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Paralegal Fees

Ralphs Arbitration Agreement Struck Down

The Fourth District Court of Appeal has invalidated the arbitration agreement used by Ralphs Grocery Co. in California. In Metters v. Ralphs Grocery Co. (2008) __ Cal.App.4th __ (originally issued as an unpublished opinion, and but ordered published in April), the trial court found evidence that the employee had not been aware that he was agreeing to mandatory arbitration, and thus could not be bound by a "dispute form" used by Ralphs Grocery for its dispute resolution process.

The company's policy provides an agreement to arbitrate as part of the request for dispute resolution. The form is entitled "Notice of Dispute and Request for Resolution Form." Among other things, the court noted, the form does not resemble a contract, and its title does not alert employees to the nature of the document; it does not clearly warn employees to pay special attention to the arbitration provisions; no one tells employees they are signing an arbitration agreement. For these and other reasons, the trial court found no meeting of the minds, and therefore no contract to arbitration.

The court was not persuaded by language in the form which clearly stated that employees were not required to sign do so in order for their complaints to be investigated. "A transactional attorney sitting in an office somewhere…[could] figure out what it meant," but it wasn't likely that an employee would.

The court observed, “It could be that a transactional attorney sitting in an office somewhere could have this form, start kind of pulling on the string and follow it back somehow and maybe figure out what it meant, if that is possible. . . . [¶] . . . [¶] [I]t does appear to be an attempt to sort of backdoor . . . this employee through this kind of ambiguous, nebulous form and say, well, if you want your . . . complaint investigated, just sign this and life will be good. [¶] I don’t think I can find there is . . . in the real world a meeting of the minds between Mr. Metters and Ralphs based on this.”

Thus,

The record contains substantial evidence to support the trial court’s finding that there was no valid agreement to arbitrate Metters’ discrimination claim. The order denying the motion to compel arbitration is affirmed.

You can download the full opinion of Metters v. Ralphs Grocery Co. here in pdf or word format.

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