After a two-day bench trial in front of the Hon. Edward Chen, CRLA Salinas attorneys Ana Vicente and Josephine Weinberg, together with co-counsel Karla Gilbridge and Rodolfo Padilla of Public Justice, successfully challenged an arbitration agreement against Elkhorn Packing, a large H-2A agricultural employer in the Salinas area.
This decision is a victory for all workers, especially low-wage immigrant workers. It makes clear that taking advantage of H-2A workers' vulnerabilities is unacceptable and that the manner in which an arbitration agreement is presented to and signed by an employee matters with respect to whether the agreement is valid and enforceable.
Background
Our brave client wanted to sue his former employer in federal court for unpaid wages, missed meal and rest breaks, reimbursement of business expenses, negligence, and invasion of privacy. Elkhorn Packing moved to compel arbitration and try to force him out of federal court and into arbitration.
CRLA and Public Justice attorneys opposed the motion to compel, informing the court that the arbitration agreement was invalid because our client signed the agreement under economic duress and undue influence.
The agreement wasn't presented to H2A workers until after they had traveled to the U.S. (on their own dime), they had to sign the agreement after a full day's work and were given no time to read it, had to sign it while standing in a line in their hotel parking lot, were told the documents they were signing were for their "Social Security", and were also told they had to follow all of Elkhorn Packing's rules, including signing all documents presented to them, because otherwise they would be sent back to Mexico and of course lose their livelihood.
The Decision
CRLA and Public Justice attorneys opposed the motion to compel, informing the court that the arbitration agreement was invalid because our client signed the agreement under economic duress and undue influence.
In an extraordinary decision, Judge Chen agreed the arbitration agreement was invalid because our client signed it under economic duress and undue influence.
The most remarkable thing about the decision is that Judge Chen recognized that our client and we would argue, all H2A workers, was forced to sign the agreement under the threat of economic duress, highlighting the fact that many low-wage workers are coerced into signing arbitration agreements out of a threat of not being able to feed or house their families. Judge Chen wrote:
“Thus, the evidence presented by both sides indicates that Plaintiff was in a very challenging financial situation with very few financial resources available to him in Mexico. With significant financial obligations animating his thinking, no reasonable worker in [our client’s] shoes—without alternative employment prospects, an alternative place to live should he lose his job, and no practical way to return to Mexico—could have refused to sign the Arbitration Agreements that were presented to him without any representation by Elkhorn that signing the Arbitration Agreement was optional.
The fact that out of thousands of workers, no other Elkhorn worker had ever refused to sign the Arbitration Agreement corroborates this point.
Here, Elkhorn’s decision to present the Arbitration Agreement for signature only after [our client] was in California and living in Elkhorn-provided housing, and only after the work of picking lettuce had already begun, after admonishing him and other workers to follow the rules or risk being sent back to Mexico, and with awareness of the extremely difficult financial circumstances in which [our client] lived, placed him in a situation in which it would have, as a practical matter, been impossible for him to refuse to sign the Arbitration Agreement.
Attorney Ana Vicente shared that both she and the client cried while reading Judge Chen’s decision. This is the epitome of why CRLA does the work it does—to give marginalized communities the voice and dignity they’ve been denied.
Congratulations again to attorneys Ana Vicente and Josephine Weinberg of CRLA, Karla Gilbridge and Rodolfo Padilla of Public Justice, and, most especially, our brave client.