State of Cal. v. Alco Harvest, 97 Cal.App.5th 456

Guzman, a Mexican national, was recruited under the H‑2A temporary agricultural program and worked for Alco Harvesting at Betteravia farms for two seasons.
Under H‑2A rules an employer must submit a Job Order (Form ETA‑790/790A) to DOL describing the "material terms and conditions" of the offered employment; the Job Order is posted to State Workforce Agency clearance systems.
At orientation in Mexico, Guzman signed a written arbitration agreement requiring individual arbitration, waiving jury trial and class/collective actions.
Alco did not disclose any mandatory arbitration requirement in the Job Orders or H‑2A application submitted to DOL. The trial court concluded arbitration was a material term that must have been disclosed and therefore denied Alco’s motion to compel arbitration and denied a stay of the Labor Commissioner’s action.
The Court of Appeal affirmed, holding the arbitration requirement was a material term and was not disclosed in H‑2A certification, rendering the agreement unenforceable.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether mandatory arbitration is a "material term or condition" of H‑2A employment	Guzman: Requiring arbitration (waiver of jury and class claims) is a substantial right and thus a material term	Alco: Arbitration is a standard employment condition and not necessarily a material term that must be disclosed; FAA governs enforcement	Held: Yes. The waiver of judicial forum and class participation are material terms.
Whether Alco disclosed the arbitration requirement in its H‑2A submissions to DOL	Guzman: Alco did not list arbitration in the Job Orders or Application, violating DOL regulations and making the agreement unenforceable	Alco: Even if not in the Job Order, the arbitration agreement is enforceable under the Federal Arbitration Act; Elkhorn supports enforcement absent job‑order disclosure	Held: No. Alco did not disclose mandatory arbitration in its H‑2A submissions; the nondisclosure bars enforcement of the post‑arrival arbitration agreement.
Whether the Labor Commissioner’s enforcement action should be stayed or Guzman’s non‑individual claims stayed/dismissed pending arbitration	Labor Commissioner/Guzman: Opposed stay; enforcement should proceed	Alco: Sought stay/dismissal pending arbitration	Held: Trial court’s denial of stay affirmed; requests are moot in light of the arbitration ruling and appellate disposition.

Martinez‑Gonzalez v. Elkhorn Packing Co., 25 F.4th 613 (9th Cir. 2022) (Ninth Circuit compelled arbitration but addressed undue influence/duress, not H‑2A disclosure requirement)
Sheppard, Mullin, Richter & Hampton, LLP v. J‑M Mfg. Co., Inc., 6 Cal.5th 59 (Cal. 2018) (contracts contrary to express law or policy are unenforceable)
Mendez v. Mid‑Wilshire Health Care Ctr., 220 Cal.App.4th 534 (Cal. Ct. App. 2013) (standard for appellate review of legal questions underlying arbitration denials)
Lawrence v. Walzer & Gabrielson, 207 Cal.App.3d 1501 (Cal. Ct. App. 1989) (arbitration waiver implicates substantial rights and is not lightly inferred)
Main v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 67 Cal.App.3d 19 (Cal. Ct. App. 1977) (forum‑selection/arbitration waiver as substantial right)
American Fed. of Labor v. Unemp. Ins. Appeals Bd., 13 Cal.4th 1017 (Cal. 1996) (courts are not authority for propositions not considered)
B.B. v. County of Los Angeles, 10 Cal.5th 1 (Cal. 2020) (same point regarding stare decisis and scope of holdings)