SAN FRANCISCO – California's 1st District Court of Appeal recently ordered that lawsuit involving an attorney who alleges that she was denied advancement and work opportunities be sent back to San Francisco County Superior Court for review.
In its ruling filed Nov. 2, the appeals court reversed the superior court's decision that Constance Ramos' claim against law firm Winston & Strawn be submitted to arbitration. The appeals court ruling said in part that Ramos' claim that she was not subject to arbitration because she was not a partner with the law firm was valid enough an argument to be reviewed again by the superior court.
The appeals court ruling said, "Under the framework set forth by our Supreme Court in Armendariz, we find the parties’ arbitration agreement is unconscionable. Further, because we cannot remove the taint of illegality by severing the unlawful provisions without altering the nature of the parties’ agreement, we must void the entire agreement to arbitrate."
Ramos claimed that she was wrongfully terminated and the trial court's ruling that arbitration should be submitted was erroneous.
Ramos was hired in 2014 as an “income partner” for Winston. She claims that she was excluded from opportunities to advance her career and denied compensation and bonuses in comparison to her male counterparts. Ramos alleged in her complaint that she was told by her office manager in January 2016 that Winston wanted her to leave the company. A short time later, she alleges, "the firm's managing partner told her if she did not file a withdrawal letter by March 5, the compensation committee would substantially reduce her salary." According to the filing, Ramos' salary was cut by 33 percent by the compensation committee. Her salary was cut once more in early 2017 – down to 56 percent of her original compensation with the firm. In July 2017, she submitted her letter of resignation. The same month, Ramos filed a complaint of discrimination with the California Department of Fair Employment and Housing and received a right-to-sue letter.
However the law firm said Ramos had signed the firm's partnership agreement which included an arbitration clause when she was hired. According to the agreement, "a dispute or controversy of a partner or partners arising under or related to this agreement ... or the partnership, shall be resolved first by mandatory, but non-binding, mediation. ... If such dispute is not resolved within 60 days after referral to the selected mediator, either party may submit the dispute to binding arbitration before a panel of three arbitrators for resolution under the Commercial Arbitration Rules of the American Arbitration Association.”
Based on the arbitration clause, Winston moved to compel arbitration pursuant to the partnership agreement. But Ramos argued that she was an employee not a partner and therefore the arbitration agreement did not apply. However, the trial court found Ramos to be “in a partnership relationship,” according to the court filing.
The appeals court reversed that decision and remanded the case back to the lower court for review.