Brown v. Simplified Labor Staffing Solutions CA2/1
B339521
| Cal. Ct. App. | Jun 27, 2025Background
- Denise Brown, a former employee, sued Simplified Labor Staffing Solutions for employment-related claims, including sex discrimination.
- Brown had signed two arbitration agreements with Simplified during her employment; a 2017 agreement and a 2020 Mutual Arbitration Policy (MAP).
- The 2020 MAP expressly provided that arbitration would be governed solely by the Federal Arbitration Act (FAA) and the rules of the American Arbitration Association (AAA).
- In 2023, the trial court compelled arbitration under these agreements and stayed court proceedings.
- Brown later moved to withdraw from arbitration, arguing Simplified failed to pay arbitration fees timely, entitling her to proceed in court under California Code of Civil Procedure section 1281.98. The trial court granted her motion and sanctioned Simplified.
- Simplified appealed, arguing the FAA, not California’s procedural law, governed the arbitration agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CA procedural law (§ 1281.98) applies to the agreement | Section 1281.98 entitles withdrawal since fees were late | FAA (substantive and procedural) solely governs per agreement | FAA procedural law applies; § 1281.98 inapplicable |
| Whether selection of AAA rules alters governing law | Adoption of AAA rules means CAA procedures also apply | Adopting AAA rules doesn’t displace FAA governing procedures | AAA rules do not override clear adoption of FAA procedural law |
| Whether MAP specifically superseded the older 2017 agreement | 2017 agreement not "explicitly superseded," still relevant | 2020 MAP governed "any existing and all future disputes" | 2020 MAP and Agreement govern; old agreement inapplicable |
| Whether the trial court erred in sanctions and withdrawal order | Sanctions justified by late fees under § 1281.98 | Not justified; § 1281.98 inapplicable due to governing FAA | Reversed; trial court order and sanctions vacated |
Key Cases Cited
- Rodriguez v. American Technologies, Inc., 136 Cal.App.4th 1110 (Cal. Ct. App. 2006) (contract language governs whether FAA or CAA procedural rules apply)
- Cronus Investments, Inc. v. Concierge Services, 35 Cal.4th 376 (Cal. 2005) (choice-of-law provisions in arbitration agreements are interpreted by express contract language)
- Valencia v. Smyth, 185 Cal.App.4th 153 (Cal. Ct. App. 2010) (FAA procedural rules apply when expressly incorporated; otherwise, CAA applies by default)
- Espinoza v. Superior Court, 83 Cal.App.5th 761 (Cal. Ct. App. 2022) (if an agreement is silent, CAA procedures apply in state court)