedly failing to provide its employees with legal meals and food breaks.
The employer attempted to force arbitration, arguing that the employee had signed an arbitration agreement that required him to resolve disputes arising from his employment relationship through binding arbitration. In Esteban H. Carmona et al.c Lincoln Millennium Car Wash Inc. et al. (case number B248143, State of California, Second Appeal District, Division Eight), current and former employees sued Esteban H. Carmona, Marcial H. Carmona, Pedro Cruz and Yoel Isail Matute Casco Lincoln Millennium Car Wash Inc. and Silver Wash Inc. on their own behalf and on behalf of similar employees for alleged violations of wages and hours.
Their employers tried to force arbitration. The court of first instance ruled that the arbitration agreement at issue in the case was unscrupulous and refused to apply it, finding that the car wash companies had translated only parts of the agreement into Spanish and had not explained it in detail. In a recent case, the California Court of Appeals ordered the parties to initiate binding arbitration. The tribunal noted that other provisions of the Spanish version of the agreement referred to binding arbitration and that any ambiguity should be removed in favour of arbitration. The court ruled that the confidentiality clause in the employment contract was part of the arbitration clause because it required employees to discuss disputes with management before disclosing information about car wash companies to „individuals, companies, companies, media agencies, government agencies or agencies, or other entities“. So before going to lawyers or filing something with a trial court or dispute resolution body like the American Arbitration Association (AAA), employees had to talk to car wash companies. In addition, the enforceable clause of the confidentiality sub-agreement referred to certain disputes between the employee and the employer, as well as to arbitration rights, and was therefore also considered to be part of the arbitration clause […].