Metropolitan News-Enterprise


Thursday, January 24, 2013


Page 1


S.C. Lets Stand Employee’s Victory in Arbitration Case




The California Supreme Court yesterday unanimously declined to review a ruling by this district’s Court of Appeal that an employee did not, by her conduct, create an “implied-in-fact” agreement to arbitrate employment-related disputes.

The justices, at their weekly conference in San Francisco, left standing the Oct. 16 decision of Div. Four in Gorlach v. The Sports Club Company (2012) 209 Cal. App. 4th 1497. The lower panel upheld the trial court’s decision in favor of the employee, who was assigned to collect signed arbitration agreements from her co-workers, and who informed her superiors that a handful of them had not signed, but failed to mention that she had not done so herself.

Susan Gorlach quit as Sports Club’s human resources manager in August 2010, and sued the company the following January. She charged Sports Club with wrongful termination, retaliation, paramour sexual harassment, intentional infliction of emotional distress, defamation, breach of contract, and negligence.

The company filed a general denial and pled 26 affirmative defenses, including that the plaintiff was required to arbitrate.

Evidence presented in support of the company’s motion to compel arbitration showed that Gorlach had been responsible for preparing an updated company handbook containing an arbitration agreement and was in charge of getting every employee to sign it as a condition of new or continued employment.

Gorlach made numerous presentations regarding the handbook and the arbitration pacts, and when employees did not sign immediately, she followed up with them. This activity continued over the course of several months, and Gorlach periodically reported as to how many of the more than 400 employees had attended presentations, how many had signed, and how many had not signed.

One week before resigning, Gorlach sent her superiors an email message, saying she was going to give the remaining unsigned employees “time to seek counsel prior to signing to prevent any forced agreement.”

In denying the motion to compel, Los Angeles Superior Court Judge Susan Bryant-Deason said she believed that Gorlach made “omissions which intentionally misled” company officials “to believe that she was on board and she said she had signed.” But the judge said there was no agreement, because Gorlach quit without signing and “clearly didn’t want to go to arbitration”.”

Justice Steven Suzukawa, writing for the Court of Appeal, said there was no binding agreement, rejecting the company’s equitable estoppel argument as well as its claim of an implied agreement.

Sports Club, he said, never relied on Gorlach’s implied representations that she had signed. The process of obtaining signatures had not been completed, and there had been no terminations of non-signing employees and no decision made on how to handle refusals to sign, he said, so it could not be concluded that she would have been terminated prior to her resignation date if the company knew she had not signed.

In other conference action, the justices:

Denied review of the summary denial, by this district’s Div. One, of the most recent habeas corpus petition by Manson family member Leslie Van Houten. Van Houten, now 63, was 19—the youngest of the defendants—at the time of what have become known as the Tate/LaBianca murders.

Van Houten admitted her involvement in the August 1969 murders of Leno and Rosemary La Bianca in their Cielo Drive home. One day earlier, actress Sharon Tate and four others were murdered at the home Tate rented with her husband, director Roman Polanski, who was in Europe at the time.

Van Houten was convicted of the La Bianca murders. She was not present during the Tate murders but was convicted of conspiracy to commit them.

Rosemary La Bianca was stabbed a total of 42 times, and Van Houten said at various times that she had herself stabbed the woman 14 or 16 times. Another Manson Family member testified that Van Houten admitted stabbing La Bianca after she was already dead and said “the more she did it the more fun it was.”

She has now been denied parole 19 times.

Unanimously denied review of two rulings by this district’s Div. Two that prevent cities from charging hotel bed tax on fees collected by online booking services such as Expedia, Hotwire, Priceline, Orbitz, and Travelocity.

Anaheim and Santa Monica alleged that they are being shortchanged because the companies take their commissions out of what the consumer pays, then remit the rest to the hotels, who then pay tax on the amounts they receive, rather than on “the total charge for lodging.”

But in a pair of unpublished opinions, both styled In re Transient Occupancy Tax Cases,  B230457 and B236166, Justice Victoria Chavez noted that the companies do not own or operate hotels, but merely provide information and take reservations in exchange for a commission.

The clear meaning of the ordinances, the justice said, is that tax is only chargeable on “the amount that the hotel itself charges and receives.”

Left standing an Oct. 12 ruling by the First District’s Div. Two that a suit by former employees of fashion retailer Wet Seal, who claimed they were illegally required to buy the company’s products in order to work there, and to drive their own vehicles for work purposes without mileage reimbursement, was properly denied class certification.

The panel said the trial judge did not abuse his discretion when he concluded that there were too many individual liability issues to allow the case to proceed as a class action, because many employees and supervisors signed declarations saying they were never subjected to the unlawful practices alleged by the plaintiffs.  

The case is Morgan v. Wet Seal, Inc. (2012) 210 Cal. App. 4th 1341.


Copyright 2013, Metropolitan News Company