Challenging Arbitration Agreements: Key Takeaways from the Quach Ruling and How Guerra & Casillas LLP Can Advocate for You

At Guerra & Casillas LLP, we are committed to protecting our clients’ rights, especially when it comes to challenging arbitration agreements. The California Supreme Court’s decision in Quach v. California Commerce Club, Inc. confirms that arbitration agreements, like any other contracts, can be waived. This means plaintiffs now have a better chance to argue against arbitration and pursue their claims in court if an employer’s actions indicate they have given up the right to arbitrate.

Case Overview: Quach v. California Commerce Club, Inc.

In 2018, Peter Quach initiated a lawsuit against his former employer, California Commerce Club, Inc., alleging discrimination, harassment, and retaliation. Although the Commerce Club had an arbitration agreement with Quach, they initially struggled to locate the full document. This led them to proceed with litigation, including discovery and depositions, rather than filing a motion to compel arbitration.

After more than a year of litigation, the Commerce Club eventually found the complete arbitration agreement and sought to enforce it. Quach opposed this move, arguing that the employer had waived its right to arbitration due to their extended involvement in the case.

The trial court ruled in favor of Quach, determining that the Commerce Club’s actions showed an inconsistency with the intent to arbitrate, thus prejudicing Quach. The Court of Appeal overturned this decision, finding insufficient evidence of prejudice. In 2022, the U.S. Supreme Court’s ruling in Morgan v. Sundance, Inc. clarified that prejudice is not required to prove waiver under the Federal Arbitration Act (FAA), which the California Supreme Court followed.

Guerra & Casillas LLP’s Commentary and Approach

At Guerra & Casillas LLP, we know that arbitration agreements, often used by employers to keep disputes private, do not always serve the best interests of plaintiffs. Recent legal developments emphasize the importance of using waiver as a strategy to challenge arbitration. We are dedicated to helping our clients navigate this complex area of law and effectively use waiver to pursue litigation when the other party’s actions show they have given up their right to arbitrate.

Key Recommendations for Managing Arbitration Rights:

1. Immediate Review and Action: When a dispute arises, it’s important to immediately review any arbitration agreements. Our team helps clients quickly identify and evaluate these agreements to determine if they are defective or unenforceable.
2. Consistency in Legal Strategy: Failing to address arbitration while engaging in litigation can lead to claims of waiver. We ensure that employers are held accountable when their actions contradict their stated intent to arbitrate.
3. Customized Legal Solutions: Every case is different, so we tailor our strategies to meet the unique needs of each client. Whether you are an employer or an individual, we provide expert advice on the enforceability of arbitration agreements and develop solutions that best protect your interests.

Practical Insights for Employees

The Quach decision underscores the importance of understanding what you’re agreeing to when presented with a stack of onboarding documents at a new job. Often buried within these papers is an arbitration agreement, which means you could be waiving your right to a jury trial. Arbitration can limit your ability to take your case to court, leaving you with fewer options to fight for your rights.  In order to protect your rights, gain an understanding whether each document presented is mandatory to sign, read each document carefully before signing it, and ask questions if you do not understand what you are being asked to sign. 

At Guerra & Casillas LLP, we help employees navigate these agreements and ensure they fully understand what they’re signing. Here’s how we can assist:

• Thorough Agreement Review: We carefully examine the arbitration clauses in your employment agreements so that you are aware of the potential consequences and can make informed decisions.
• Strategic Guidance: Our team offers advice on how to approach disputes involving arbitration clauses, guiding you on the best ways to protect your rights and challenge arbitration if it’s not in your best interest.
• Effective Representation: If arbitration becomes an issue, we’re prepared to challenge its enforceability and fight for your right to pursue litigation, helping you reclaim the power to take your case to court.

Conclusion

The evolving legal landscape surrounding arbitration agreements necessitates careful management to avoid unintended waivers. Guerra & Casillas LLP is here to provide the expertise and support needed to navigate these challenges effectively. By acting promptly and consistently, and with our tailored legal solutions, you can protect your arbitration rights and resolve disputes efficiently.

For more information or to discuss how we can assist with arbitration-related matters, contact Guerra & Casillas LLP today. Our experienced team is ready to help you safeguard your rights and achieve the best possible outcomes for your legal challenges.