Sonic-Calabasas A, Inc. v. Moreno
Filed May 29, 2009
Cite as B204902

Valid Employment Arbitration Agreement Defeats Administrative Wage Claim

Frank Moreno was a former employee of Sonic-Calabasas A, Inc. (Sonic) owning and operating an auto dealership.

Included in Moreno’s term of employment was a pre-dispute agreement requiring parties to submit employment disputes to “binding arbitration under the Federal Arbitration Act, in conformity with the procedures of the California Arbitration Act”.

The arbitration agreement covered all disputes that may arise out of the employment context requiring or allowing resort to any court or other governmental dispute resolution forum.

The said agreement was governed by Federal Arbitration Act (FAA).

Moreno left Sonic. Subsequently, he filed an administrative wage claim for unpaid vacation leave with the Labor Commissioner pursuant to the Berman process under section 98 of the Labor Code.

Sonic moved for the dismissal of the pending administrative action and petitioned the court to compel arbitration.

While the parties agreed to the application of arbitration agreement to the wage claim, they disagreed on whether the agreement included a waiver of the right to the Berman proceeding.

The Labor Commissioner argued that nothing in the agreement deterred Moreno from filing a claim under Section 98.

The superior court, in denying the petition to compel arbitration stated that as a matter of public policy the arbitration provisions of the employment contract were unenforceable and any petition to compel arbitration was premature.

Sonic appealed from such order of denial.

The appeal court reversed the order denying the petition to compel arbitration. The court ruled that since the employment arbitration agreement of the parties was governed by FAA, said agreement could be enforced to dismiss Moreno’s administrative wage claim against Sonic for unpaid vacation leave.

Hence, the superior court’s decision was reversed.