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A federal district court issued an order compelling arbitration of an employee's statutory claim for mileage reimbursement, though the Court severed provisions in the arbitration agreement providing for a non-mutual scope and out-of-state proceedings.
In Arreguin v. Global Equity Lending, Inc., No. C 07-06026 MHP, 2008 WL 4104340 (N.D. Cal. Sept. 2, 2008), Arreguin was employed by Global Equity Lending (Global). Arreguin signed a broadly worded employment arbitration agreement with Global. As part of her duties, Arreguin was required to use her personal automobile. After the employment relationship ended, Arreguin filed suit on her own behalf and those similarly situated for Global's alleged failure to reimburse mileage expenses under Cal. Labor Code § 2802 and Cal. Bus. & Prof. Code § 17200, et seq. Global filed a motion to compl arbitration.
In opposing arbitration, Arreguin first challenged the agreement's forum selection clause, which required arbitration of any dispute to take place in Georgia and be governed by Georgia law. While the Court agreed that the forum selection clause was broad enough to encompass all contract and tort claims, the California statutory claim asserted by Arreguin could not be waived by contract. According to the Court, this distinguished Arreguin's claim from disputes over the "enforcement" of the agreement and its "construction" or "interpretation" falling within the scope of the forum selection provision.
However, the Court found that the statutory nature of Arreguin's claim did not otherwise place it "beyond the reach of arbitration," as long as the arbitration agreement was not unconscionable and complied with the general requirements set forth in Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83, 102 (Cal. 2000). While the Court determined that the agreement provided for neutral arbitrators, more than minimal discovery, a written award, and all forms of relief otherwise available in court, it found the location of the arbitration proceedings in Georgia "imposes on the employee unreasonable costs as a condition of access to the arbitration forum" in a manner impermissible under Armendariz.
Additionally, the Court determined that the arbitration agreement was non-mutual, reserving causes of action most likely to be asserted by the employer to litigation while requiring the employee to arbitrate all claims. Combined with the minimal procedural unconscionability in the adhesive nature of the agreement, the Court found the provisions providing for non-mutual arbitrable claims and a Georgia location to be unenforceable. However, the Court merely severed these provisions and enforced the balance of the agreement in accordance with the agreement's savings clause.
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