LOS ANGELES – A state appeals court on Wednesday agreed to overturn a lower court ruling and dismiss a purported class action suit against Kinecta FCU by a former branch manager, who claimed the credit union violated California wage laws by failing to pay overtime to branch managers and failed to provide them with rest and meal periods.
In its ruling, the Court of Appeals of California for the Second District, said as part of her employment for the Manhattan Beach credit union Kim Malone had signed an arbitration clause that bound her to “utilize binding arbitration to resolve all disputes that may arise out of the employment context.”
The former branch manager had sought to certify her complaint as a class action on behalf of all Kinecta branch managers and former branch managers and insisted the binding arbitration clause did not cover class actions.
A lower state court had denied Kinecta’s motion to dismiss the case but ordered the parties to arbitrate their dispute as required in their pre-employment agreement. “By granting Kinecta’s motion to compel arbitration and denying its motion to dismiss class allegations from Malone’s complaint, the trial court imposed class arbitration, even though the arbitration provision was silent on the issue of class arbitration and limited the arbitration to disputes between Malone and Kinecta,” ruled the appeals court.
The ruling effectively dismisses the class claims and will require arbitration to resolve the dispute between the credit union and its former branch manager.
