Ralphs Wage and Hour Class Action Moves to Arbitration

A California appeals court has reversed a lower court’s decision and ordered that the lead plaintiff in a proposed wage and hour class action lawsuit against Ralphs Grocery Co. must go to arbitration.

The trial court denied a petition by Ralphs to compel arbitration of a wage dispute with its former employee, Stephanie M., who in 2009 filed the wage and hour class action lawsuit Ralph’s on the grounds that the grocery chain violated provisions of the state Labor Code requiring employers to provide employees meal breaks, to allow rest periods, to pay for unused accrued vacation time upon termination, and to pay all wages owed upon termination.

Stephanie sought class action status certification of multiple classes of similarly situated Ralphs’ employees, including a meal period class, a rest period class, and a final wages class.

A Los Angeles Superior Court trial judge initially ruled that a class action waiver Ralphs used in its employment agreements was unenforceable. But the appeals court reversed that decision.

In its argument, Ralphs presented evidence that in her signed application for employment in 2008, the plaintiff “’acknowledged and understood’ Ralphs had a dispute resolution program that included a Mediation & Binding Arbitration Policy [Arbitration Policy] which applied to ‘all employees and applicants for employment’, and to ‘any employment-related disputes that exist or arise between Employees and [Ralphs] that would constitute cognizable claims or causes of action in a court or government agency under applicable law including individual statutory claims or disputes.’ In signing the application, (plaintiff) agreed to be “bound by the provisions, terms, and conditions of the [Arbitration] Policy'” and to waive her right to a judge or jury trial or to litigate proceedings in a local, state or federal court or agency.

The arbitration policy covered employment-related disputes, including those that involve the interpretation of the arbitration policy, as well as the employer-employee relationship and an employee’s employment or termination of employment with Ralphs, according to their appellate argument.

“There is no right or authority for any Covered Disputes to be heard or arbitrated on a class action basis, as a private attorney general, or on bases involving claims or disputes brought in a representative capacity on behalf of the general public, or other Ralphs employees (or any of them), or of other persons alleged to be similarly situated.”

Stephanie offered a host of technical legal arguments as reasons why the case should not be subject to arbitration.

Ralphs appealed the lower court’s decision and asked that arbitration be compelled.

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