Jenks v. DLA Piper Rudnick Gray Cary US LLP
196 Cal. Rptr. 3d 237
Cal. Ct. App.2015Background
- Jenks was hired by Gray Cary in 2000 under an Offer Letter that required arbitration of any employment-related disputes.
- Gray Cary merged into DLA Piper on January 1, 2005; Jenks signed a Termination Agreement with DLA Piper in February 2006 that continued benefits through August 2006 and included an integration clause limited to the termination subject matter, but said nothing about dispute resolution.
- Jenks sued DLA Piper (and initially Standard Insurance) in 2009 alleging underpayment of short-term disability (STD) benefits and related tort and contract claims; DLA Piper moved to compel arbitration based on the 2000 Offer Letter.
- The trial court compelled arbitration; an arbitrator found DLA Piper breached the Termination Agreement and awarded Jenks damages (contract, emotional distress, costs).
- DLA Piper petitioned to confirm the award in state court; the trial court confirmed the award, denied Jenks’s new-trial motion, and entered judgment. Jenks appealed the confirmation/denial, arguing primarily that DLA Piper (a nonsignatory successor) could not enforce arbitration and that the Termination Agreement or Wraparound Plan superseded arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DLA Piper (a nonsignatory) could enforce the arbitration clause | Jenks: DLA Piper is not a signatory and thus lacks standing to compel arbitration | DLA Piper: As successor by merger to Gray Cary, it acquired Gray Cary’s contractual rights and can enforce the arbitration clause | Forfeited by Jenks below; on the merits, court affirmed DLA Piper had standing as successor and under equitable principles (Marenco) |
| Whether the merger/ succession transferred arbitration rights | Jenks: Successor cannot unilaterally bind employees to pre-merger contractual terms without express assignment or new agreement | DLA Piper: Merger law (MD & CA) makes the surviving partnership successor to rights, assets, debts, and liabilities, including contract rights | Court held successor acquired the right to enforce the arbitration agreement under merger statutes and Marenco precedent |
| Whether the 2006 Termination Agreement superseded or novated the Offer Letter arbitration clause | Jenks: Termination Agreement’s integration clause ("entire agreement") supersedes prior agreements, extinguishing arbitration | DLA Piper: The integration clause is limited to the subject matter of termination and the Termination Agreement is silent on dispute forum, so it does not override the Offer Letter arbitration provision | Court held the Termination Agreement did not supersede the Offer Letter arbitration clause (Cione and related authority) |
| Whether the later Wraparound Plan or ERISA materials precluded arbitration of STD claims | Jenks: The Wraparound Plan (published after employment ended) contemplates litigation in federal/state court for ERISA claims and thus removes arbitration | DLA Piper: The Plan postdates employment termination and is not an employment contract; references to court forum relate to ERISA claims and do not negate arbitration | Court held the Wraparound Plan did not supersede arbitration; ERISA claims were properly submitted to arbitration where Jenks had consented to arbitrate |
Key Cases Cited
- Abramson v. Juniper Networks, Inc., 115 Cal.App.4th 638 (appellate review of compelled arbitration and related procedures)
- Pinnacle Museum Tower Assn. v. Pinnacle Market Devel. (US), LLC, 55 Cal.4th 223 (standard burdens for proving existence/enforceability of arbitration agreements)
- Marenco v. DirecTV LLC, 233 Cal.App.4th 1409 (successor corporation may enforce predecessor’s arbitration clause where employment continued after merger)
- DMS Servs., LLC v. Superior Court, 205 Cal.App.4th 1346 (review of nonsignatory enforcement doctrines and identity-of-interest theories)
- Cione v. Foresters Equity Servs., Inc., 58 Cal.App.4th 625 (subsequent integrated agreement silent on forum does not necessarily supersede preexisting arbitration agreement)
- Suh v. Superior Court, 181 Cal.App.4th 1504 (enumerating theories by which nonsignatories may be bound to arbitrate)
- Boucher v. Alliance Title Co., Inc., 127 Cal.App.4th 262 (equitable estoppel: claims ‘‘intimately founded in and intertwined’’ with contract allow nonsignatory to invoke arbitration)
- Grey v. American Management Servs., 204 Cal.App.4th 803 (distinguishable: later integrated agreement found to supersede prior arbitration where agreement language and timing showed intent)