Court Sides with ILG Legal in Ruling Against Samsung's Attempt to Sidestep Public Litigation, Ruling Highlighted in the Daily Journal

Arbitration agreements have found their way into the vast majority of employment contracts at high-profile companies, making arbitration a political hot topic. Although state and federal law are still pro-arbitration, ILG Legal Office’s current case involving Samsung Research America Inc. and Andrew Mo in Santa Clara County has shined a spotlight on how employees can still defeat such agreements to keep a dispute in a public courtroom. In this article, we’ll take a closer look at a recent court decision in the case and explore its implications for both employees and employers.

BACKGROUND OF THE CASE
Andrew Mo, a former employee of Samsung Research America Inc., filed a lawsuit against the company for discrimination, wrongful termination, and retaliation. Mo had left his senior position at Google to join Samsung as a senior director and principal engineer. During the hiring process, Mo asked for the arbitration clauses to be modified or removed from his employment contracts. Samsung insisted they were non-negotiable.

Mo later reported instances of racial discrimination within the company, specifically by Samsung Research America’s vice president. Around a month later, Mo was terminated with the stated reason of “role elimination.” Mo initiated the lawsuit, and Samsung sought to compel arbitration based on the clauses in Mo’s employment contract.

THE COURT’S DECISION
The court, presided over by Judge Evette D. Pennypacker, denied Samsung’s motion to compel arbitration. The judge found the arbitration agreement “unconscionably one-sided” and thus unenforceable. A significant point in the court’s decision was that the agreement allowed Samsung to obtain injunctive relief against Mo for a breach of the company’s confidentiality agreement without needing to prove actual damages. In contrast, if Mo was to seek relief for claims he had against Samsung, he would be forced into private arbitration.

In a Daily Journal article that reported on the pivotal ruling, Stephen N. Ilg, of ILG Legal Office PC, who represents Mo in the case, praised the court for carefully scrutinizing unfair arbitration agreements forced on workers like Andrew Mo. Ilg emphasized that the ruling demonstrated that courts would not simply rubber-stamp a motion to force a public lawsuit into private arbitration.

LEGAL IMPLICATIONS FOR EMPLOYEES AND EMPLOYERS

For Employees:

• Equal Footing: The court’s decision reinforces the principle that both parties in an employment relationship should be on as equal footing as possible when it comes to resolving disputes.
• Access to Judicial System: The ruling shows that clauses aiming to restrict employees’ access to the judicial system, while maintaining the employer’s ability to seek relief in court, could be deemed unenforceable.
• Negotiation Power: This case demonstrates the importance of negotiating, or at least attempting to negotiate, the terms of arbitration agreements before joining a company.

For Employers:

• Contract Scrutiny: Companies should carefully review their existing employment contracts to ensure that the arbitration clauses are fair and enforceable.
• Transparency: To minimize legal risks, employers should strive for transparency in their contracts and clearly explain all terms to prospective employees.
• Legal Preparedness: Employers need to be prepared for the possibility that courts may not enforce an arbitration clause, making them subject to potentially expensive and public litigation.

CONCLUSION
The recent Santa Clara County court ruling is a significant milestone in the ongoing debate about the fairness and enforceability of arbitration clauses in employment contracts. The ruling emphasizes the need for a balanced approach that ensures both employees and employers are treated fairly. It’s an instructive case for both employees considering their legal rights and employers reviewing their contractual obligations. For any issues involving arbitration agreements, contact an attorney at ILG Legal Office who is ready to help you.