Judge Rejects Case Challenging Arbitration

A Los Angeles Superior Court judge has tossed out a test case challenging employment contracts that force workers to arbitrate labor disputes instead of going to court.

The case involved a Long Beach legal secretary who claimed he was fired from two separate law firms after he refused to sign employment agreements that required arbitration of labor disputes.

Donald Lagatree of Long Beach said the agreements would have forced him to take disputes to a panel of private arbitrators--not a judge and jury. Employees are generally better off taking their disputes to court, where they can secure higher damage awards.

The American Civil Liberties Union, which is representing Lagatree, filed separate suits against the law firms, saying that employees cannot be forced to give up their constitutional rights in order to get a job.

Superior Court Judge Wendell Mortimer Jr. disagreed this week. When he tossed out one of Lagatree’s suits, Mortimer declared that state policy favors arbitration.

Another Los Angeles judge will act next month on a request to dismiss Lagatree’s remaining suit.

The legal battles seem far from over, attorneys say.

David Schwartz, an ACLU attorney representing Lagatree, said the civil rights group will most likely appeal Mortimer’s ruling to a state appeals court in Los Angeles and, if necessary, the California Supreme Court.

Arbitration clauses are becoming a standard part of employment agreements. Many employers prefer arbitration because it is cheaper, and it guarantees speedier resolution.

And unlike juries, arbitrators are less likely to hit employers with hefty punitive damage awards, said Tim J. Harris, a Century City lawyer who represents employers in labor disputes.

Lagatree’s suits, Harris and other attorneys say, highlight the widespread use of arbitration clauses by American businesses. Banks, brokerages and hospitals are among the entities requiring consumers to forfeit their day in court.

Lagatree said the first time he refused to surrender his legal rights was in June 1997. His bosses at Keesal, Young & Logan, a Long Beach law firm, had asked him to sign a binding arbitration agreement that would take labor disputes to a panel of three retired judges.

When he refused, he received a pink slip, Lagatree said.

Four months later, Lagatree suffered the same fate when he rejected the arbitration agreement handed to him by partners at Luce, Forward, Hamilton & Scripps, a firm based in San Diego. He had been on the job a mere three days.

Robert Buell, Luce’s managing partner, said it was the firm’s policy “not to continue employment if he didn’t sign.”

“He made the choice,” Buell said Friday.