A recent case provides that an employee’s individual arbitration agreement is enforceable when it is consistent with a collective bargaining agreement. In the case of Willis v. Prime Healthcare Servs., Inc., 231 Cal. App. 4th 615 (2014), the California Court of Appeal held that an employee’s individual arbitration agreement was not automatically invalidated by a collective bargaining agreement, to which the employee was party, because the two agreements were not in conflict. The court considered the claims under the Federal Arbitration Act (“FAA”). The court found that, although an employee cannot waive the benefits to which he or she is entitled under a collective bargaining agreement, the employee may make binding individual agreements, so long as those agreements are consistent with the collective bargaining agreement.
The Plaintiff, Maucabrina Willis, was hired to work at Centinela Hospital by Centinela Freeman Health System (“CFHS”). She signed an employment application and an acknowledgement form. Both the application and acknowledge form contained provisions whereby the plaintiff agreed to submit any employment-related disputes to arbitration. These arbitration provisions in the application and acknowledgement form constituted the Plaintiff’s “individual arbitration agreement.” At the same time, there existed a collective bargaining agreement (“CBA”) between the hospital and Service Employees International Union United Healthcare Workers West (“the Union”). The Plaintiff was a member of the union member and covered by the collective bargaining agreement. Later, Prime Health Care Centinela bought the hospital from CFHS, but Prime assumed all of CFHS’s legal obligations, namely, the collective bargaining agreement. The CBA was still in effect when the hospital terminated the Plaintiff’s employment.
After the hospital terminated her employment, the Plaintiff filed a class action complaint against the defendant, seeking recovery for failure to pay minimum wages, failure to pay all wages owed upon termination, and civil penalties for inaccurate wage statements. In response, the Defendant filed a motion to compel arbitration and dismiss the claims. The Defendant argued that the plaintiff was required to arbitrate her employment pursuant to the individual arbitration agreement. The trial court denied the Defendant’s motion to compel, finding that the individual arbitration agreement was in conflict with the collective bargaining agreement, and therefore unenforceable.
On appeal, the Defendant argued that the trial court erred when it found that the Plaintiff’s individual arbitration agreement was unenforceable because it was inconsistent with the collective bargaining agreement. Instead, the Defendant argued that the Plaintiff’s individual arbitration agreement is not inconsistent with the collective bargaining agreement, which means that the terms of the individual arbitration agreement are enforceable. The Appellate court agreed with the Defendant.
Even though the Plaintiff could not make an individual agreement that would effectively waive any of the benefits to which she was entitled under the CBA, the Plaintiff could make a separate individual contract, so long as the individual agreement was consistent with the CBA. That is exactly what happened in this case. The Plaintiff’s individual arbitration agreement did not conflict with the terms of the CBA. Here, the Plaintiff had sued the Defendant regarding issues and claims that the CBA did not address but her individual arbitration agreement did address. This means there was no conflict between the CBA and her individual agreement, so the individual agreement could therefore govern the Plaintiff’s suit. Further, there was no conflict between the arbitration provisions in the Plaintiff’s individual agreement and the CBA. The CBA’s arbitration agreement governed a narrow category of CBA related disputes, whereas the Plaintiff’s individual arbitration agreement applied to any disputes. For this reason, the court reversed the trial court’s decision denying the motion to compel ordered the trial court to compel arbitration.
Willis is an important case for unionized employees, who nonetheless have individual agreements with their employers. Employees should know that they may not be protected from relatively unfavorable provisions in their individual contracts, just because they are party to a CBA. Rather, the courts may enforce those provisions of the employee’s individual contract that are consistent with the CBA. Employees should therefore pay special attention to the provisions of their individual agreements. In addition, employees considering bringing suit against their employer should pay careful attention to whether or not their claims fall under their CBA or any individual agreements they may have made. If you have a wage or hour dispute, contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside, and Los Angeles. Call 714-937-2020.