Pulli v. Pony International, LLC
143 Cal. Rptr. 3d 38
Cal. Ct. App.2012Background
- Pulli sued Pony and related entities for fraud, wrongful termination, and related claims after accepting a 2007 offer to join Pony and relocate.
- April 26, 2007 Offer Letter purportedly memorialized promises including a 0.75% equity stake and salary equal to his adidas pay.
- October 30, 2007 Agreement introduced an arbitration provision and conditioned ongoing employment on signing, with allegedly coercive threats to withhold wages/equity.
- Pony moved to compel arbitration; Pulli opposed on grounds that the October 2007 Agreement, and its arbitration clause, were void under Labor Code section 206.5.
- Trial court denied the motion, concluding the October 2007 Agreement was void under 206.5, rendering the arbitration provision unenforceable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of arbitration right on 206.5 issue | Pulli | Pony | Pony waived rights to arbitrate the 206.5 issue |
| Arbitration provision enforceability under 206.5 | Pulli | Pony | Arbitration provision not unenforceable under 206.5 |
Key Cases Cited
- St. Agnes Medical Center v. PacifiCare of California, 31 Cal.4th 1187 (Cal. 2003) (waiver and arbitration standards in arbitration context)
- Doers v. Golden Gate Bridge etc. Dist., 23 Cal.3d 180 (Cal. 1979) (judicial litigation of arbitrable issues may waive arbitration right)
- Doe v. Brown, 177 Cal.App.4th 408 (Cal. App. 2009) (statutory interpretation principles for 206.5 context)
- Chindarah v. Pick Up Stix, Inc., 171 Cal.App.4th 796 (Cal. App. 2009) (purpose and history of 206.5)
- Watkins v. Wachovia Corp., 172 Cal.App.4th 1576 (Cal. App. 2009) (section 206.5 relation to wage disputes; coercion analysis)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (U.S. 2006) (arbitration clause severability in contract)
- Perry v. Thomas, 482 U.S. 483 (U.S. 1987) (federal preemption of wage dispute arbitration)