Kindred Nursing Ctrs. Ltd. v. Clark

42 Analyses of this case by attorneys

  1. The Supreme Court and President Trump Agree -- Nursing Homes Plaintiffs May Be Required to Arbitrate

    Melito & Adolfsen P.C.Louis AdolfsenJune 21, 2017

    The Supreme Court and President Trump Agree -- Nursing Homes Plaintiffs May Be Required to Arbitrate A provision in a contract providing for care of a resident in a nursing home may require the parties to arbitrate any dispute over injuries suffered by the resident at the nursing home. In Kindred Nursing Centers Ltd. P'ship v. Clark, 137 S. Ct. 1421 (2017), the Supreme Court ended any doubts as to the enforceability of arbitration clauses in these contracts. The relevant section of the Federal Arbitration Act (FAA) provides: "A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."

  2. After Viking River Cruises, the Legislature May Attempt to Preserve the Private Attorney General Model

    Akin Gump Strauss Hauer & Feld LLPMay 25, 2022

    This provision “establishes an equal-treatment principal: A court may invalidate an arbitration agreement based on generally applicable contract defenses,” but not based on a rule “discriminating on its face against arbitration” or “disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.” Kindred Nursing Centers L.P. v. Clark, 137 S. Ct. 1421, 1426 (2017).A state law invalidating all agreements required as a condition of employment may not run afoul of this principal.

  3. Ninth Circuit Rules California Employers Can Require Arbitration Agreements

    Faegre Drinker Biddle & Reath LLPAmanda SemaanMarch 8, 2023

    agreement executed in violation of the law. See Chamber of Commerce of The United States of America v. Bonta.In holding that the FAA preempted AB 51, the Ninth Circuit highlighted, inter alia, previous legislative efforts relating to arbitration that had been struck down as preempted by the FAA, including California Governor Jerry Brown’s own veto of AB 465 in 2015 (a bill similar to AB 51). The court applied the principles of obstacle preemption, beginning with the FAA’s purpose, which – it explained – is to combat the longstanding “hostility towards arbitration” and “give preference (instead of mere equality) to arbitration provisions.” In light of that explicit purpose, the court explained that state rules that burden the formation of arbitration agreements – not just state rules affecting the enforceability of arbitration agreements – stand as an obstacle to the FAA, citing to Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 683 (1996) and Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 137 S. Ct. 1421, 1428 (2017). AB 51’s penalty-based scheme, the Ninth Circuit went on, “is intended to have a deterrent effect” by inhibiting arbitration agreements before they are formed. The court further explained AB 51 “singles out arbitration provisions as an exception” to generally applicable law, emphasizing that “California law generally allows an employer to enter into a contract with an employee that includes non-negotiable terms as a condition of employment, including requirements related to compensation, see Koehl v. Verio, Inc., 142 Cal. App. 4th 1313, 1331 (2006), and drug usage, see Ross v. RagingWire Telecomms., Inc., 42 Cal. 4th 920, 924 (2008).” The court held that, for these reasons, AB 51 violates the “equal-treatment principle” inherent in the FAA and established by the Supreme Court in Kindred Nursing, which “requires courts to place arbitration agreements on equal footing with all other contracts.” Because AB 51’s penalty-based scheme is the “type of ‘device[]’ or ‘formula’ evincing ‘hostil

  4. Ninth Circuit Allows Enforcement of Employment Arbitration Agreements in California

    LittlerFebruary 20, 2023

    ons disallowing classwide arbitration are unconscionable);Preston v. Ferrer, 552 U.S. 346, 349–50 (2008) (holding the FAA preempted a California law giving a state agency primary jurisdiction over a dispute involving the California Talent Agency Act despite the parties’ agreement to arbitrate such disputes);Perry v. Thomas, 482 U.S. 483, 484, 491 (1987) (holding the FAA preempted a statute permitting collection actions, despite a valid arbitration agreement).5Chamber of Commerce v. Bonta, No. 20-15291, pg. 8.6AB 51 also prohibits employers from implementing an arbitration agreement with an “opt out” clause, whereby an employee has an opportunity to affirmatively chose to not enter into the agreement.7FollowingViking River, individual PAGA claims can be arbitrated and “non-individual” PAGA claims of other alleged aggrieved employees are not subject to arbitration.SeeSupreme Court Permits Arbitration of Individual PAGA Claims | Littler Mendelson P.C.8Kindred NursingLtd. P’ship v. Clark, 137 S. Ct. 1421 (2017) andDoctor’s Assocs., Inc. v. Casarotto, 517 U.S. 683 (1996).

  5. Ninth Circuit Reverses Itself and Strikes Down California Law Targeting Mandatory Employment Arbitration Agreements

    Morrison & Foerster LLPDavid ZinsFebruary 17, 2023

    t companies from conditioning employment or continued employment on agreeing to arbitrate rather than litigate workplace disputes.California could attempt to revive AB 51 by asking for the full Ninth Circuit or the Supreme Court to review this decision. We will continue to track news related to the appeal and will report on further developments. Cal. Lab. Code §§432.6(a)-(b).See id. §432.6(c).See id. § 433; Cal. Gov’t Code §12953. Cal. Lab. Code §432.6(h).Chamber of Com. of the United States v. Becerra, 438 F. Supp. 3d 1078 (E.D. Cal. 2020).Ibid.Chamber of Com. of the United States v. Bonta, 13 F.4th 766 (9th Cir. 2021).Chamber of Com. of the United States v. Bonta, 45 F.4th 1113 (9th Cir. 2022).Chamber of Com. of the United States v. Bonta, No. 20-15291, 2023 WL 2013326 (9th Cir. Feb. 15, 2023).Chamber of Com. of the United States v. Bonta, No. 20-15291, 2023 WL 2013326, supra; seeDoctor’s Assocs., Inc. v. Casarotto, 517 U.S. 683 (1996) and Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 137 S. Ct. 1421 (2017).Chamber of Com. of the United States v. Bonta, No. 20-15291, 2023 WL 2013326, supra; seeSaturn Distrib. Corp. v. Williams, 905 F.2d 719, 723 (4th Cir. 1990) and Sec. Indus. Ass’n v. Connolly, 883 F.2d 1114, 1123–24 (1st Cir. 1989).Chamber of Com. of the United States v. Bonta, No. 20-15291, 2023 WL 2013326, supra.Ibid.[View source.]

  6. The End of California’s Anti-Arbitration Statute: Ninth Circuit Holds AB 51 is Preempted by the FAA

    Paul Hastings LLPChris JalianFebruary 17, 2023

    arbitration program should consider whom to cover, and how to do it. New hires can be required to enter into arbitration contracts as a condition of hire. Incumbent employees can also be covered through various types of arbitration agreements, such as so-called “quit, or you’re bound” agreements, “opt out” agreements, or agreements tied to promotion offers. Nevertheless, given that arbitration agreements are subject to challenge if not put in place carefully, employers should consult with legal counsel before proceeding.Chamber of Com. of the United States of Am. v. Bonta, No. 20-15291, __ F.4th __, 2023 WL 2013326 (9th Cir. Feb. 15, 2023). 9 U.S.C. § 1 et seq.Chamber of Com. of United States v. Becerra, 438 F. Supp. 3d 1078 (E.D. Cal. 2020).Chamber of Com. of United States v. Bonta, 13 F.4th 766, 771 (9th Cir. 2021).Chamber of Com. of United States v. Bonta, 45 F.4th 1113 (9th Cir. 2022) 2023 WL 2013326, at *4.Id. at *7 (citing Kindred Nursing Centers Ltd. P’ship v. Clark, __ U.S.__, 137 S. Ct. 1421, 1428-29 (2017); Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 683 (1996)).Id. at *8 (citing Saturn Distribution Corp. v. Williams, 905 F.2d 719, 723 (4th Cir. 1990); Sec. Indus. Ass’n v. Connolly, 883 F.2d 1114, 1123-24 (1st Cir. 1989)).See, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 336 (express class waiver).Lamps Plus, Inc. v. Varela, __ U.S. __, 139 S. Ct. 1407, 1415, 1419 (2019) (an agreement silent or ambiguous on the availability of a class action cannot be construed to allow it). The FAA’s test for interstate commerce often is easily met. For example, the Supreme Court found that the FAA applies to a contract for termite-eradication services in a single dwelling. See Allied-Bruce Terminex Cos. v. Dobson, 513 U.S. 265, 273-75 (1995). 9 U.S.C. § 1; see Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109, 119 (2001) (construing narrowly the transportation-worker exception).See Volt Info. Scis. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 470, 477-79 (1989)

  7. Ninth Circuit Holds California Mandatory Employment Arbitration Ban Is Invalid

    Epstein Becker & GreenFebruary 17, 2023

    uary 2020 preliminary injunction against AB 51, which we discussed here.Then, on August 22, 2022, the Ninth Circuit unexpectedly withdrew its September 2021 opinion, granted a panel rehearing, and re-instituted the preliminary injunction blocking the enforcement of AB 51.Nearly 18 months later, the Ninth Circuit Court issued its decision yesterday, reversing course and concluding that the FAA in fact preempts AB 51.The Court did not just look at the provision that held that signed arbitration agreements remained valid. Instead, it looked at AB 51 as a whole. It noted that the cleverly worded statute “resulted in the oddity that an employer subject to criminal prosecution for requiring an employee to enter an arbitration agreement could nevertheless enforce the agreement once it was executed.” As a result, it concluded that the statute was an obstacle to the FAA as a whole.The Ninth Circuit’s opinion relied on the Supreme Court’s decisions in Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 137 S. Ct. 1421 (2017) and Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 683 (1996), which “make it clear that state rules that burden the formation of arbitration agreements stand as an obstacle to the FAA.” The panel concluded that rationales applied by the Supreme Court in Kindred Nursing and Casarotto, which invalidated state rules burdening the formation of arbitration agreements, was equally applicable to state rules that prevent parties from entering into arbitration agreements in the first place. The Court also agreed with the First and Fourth Circuits that the FAA preempts a state rule that discriminates against arbitration by discouraging or prohibiting the formation of an arbitration agreement.The Court ultimately held that AB 51’s penalty-based scheme to impede the formation of arbitration agreements violates the “equal treatment principle” inherent in the FAA and was a ploy to antagonize arbitration that the FAA was enacted to overcome. Because the FAA’s purpose was to further Congress’s policy

  8. CA Courts Still Reluctant to Enforce Arbitration Agreements For PAGA Claims

    Kelley Drye & Warren LLPMay 27, 2022

    First, on April 28, 2022, the California Courts of Appeal decided Wing v. Chico Healthcare & Wellness Centre, LP (“Chico”), 2022 WL 1261452 (Cal. Ct. App. 2022 Apr. 28, 2022), a case in which the employer sought to test whether the PAGA-claim exception that the California Supreme Court upheld in Iskanian remains in effect following relatively recent United States Supreme Court precedent. The employer argued that the US Supreme Court’s rulings in Kindred Nursing Ltd P’ship v. Clark (“Kindred Nursing”), 137 S. Ct. 1421 (2017), and Epic Sys. Corp. v. Lewis (“Epic Systems”), 138 S. Ct. 1612 (2018), require a reexamination of Iskanian. We have previously spoken about the useful import of the Kindred Nursing and Epic Systems decisions, both of which reaffirmed the broad reach of the FAA, and the power of class action waivers when included within arbitration clauses.

  9. Ninth Circuit Restores California’s Ban on Mandatory Employment Arbitration Agreements

    Troutman PepperKristalyn LeeOctober 26, 2021

    With this caveat, the flip side of this holding is that these penalties are not preempted (and will apply to employers), where an employee does not actually sign a mandatory arbitration agreement. Thus, employers apparently are exposed to criminal and civil penalties for conditioning employment or benefits on execution of an arbitration agreement when employees do not sign the agreement, but they are not exposed to such sanctions if an employee does sign the agreement, even though the employer presented it as a mandatory condition of employment.The dissent cited two key objections to the majority opinion: (1) It conflicts with the U.S. Supreme Court’s guidance in Kindred Nursing Centers Ltd. Partnership v. Clark, 137 S.Ct. 1421 (2017) (which held that the FAA invalidates state laws that impede or burden the formation of arbitration agreements), and (2) it unnecessarily creates a circuit split with the First and Fourth circuits (which have held that workarounds and “covert efforts to block the formation of arbitration agreements are preempted by the FAA”) without strong reason to do so.Does This Mean Employers Should Comply With AB 51 Immediately?The Bonta opinion is not likely the last word about the validity of AB 51. There is ample opportunity for the U.S. Chamber of Commerce to petition for rehearing en banc or file a writ of certiorari in the Supreme Court, or both, and the U.S. Chamber of Commerce has already requested an extension of time for a possible rehearing petition, strongly signaling that a rehearing request is forthcoming.While the Ninth Circuit remanded the case to the District Court, its decision (namely, lifting the District Court’s preliminary injunction) does not become effective until the court

  10. Georgia Supreme Court Sides With Nursing Home on Arbitration Issue Briefed by AGG Attorneys

    Arnall Golden Gregory LLPJason BringSeptember 29, 2021

    Consistent with this legislative mandate, the United States Supreme Court has repeatedly affirmed arbitration as a favored method of dispute resolution and rejected any limitations upon parties’ rights to enter into arbitration agreements, including in nursing home admissions. SeeMarmet Health Care Center Inc. v. Brown, 565 U.S. 530, 531-532 (2012); Kindred Nursing Centers L.P. v. Clark, 581 U.S. –; 137 S. Ct. 1421, 1428 (2017). The Georgia Supreme Court has been faithful to these principles as well.