California court rules arbitration right waived due to delay in petition

Desert Regional Medical Center, Inc. (DRMC) waived its contractual right, if any, to arbitrate the individual claims of three registered nurses due to its delay in filing a petition to compel arbitration, the California Court of Appeal recently said.

DRMC, which owned and operated an acute care hospital, hired the three nurses under a collective bargaining agreement (CBA) between DRMC and the California Nurses Association.

An article of the CBA stated that individual nurses and DRMC could voluntarily agree to arbitrate disputes not otherwise arbitrable under the CBA under the fair treatment process (FTP), which provided dispute resolution procedures for employment-related disputes.

The nurses also signed an employment arbitration agreement, where they agreed to submit non-CBA covered disputes to final and binding arbitration before the American Arbitration Association.

The case of Desert Regional Medical Center, Inc. v. Miller arose when the three nurses filed labor claims alleging rest and meal break violations by DRMC. DRMC filed petitions to compel arbitration of the labor claims and requested a stay. The trial court denied DRMC’s petitions and request.

DRMC appealed. It made the following arguments:

• The trial court should have stayed the individual claims until after the completion of the arbitration of a separate proceeding that the union initiated on behalf of all nurses that DRMC employed in California
• The arbitrator, not the trial court, should determine the issue of waiver
• Even if the trial court had the jurisdiction to decide the question of waiver, there was insufficient evidence to support the finding of waiver

The California Court of Appeal for the Fourth District, Second Division affirmed the trial court’s order denying DRMC’s petitions to compel arbitration and request for a stay.

First, the appellate court ruled that the trial court had the jurisdiction to determine whether waiver was an issue for the court or for the arbitrator, regardless of whether federal or state law was applicable in deciding that issue.

Second, the Court of Appeal held that the three nurses were not required to arbitrate their individual claims against DRMC under the CBA, the employment arbitration agreement, and the FTP.

DRMC’s conduct was inconsistent with an intent to arbitrate the nurses’ individual claims, the appellate court said. Even assuming that DRMC met its burden to show an applicable written contract requiring arbitration of individual claims, it waived any such right by delaying filing the petitions to compel arbitration for a period of time that was substantial and prejudicial to the nurses, the court added.