Trivedi v. Curexo Technology: a warning about pre-dispute employment arbitration agreements

Posted by David Krol

Take a look at your pre-dispute employment arbitration agreements. Do they have standard prevailing party attorneys’ fees provisions and provisions which purport to allow the parties access to the courts for injunctive relief? If they do, and if the arbitration forum’s applicable rules have not been provided to the employees, these agreements may be unenforceable – rendering the employer liable for attorneys’ fees if the employer attempts to enforce such agreements. That was the result in Trivedi v. Curexo Technology Corporation (Sept. 28, 2010, RG09459748) ____ Cal.App.4th _____ (2010 WL 3760224).

In Trivedi, the Court of Appeal found that a pre-dispute employment arbitration provision was procedurally unconscionable, because it was prepared by the employer and was a mandatory part of the arbitration agreement, but the employer failed to provide the employee with a copy of the arbitration rules under which the employee would be bound.

The Court of Appeal also found that the clause was substantively unconscionable, because it did not limit the employer’s right to recover attorneys fees to instances where the employee’s claims were found to be “frivolous, unreasonable, without foundation, or brought in bad faith,” which is the standard under California case law, and because it was far more likely that the employer, not the employee, would seek to enforce an injunctive relief provision in court.

After refusing to enforce the provision, the Court of Appeal awarded costs and attorneys’ fees to the employee on appeal.

Pre-dispute employment arbitration agreements which purport to expand employers’ rights to attorneys’ fees, and which contain injunctive relief provisions, and which are executed without ensuring that the employees have received the rules of the applicable arbitration forum, may be unenforceable in light of this new decision.

Contact David Krol

PRESS RELEASE: Gary Torrell Wins La Toya Jackson Royalty Dispute

Valensi Rose, PLC partner Gary F. Torrell prevailed on behalf of his client La Toya Jackson by successfully opposing a trustee's motion to obtain additional royalties due to the internationally renowned entertainer.

Mr. Torrell said, "This was a very challenging case, to convince a judge in New York that Ms. Jackson's creditors should not obtain additional royalties, even though they had not received any payment. Luckily, the judge agreed with my arguments and issued a well-reasoned opinion in favor of our valued client."

A written trust agreement allowed the trustee to collect Ms. Jackson's royalties for a specified time period, pay the priority claims of the trustee and his lawyers, and then distribute the balance to certain creditors. Because the priority claims exceeded $780,000, they were expected to consume nearly all of the royalties collected during the term of the creditor trust. As a result, the trustee filed a motion seeking to extend the term for an additional five years and thereby obtain additional royalties for the benefit of creditors.

On August 5, 2010, the Honorable James M. Peck issued a published opinion denying the motion. The court agreed with Mr. Torrell's argument that it would be unfair and inequitable to Ms. Jackson to grant the motion, despite no distributions to creditors, because Ms. Jackson had honored the trust agreement and was not responsible for the trustee's high fees, which had consumed the allocated royalties.

The judge also interpreted the trust agreement to not permit an extension of the term to allow creditors to obtain additional royalties otherwise due to Ms. Jackson.

Contact Gary Torrell...

Warning to California Employers

Posted By

Laurie Murphy

The federal courts have long held that "stray remarks which are defined as isolated discriminatory comments unrelated to the decision-making process were not admissible to prove employment discrimination. The California Supreme Court recently (in ruling against Google in an age discrimination case) held that stray remarks can be considered in the totality of the circumstances of the case. Bottom line, this will make it even harder for employers to defend employment discrimination cases prior to trial.

Attorneys Beware

By
Laurie Murphy

A recent California appellate decision holds that an attorney who entrusted a filing with a paralegal who did not get the papers filed timely did not adequately supervise his employee and was therefore not saved when the trial court found for the defendant because the opposition to the motion for summary judgment was not timely filed. The trial court did not buy plaintiff's counsel's argument that the late filing was the result of surprise, mistake or excusable neglect. The court of appeals agreed and found that it was inexcusable neglect for the attorney to entrust the preparing and filing of the opposition to a summary judgment motion to his paralegal who took the file on vacation with her and did not file it timely.

Should Chipotle Lower Their Counters?

Posted By
Lynda Chung

In a decision that came down a few days ago, the Ninth Circuit Court of Appeals held that Chipotle Mexican Grill violated the Americans with Disabilities Act because its food preparation counters were too high for for wheelchair-bound customers, meaning that such customers could see the food on display or how it was assembled. (Antoninetti v. Chipotle Mexican Grill, Inc. (2010) 2010 DJDAR 11537.)

Both the disabled plaintiff and Chipotle agreed that all, except for the tallest wheelchair-bound persons, could not see the food preparation counter or the food on display, such as salsa, guacamole, cheese, lettuce and tortilla. The Ninth Circuit found that Chipotle's 45-inch tall wall violated federal regulations which require that a main counter height not exceed 36 inches.

While I sympathyze for the plaintiff for not being able to see the food preparation, I wonder whether there were reasons why the counter in the restaurant was 45-inch tall. Perhaps that was the optimal height for the average-height employee assembling food while standing. Maybe federal regulations should not apply to this scenario as lowering the counter may create problems for the workers who are on their feet all day wrapping burritos.

Tax Law Update

Posted by Michael Morris

Tax laws are always changing. Here are some of the most recent changes that may affect you and your clients.
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Dynasty Trusts: The Power Of Compounding And Avoiding Estate Tax

By Geoffrey A. Weg

Clients who engage in estate planning are generally thinking long-term, and want to provide financial benefits for future generations. The dynasty trust is a uniquely powerful estate planning tool to achieve these goals.

What is a Dynasty Trust?
Simply stated, a dynasty trust is an irrevocable trust with an extremely long or unrestricted term. The trust is governed by the terms initially established by the grantor, and is designed to hold assets in trust without direct ownership of the trust assets being transferred to any beneficiary. Successive generations of beneficiaries may receive distributions of income and/or principal. For transfer tax purposes – gift tax and generation skipping transfer tax ("GST" tax) – trust assets are usually valued at the time of transfer into the trust. The trust assets and any future appreciation thereon are generally exempt from estate tax.

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