California Court Finds Arbitration Agreement Invalid in Workplace Injury Case

Earlier this month, a state appellate court issued a written opinion in a California work injury case involving the enforceability of an arbitration agreement that was signed by the plaintiff’s employer and the defendant, but not the plaintiff. Ultimately, the court concluded that while the accident would otherwise have fallen under the arbitration agreement, since the plaintiff was not a party to the contract, he could not be forced to submit his claim to arbitration and was entitled to use the court system.

ContractThe Facts of the Case

The plaintiff was injured in a car accident when a tire on the U-Haul truck that his employer had rented blew out. The employer had rented the truck and instructed the plaintiff to deliver massage chairs to the state fairgrounds. This was the first time the plaintiff, who was normally a warehouse worker, was asked to deliver merchandise.

Prior to taking possession of the truck, the plaintiff’s employer signed the U-Haul rental agreement, which contained an agreement to arbitrate any claims arising from the use of the truck. The rental agreement specified that it applied to “agents and employees” of the party signing the contract.

After the accident, the plaintiff filed a personal injury lawsuit against U-Haul, claiming that it was negligent in the maintenance of the truck. In its defense, U-Haul argued that the plaintiff did not have the right to bring the claims in the court system because he was bound under the arbitration clause. The lower court rejected U-Haul’s position, and the company appealed.

On Appeal, the Case Is Affirmed

On appeal, U-Haul acknowledged that the plaintiff did not sign the rental agreement, but it argued that he should be bound by the agreement nonetheless. The court began its analysis by stating that courts prefer to enforce arbitration agreements when they are valid and that the agreement at issue appeared to be valid. However, the court continued on to state that, before someone con be forced to arbitrate a claim, they must have agreed to do so, or there must be some other reason for finding the non-signing person is bound by the agreement.

Here, the court determined that the plaintiff was not bound by the agreement. First, the court noted the obvious, that the plaintiff did not sign the agreement. However, the court then went on to discuss situations in which a party may be bound by the terms of a contract they never signed. For example, if a party is an intended third-party beneficiary of a contract, they may be bound by the terms contained in the contract. Similarly, if a party is acting as an agent of the signing party, the non-signing party may then be bound by the terms of the contract. However, here, the court determined that none of the exceptions applied, and the arbitration agreement could not be enforced against the plaintiff.

Have You Been Injured in a California Accident?

If you or a loved one has recently been injured in any kind of California traffic accident, you may be entitled to monetary compensation. The dedicated Southern California personal injury attorneys at Sharifi Firm have extensive experience representing injured Californians in a wide range of personal injury matters, including those involving arbitration agreements. Call 866-422-7222 to schedule a free consultation with an attorney today.

More Blog Posts:

Charter Bus Full of Employees Crashes on the Way to Holiday Party, Southern California Injury Lawyer Blog, December 12, 2017

California Court Discusses the Scope of Church’s Duty to Parishioner in Recent Premises Liability Case, Southern California Injury Lawyer Blog, November 27, 2017

Contact Information