Little v. Auto Stiegler, Inc.
Citation | 29 Cal.4th 1064,63 P.3d 979,130 Cal.Rptr.2d 892 |
Decision Date | 27 February 2003 |
Docket Number | No. S101435.,S101435. |
Court | United States State Supreme Court (California) |
Parties | Alexander M. LITTLE, Plaintiff and Respondent, v. AUTO STIEGLER, INC., Defendant and Appellant. |
Fisher & Phillips, Christopher C. Hoffman and Jeffrey R. Thurrell, Irvine, for Defendant and Appellant.
Fine, Boggs, Cope & Perkins, Ned A. Fine, John P. Boggs, Half Moon Bay, and Michael K. Perkins for California Motorcar Dealers Association as Amicus Curiae on behalf of Defendant and Appellant.
Winston & Strawn and Lee T. Paterson, Los Angeles, for The Employers Group as Amicus Curiae on behalf of Defendant and Appellant.
Maxie, Rheinheimer, Stephens & Vrevich and Darin L. Wessel, San Diego, as Amici Curiae on behalf of Defendant and Appellant.
Moskowitz, Brestoff, Winston & Blinderman, Nelson E. Brestoff and Dennis A. Winston, Los Angeles, for Plaintiff and Respondent.
McGuinn, Hillsman & Palefsky, Cliff M. Palefsky, Keith Ehrman, San Francisco; Pine & Pine and Norman Pine, Encino, for California Employment Lawyers Association as Amicus Curiae on behalf of Plaintiff and Respondent.
In this case, we consider four interlocking questions: (1) Is a provision in a mandatory employment arbitration agreement that permits either party to "appeal" an arbitration award of more than $50,000 to a second arbitrator, unconscionable; (2) if it is unconscionable, then should that unconscionable provision be severed from the rest of the arbitration agreement and the agreement enforced, or is the entire agreement invalid; (3) if the former, then in reviewing the rest of the arbitration agreement, do the minimum requirements for arbitration of unwaivable statutory claims that we set forth in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 99 Cal.Rptr.2d 745, 6 P.3d 669 (Armendariz) apply also to claims that an employee was terminated in violation of public policy; (4) if yes, then must one of those requirements—that the employer imposing mandatory arbitration—on the employee must pay all costs unique to arbitration be reconsidered and revised in light of a post-Armendariz United States Supreme Court decision on arbitration costsharing, Green Tree Financial
Corp.-Ala. v. Randolph (2000) 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (Green Tree)?
We conclude as follows: (1) the appellate arbitration provision for arbitration awards over $50,000 is unconscionable; (2) that provision should be severed and the rest of the arbitration agreement enforced; (3) a suit claiming wrongful termination in violation of public policy should be subject to the requirements set forth in Armendariz; and (4) Green Tree does not require that we modify Armendariz's cost requirements. We accordingly partly reverse the Court of Appeal's judgment.
Alexander M. Little worked for Auto Stiegler, Inc., an automobile dealership. Little eventually rose to become Auto Stiegler's service manager. He alleges that he was demoted, then terminated, for investigating and reporting warranty fraud. He filed an action against defendant for tortious demotion in violation of public policy; tortious termination in violation of public policy; breach of an implied contract of continued employment; and breach of the implied covenant of good faith and fair dealing. In the first through third causes of action, he sought compensatory and punitive damages. In the fourth cause of action, plaintiff sought only contract breach damages. He sought no relief under the California Fair Employment and Housing Act (FEHA). (Gov.Code, § 12900 et seq.)
Little signed three nearly identical arbitration agreements while employed by defendant in June 1995, October 1996, and January 1997. The most recent of the three stated as follows:
Auto Stiegler's initial motion to compel arbitration was granted. Following our decision in Armendariz, the trial court, upon plaintiffs request for reconsideration, denied defendant's motion to compel arbitration. The trial court ruled:
The Court of Appeal reversed. It held that the Armendariz requirements did not apply to nonstatutory claims. Further, it rejected the claim that the arbitration agreement was unconscionable. It focused on Armendariz's discussion of whether both parties were bound to arbitrate, and concluded that the arbitration agreements did in fact bind both parties. The Court of Appeal did not consider whether the arbitration "appeal" triggered by an award of greater than $50,000 was unconscionable. Finally, the court concluded that under the United States Supreme Court's decision in Green Tree, silence as to who would bear the costs of arbitration was not a basis for invalidating the agreement. We granted review.
As recounted, the arbitration agreement provided that "[a]wards exceeding $50,000.00 shall include the arbitrator's written reasoned opinion and, at either party's written request within 20 days after issuance of the award, shall be subject to reversal and remand, modification, or reduction following review of the record and arguments of the parties by a second arbitrator who shall, as far as practicable, proceed according to the law and procedures applicable to appellate review by the California Court of Appeal of a civil judgment following court trial." Little contends this provision is unconscionable. We agree.
6 P.3d 669.) It...
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