From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...
Nov. 10 — An arbitration clause in a Taco Bell job application is unenforceable because it’s unclear whether it applies to franchisees, a California appeals court ruled ( Mendoza v. Century Fast Foods, Inc. , 2016 BL 374132, Cal. Ct. App., 2d Dist., No. B267158, unpublished 11/9/16 ).
The ruling underscores that arbitration is a creature of contract law that is subject to ordinary rules of contract interpretation. The franchisee might have been successful if the arbitration clause used its name rather than a vague term.
Jesus Mendoza sued franchisee Century Fast Foods Inc. for allegedly failing to provide meal and rest breaks as required by state law. He also said the company didn’t pay for all hours worked, which deprived him of earned overtime.
Employment disputes against Taco Bell or “its related companies” must be arbitrated, the clause states. Franchisee Century Fast Foods Inc. presented no court rulings on arbitration that have interpreted such terms to include franchisees, Justice Tricia A. Bigelow wrote Nov. 9 for the California Court of Appeal.
Mendoza and Century presented rulings from courts that had analyzed whether “related companies” includes franchisees. In light of the different opinions, the term was ambiguous, Bigelow said.
Contract law principles generally hold that ambiguous terms are resolved against the pact’s drafter, especially when the drafter has superior bargaining power or some other advantage over the other side. The ambiguity in the job application put the burden on Century to show Mendoza understood it required him to arbitrate disputes with the franchisee.
Century didn’t meet its burden, Bigelow said, refusing to compel arbitration.
Attorneys on both sides and for Century didn't respond Nov. 10 to requests for comment.
Matern Law Group attorneys Matthew Matern, Dalia Khalili and Roy Suk in Manhattan Beach, Calif., represented Mendoza. Fisher & Phillips attorneys Lonnie Giamela in Los Angeles and Irvine, Calif., and Sarina Saluja in Los Angeles represented Century.
To contact the reporter on this story: Jon Steingart in Washington at email@example.com
Text of the opinion is available at http://www.bloomberglaw.com/public/document/Mendoza_v_Century_Fast_Foods_Inc_No_B267158_2016_BL_374132_Cal_Ap.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)