Plaintiffs Required To Initiate Arbitration, California Court Holds

An arbitration agreement required the plaintiffs to initiate arbitration proceedings, not the employer, according to a California appellate panel, reversing an order that sent the case to court.

A group of five plaintiffs sued ACE American Insurance Company, alleging they were misclassified as exempt employees in violation of the state labor code.

ACE moved to compel arbitration pursuant to agreements that the plaintiffs had signed as a condition of their employment.

The agreement consisted of three parts. The first document stated that the employee agreed to arbitration in lieu of going to court. The second document explained the scope of arbitration in more detail, including that "[a] party who wants to start the [a]rbitration [p]rocedure should submit a demand within the time periods required by applicable law."