ADR Update: Who Decides If There Will Be a Class? Universal Protection Service v. Superior Court

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 contact www.grossmanmediation.com.

California employment lawyers are very familiar with the scenario of an employee filing a lawsuit in court, the employer filing a petition to compel arbitration, and the employee vigorously opposing the petition. In an interesting twist, the employee in Universal Protection Service, L.P. v. Superior Court of San Diego County¹ filed a class action claim in arbitration and the employer attempted to move the case to court, in order to obtain a ruling that the arbitration would be limited to the employee alone. The case raises the important question of who should decide—the arbitrator or the court—whether, under the terms of the arbitration agreement (assuming silence on the issue), the arbitration can proceed as a class action or whether it must be limited to the individual employee who filed the claim.

The case began when the employee filed for arbitration pursuant to the arbitration clause, which provided that "any and all disputes or claims" the parties may have against each other, with certain exceptions not relevant here, must be arbitrated. The employee’s arbitration demand included eleven causes of action for violations of wage and hour laws, such as unpaid overtime and missed meal and rest breaks. The employee’s arbitration demand expressly stated that she was bringing the claim on behalf of herself and others similarly situated (i.e., a class action), and that in addition to other remedies, she was seeking penalties under the Private Attorneys General Act of 2004 (PAGA).