Pearson Dental Supplies, Inc. v. Superior Court

In Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, the California Supreme Court again emphasized that judicial review of contractual arbitration awards is very limited, and that "generally speaking, a court is not permitted to vacate an arbitration award when the award is based on errors of law." (Id. at p. 669.) However, the court found the case before it in fact involved a reviewable legal error. (Id. at p. 679.) In Pearson, an arbitrator erroneously concluded that plaintiff had not submitted his claims to binding arbitration within the requisite timeframe and therefore had forfeited his rights to proceed in arbitration. (Id. at pp. 671-782.) The court underlined that it was crafting a "narrow rule" to address the situation before it. (Pearson, supra, 48 Cal.4th at p. 679.) The court framed the issue as one in which "as a result of the arbitrator's clear legal error, plaintiff's claim was incorrectly determined to be time-barred. Indeed, the legal error misconstrued the procedural framework under which the parties agreed the arbitration was to be conducted, rather than misinterpreting the law governing the claim itself. It is difficult to imagine a more paradigmatic example of when 'granting finality to an arbitrator's decision would be inconsistent with the protection of a party's statutory rights' citation than the present case, in which, as a result of allowing the procedural error to stand, and through no fault of the employee or his attorney, the employee will be unable to receive a hearing on the merits of his FEHA claims in any forum. . . . We therefore hold that when, as here, an employee subject to a mandatory employment arbitration agreement is unable to obtain a hearing on the merits of his FEHA claims, or claims based on other unwaivable statutory rights, because of an arbitration award based on legal error, the trial court does not err in vacating the award." (Id. at p. 680.)