Overview

HOLDINGS: [1]-A hospital’s receipt of Medicare payments created jurisdiction under Federal Arbitration Act § 2 (9 U.S.C. § 2) regarding an employee’s claim that the hospital’s payroll system had rounded hours inaccurately, and there were other transactions involving interstate commerce; [2]-Because there was no inconsistency between the collective bargaining agreement and the employee’s individual agreement, neither of which said anything about the electronic payroll system or any rounding of hours worked, an arbitration provision in the employee’s individual agreement was not preempted under Labor Management Relations Act § 301(a) (29 U.S.C. § 185(a)) and was enforceable; [3]-The employee agreed to arbitrate statutory claims; [4]-A contractual exclusion from arbitration for employees subject to a collective bargaining agreement was inapplicable because the employee agreed otherwise. Parties’ litigation lawyer appeal.

Outcome

Reversed in part and remanded.

Procedural Posture

The Superior Court of San Francisco County (California) entered judgment against defendant mail order company, finding that it had engaged in a deceptive business practice by charging its customers an “insurance fee” with every order placed. The trial court also entered an order awarding plaintiff customer litigation expenses and attorney fees. The company appealed.

The trial court’s ruling presumed that the company, rather than its customers, bore the loss of risk in transit, so that the customers received nothing of value in return for paying the fee. In reversing, the court held that the company did not bear the risk of loss of goods in transit under Cal. Com. Code §§ 2509, 2401, 2320, and 2326. Nothing in the company’s conduct suggested it was offering anything other than a standard, C.I.F.-type shipment contract, which the customers agreed to when they used the company’s mail order form to purchase goods. For a purchase in which the buyer paid for the goods before shipment to be a sale on approval there had to be some provision or objective fact demonstrating an intent that, notwithstanding that the buyer had paid for the goods, they did not “belong” to the buyer until the buyer approved them. That the company permitted a customer to return goods for a refund was a benefit to the customer, but did not in and of itself suggest that the parties intended the seller to retain an interest in the goods until some time after they were delivered to the customer, and did not convert a routine sale with a right to return into a sale on approval.