Arbitrating Independent Contractor Agreements
By Joel M. Grossman
Joel M. Grossman is a mediator and arbitrator with JAMS in Los Angeles. He has been selected four times as one of the Top Neutrals in California by the Daily Journal. For more information please go to www.grossmanmediation.com.
California employment lawyers know that when an employment agreement includes a mandatory arbitration clause, absent unconscionable terms, the contract will be enforced as long as it conforms to the basic provisions of Armendariz v. Foundation Health Psychcare Services, Inc.1 But what if the arbitration clause is found in what purports to be an independent contractor agreement? If the purported independent contractor wishes to challenge that classification, claiming that she is an employee and entitled to all of the benefits of employment (such as overtime and meal and rest breaks), must she submit her claim to arbitration per the contract? This is the primary issue in the recent court of appeal decision of Galen v. Redfin Corporation.2
Scott Galen worked as a real estate "field agent" for Redfin Corp., which is based in the State of Washington. He and Redfin had entered into a "Field Agent Independent Contractor Agreement," which, as the name suggests, provided that he would be an independent contractor, performing such tasks as holding open houses and conducting tours of houses for prospective buyers. He was required to pay for certain expenses, such as membership in a multiple listing service and auto insurance.