Hoover v. American Income Life Ins. Co

In Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, the plaintiff worked as a sales agent for a life insurance company. Before working as an agent, she executed an agent contract which was incorporated into a collective bargaining agreement (CBA). The agent contract specifically stated that an agent was an independent contractor, not an employee. The agent contract had an arbitration clause, requiring the parties to arbitrate "'all disputes, claims, questions, and controversies of any kind or nature arising out of or relating to'" the agent contract. (Hoover, supra, 206 Cal.App.4th at p. 1199.) The CBA also expressly disclaimed that agents were employees. It included a grievance procedure, but no separate arbitration agreement. (Id. at pp. 1198-1199.) After the plaintiff was terminated, she asserted statutory labor claims against the insurance company under sections 203, 1194 and 2802. (Hoover, supra, 206 Cal.App.4th at p. 1197.) The company moved for an order compelling arbitration, but the trial court denied the motion. The appellate court affirmed, holding that the company had waived its right to seek arbitration by its prejudicial litigation tactics. (Id. at p. 1203.) The appellate court further determined that even if the employer had not waived its right to seek arbitration, "state statutory wage and hour claims are not subject to arbitration, whether the arbitration clause is contained in the CBA or an individual agreement." (Id. at pp. 1206, 1198.) In reaching this determination, the appellate court first rejected the company's federal preemption argument, concluding that it had failed to meet its burden of proving that the subject agreement involved interstate commerce. (Id. at p. 1208.) The court then noted that the plaintiff's claims were based on statutory rights that were not subject to negotiation or waiver. (Ibid.) In order to waive the right to a judicial forum for resolving these statutory rights, the court held that "there must be a clear and unmistakable waiver of a judicial forum. In determining whether there has been a sufficiently explicit waiver of a judicial forum, courts look to the generality of the arbitration clause; the explicit incorporation of statutory requirements; and inclusion of specific statutes, identified by name or citation. " (Ibid.) The court then determined that the general language of the arbitration clause in the agent contract did not evidence a sufficiently explicit waiver of the plaintiff's statutory employment claims. According to the court, "even if the parties could resolve statutory rights violations through arbitration, there is no provision in the agent contract or the CBA where Hoover agreed to do so. Even if the issues of minimum wage, reimbursement, and earned wages could be construed as subjects of the two contracts, Hoover still did not agree to arbitrate her statutory labor claims." (Ibid.)