Wednesday, January 24, 2018
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Court of Appeal:
Job Applicant Must Abide by Arbitration Agreement
Panel Says Woman Who Was Offered Employment Conditioned on Passing Medical Exam, And Failed It, Can’t Avoid Arbitration in Suit Over Disability Discrimination
By a MetNews Staff Writer
The Court of Appeal for this district has affirmed an order by Los Angeles Superior Court Judge John Shepard Wiley Jr. that a poker palace in the City of Commerce is entitled to enforcement of an agreement to arbitrate a dispute with a would-be employee who flunked a medical examination.
Div. Seven’s unpublished opinion was rendered Monday by Div. Seven. Presiding Justice Dennis Perluss was the author.
Plaintiff Brittney Lee applied to the Commerce Casino to be a “runner”—running among tables, selling additional chips to gamblers at the various tables. Employment was offered conditioned on signing an arbitration agreement—which she did—and passing a medical exam, which she didn’t.
Disability Discrimination Alleged
Lee sued, in what she seeks to turn into a class action, alleging disability discrimination. Balking at enforcement of the agreement she signed calling for arbitration of any dispute in connection with her “recruitment, employment…or termination,” she executed a declaration claiming that she “signed the Agreement with the expectation that I would be hired and actually perform work and receive pay,” adding:
“In other words, I would not have signed the Agreement and undergone a medical examination unless I was actually being hired to work by Defendant.”
Wiley held that the agreement was valid, declaring:
“[H]er consideration literally was consideration: Commerce Casino considered Lee for possible employment and sent her for testing, which unfortunately she did not pass. The chance to try out, however, is an opportunity to get a foot in the door. It can be valuable indeed. This consideration supports the contract’s enforceability.”
The judge dismissed the class action claims and stayed the action pending the outcome of arbitration.
Change in Approach
On appeal, Perluss said, Lee was not arguing, as below, that there was no consideration for her agreement to arbitrate, but that the casino could not enforce a promise by her because it breached its own obligation under the contract: its promise to hire her.
Perluss zeroed in on her allegation in the complaint that she was, actually, hired, but was then discharged based on the medical test results. He continued:
“[N]otwithstanding the general proposition that seeking to compel arbitration is analogous to seeking specific performance, Lee has not cited any authority supporting her argument a party seeking to enforce an arbitration agreement must first prove it has performed under the contract. In fact, the rule proposed by Lee makes no sense. The contractual duty to arbitrate must be enforceable even after an alleged breach of the contract by the party seeking to enforce that duty. Otherwise, a claim for breach of contract could not be arbitrated without the court first determining whether the party seeking arbitration had performed his or her contractual obligations….
“In short, while seeking to compel arbitration may in some ways be analogous to a suit for specific performance, the analogy does not mean that an alleged breach or failure to perform precludes enforcement of the agreement to arbitrate the dispute….”
The jurist said that even if a party could enforce an arbitration agreement only it had fulfilled its own obligations under a contract, as Lee asserts, “Commerce did not fail to perform under the contract.” The contract, he noted, established that employment would be “at will,” reasoning:
“[A]n employee has no breach of contract claim where the employment contract specified at-will employment….
“Lee has not explained why this rule should not be applied to job applicants, as well as current employees. If an employer can terminate employment at any time for any lawful reason without violating an at-will employment contract, there is no reason termination cannot occur prior to the time a prospective employee actually begins work.”
Shifting gears—regarding Lee, as Wiley did, as having only been promised a chance at being employed rather than the Casino having hired her—Perluss added:
“Moreover, as the trial court correctly observed, the promise to employ Lee cannot be understood as anything other than a promise of the opportunity of employment—a promise Commerce fulfilled by extending Lee an offer of employment, giving her preemployment paperwork and sending her for a physical examination.”
The case is Lee v. California Commerce Club, B276171
Howard L. Magee and Kwanporn Mai Tulyathan of Diversity Law Group, along with Dennis S. Hyun, represented Lee, and Kevin V. Koligian and Irene V. Fitzgerald of Littler Mendelson acted for the casino.
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