A former Bingham McCutchen associate who says the firm refused to accommodate her sleep disorder can sue the firm in superior court, California’s Second District Court of Appeal ruled Friday.
Boston-based Bingham cannot compel arbitration because its employment arbitration agreement includes a Massachusetts choice-of-law provision, but doesn’t meet Massachusetts procedures for waiving statutory rights.
"Defendants were the drafters of a document which required a California employee to be bound by substantive Massachusetts law," wrote Ventura County Judge Vincent O’Neill Jr., sitting by designation. "Any ambiguity is to be construed against defendants’ interest."
The litigation dates to 2011, when Hartwell Harris brought a raft of claims against Bingham — wrongful termination, FEHA violations, unfair business practices and defamation — after working at the firm for 3 1/2 years. She accused Bingham of failing to accommodate her sleep disorder, specifically, delayed sleep-phase syndrome, which causes people to fall asleep later and wake up later than others.
Bingham moved to compel arbitration, noting that when Harris joined the firm in 2007, she signed an agreement to arbitrate "any legal disputes which may occur between you and the firm" related to employment. The agreement also was to be "construed in accordance with the internal substantive laws of The Commonwealth of Massachusetts."
In 2009 the Massachusetts Supreme Court in Warfield v. Beth Israel Deaconess Medical Center refused to compel arbitration of a sex discrimination claim because the employment agreement failed to spell out "in clear and unmistakable terms" that the employee was waiving statutory rights.
Before the Second District, Bingham argued that Harris is seeking to vindicate California statutory rights that should be governed by California law.
"That may or may not be true as Harris’s lawsuit progresses in the superior court," O’Neill wrote for a unanimous panel, but "the issue at hand is whether Harris has properly resorted to the superior court in the first place."
Bingham argued in the alternative that the U.S. Supreme Court’s 2011 decision in AT&T Mobility v. Concepcion, which forbids states from adopting special rules that disfavor arbitration, superseded Warfield.
But, O’Neill wrote, the Warfield decision applies to contracts generally, and it leaves parties free to arbitrate statutory claims so long as they’ve agreed to do so with specificity. He compared the specificity requirement to rules requiring class action waivers to be written in highlighted text, something the Concepcion opinion expressly approved.
"This language suggests the Supreme Court would approve of the requirement at issue here," O’Neill wrote.
Justices Orville Armstrong and Sandy Kriegler concurred.
Harris’ lawyer, Tamara Freeze of Southern California, crowed in a press release Friday that the decision "shows that even a big and experienced law firm, like Bingham McCutchen, is not immune from drafting errors in its own arbitration contract."
Bingham administrative partner Debra Fischer pointed out that the rule announced in Warfield wasn’t in effect when Harris signed her employment agreement in 2007. The firm has since updated its agreement for new employees, but it chose not to ask all existing employees to sign new agreements. "It’s not a drafting error," she said.