Samaniego v. Empire Today, LLC

Facts

Ps work as carpet installers for Flooring Install, Inc., an alleged subsidiary or affiliate of D. When hired and later during employment, Ps were given form contracts and told to sign them if they wanted to work for D. Both contracts were presented only in English. Ps cannot read English or can only understand simple written sentences. The contracts were offered on a non-negotiable, take-it or leave-it basis, with little or no time for review. The Agreement is 11 single-spaced pages of small-font print riddled with complex legal terminology. The arbitration provision is set forth in the 36th of 37 sections. The clause made arbitration mandatory. The Agreement also includes a shortened six-month statute of limitations for subcontractors to sue under the Agreement and a unilateral fee-shifting provision that requires them to pay any attorneys' fees D might incur “to enforce any of its rights hereunder or to collect any amounts due.” Although the Agreement directs that arbitration will be governed by the commercial rules of the American Arbitration Association, those rules were not attached to it or otherwise provided to Ps. Ps sued D in a putative class action for unlawful misclassification of its carpet installers as independent contractors. Ps allege numerous Labor Code violations, including that D failed to pay minimum wage and overtime compensation; refused to indemnify employees for job-related expenses; wrongfully deducted from employee pay; coerced employees to make purchases from the company; failed to provide required meal periods; and failed to pay all wages due upon installers' termination. D motioned to compel arbitration. The court found the Agreement was “highly unconscionable from a procedural standpoint” and demonstrated “strong indicia of substantive unconscionability,” and therefore denied the motion to compel. D appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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