Timely Arbitration Request Required by Employer in Multiple Forums

Desert Regional Medical Center (DMRC) is an acute care hospital owned and operated by a subsidiary corporation of Tenet Healthcare Corporation. DRMC provides healthcare services and is engaged in interstate commerce within the meaning of the Federal Arbitration ACT (FAA). Nurses Leah Miller, Lynn Fontana, and Renita Romero have been employed by them pursuant to a collective bargaining agreement (CBA) negotiated between DRMC and the Union.

Article 11 of the CBA includes provisions governing RN rest breaks, meal periods, and payment of missed break premiums. Article 9 of the CBA sets forth mandatory grievance and arbitration procedures which must be followed when processing disputes involving interpretation or application of the CBA. Article 9E of the CBA states that individual RNs and DRMC may voluntarily agree to arbitrate “any dispute not otherwise arbitrable under the [CBA]” under the Tenet Fair Treatment Process (FTP), which provides dispute resolution procedures for employment related disputes.

Each of them signed a DRMC employment document, entitled “Acknowledgement,” which referred to an Employment Arbitration Agreement. Under the agreement, they agreed to submit non-CBA covered claims or disputes to final and binding arbitration before the American Arbitration Association (AAA).

In March 2015, the Union filed with DRMC, on behalf of DRMC’s RNs, a meal and rest break grievance. The Union group grievance alleges that DRMC was committing ongoing violations of the CBA and California state law. It was not resolved, so In May 2015, the Union sent DRMC a letter requesting arbitration of the unresolved meal and rest period grievance under the CBA.

The DRMC RNs in this case each filed their own claims with the Labor Commissioner, alleging violations of Labor Code sections 203, 226.7, and 517, and Wage Order 5.In February 2019, DRMC filed with the Labor Commissioner a brief entitled “Defendant’s Jurisdictional Objections,” arguing that the Labor Commissioner lacked jurisdiction to hear and decide Respondents’ individual claims because they had to be resolved in another forum.

However, in February and March 2019, the Labor Commissioner heard under Labor Code section 98, Respondents’ individual claims. During the hearing, which lasted several days, the hearing officer heard testimony and the parties presented documentary evidence and arguments. After submission, DRMC was ordered to pay Miller $64,120.64; Romero $58,835.87; and Fontana $51,156.97 for unpaid wages and interest.

On August 7, 2019, DRMC filed in the Riverside County Superior Court a notice of filing a de novo appeal of the Labor Commissioner’s order awarding unpaid wages. On August 26, 2019, DRMC filed notices of removal of DRMC’s action appealing the Labor Commissioner’s Order, to the federal district court, which later remanded the case back to state court. On July 23 and 24, 2020, DRMC filed petitions to compel arbitration of Respondents’ individual claims and stay the trial court action. At that point there were difficulties in proceeding due to the pandemic.

On August 12, 2020 the Union and Tenet, on behalf of DRMC, had agreed to arbitrate the Union group grievance regarding “Missed Meals-Time Sheets,” and appoint Michael Prihar as arbitrator.

The trial court denied DRMC’s petitions to compel arbitration on the individual nurses actions based on a finding DRMC waived the right to arbitrate. The Court of Appeal affirmed the order denying DRMC’s amended petitions to compel arbitration and request for a stay in the unpublished case of Desert Regional Medical Center v. Miller et. al – E076058 (December 2022.

The principal question on appeal is whether DRMC waived its contractual right, if any, to arbitrate the nurses individual claims.

The Court of Appeal concluded that, even assuming DRMC met its burden of establishing there was an applicable written contract requiring arbitration of Respondents’ individual claims, DRMC waived any such right by delaying filing the Petition to compel arbitration until July 23 and 24, 2020.

There is no single test under state or federal law that delineates the nature of the conduct that will constitute a waiver of arbitration. In the past, California courts have found a waiver of the right to demand arbitration in a variety of contexts, ranging from situations in which the party seeking to compel arbitration has previously taken steps inconsistent with an intent to invoke arbitration, to instances in which the petitioning party has unreasonably delayed in undertaking the procedure.

Here, DRMC did not timely raise its right to arbitrate Respondents’ individual claims or take affirmative steps to implement the process. DRMC delayed filing its Petition to compel arbitration for over four years, which included at least three years from when Respondents submitted their individual claims against DRMC with the Labor Commissioner, until the Labor Commissioner decided the claims in July 2019.

In August 2019, DRMC attempted to remove to federal court its state court action appealing the Labor Commissioner’s decision without success.

DRMC invoked the litigation machinery, including filing a de novo appeal of the Labor Commissioner’s decision in state court, and DRMC delayed petitioning to compel arbitration for a substantial period of time, which was prejudicial to Respondents. The trial court therefore did not err in ruling that DRMC waived any right DRMC may have had to arbitrate Respondents’ individual claims.

Timely Arbitration Request Required by Employer in Multiple Forums

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