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When I see the 9th Circuit split 2 to 1 on whether an arbitration agreement is enforceable, that catches my attention. Martinez-Gonzalez v. Elkhorn Packing (9th Cir 11/03/2021) [PDF].

A farm laborer signed an arbitration agreement, then he quit his job, and then he filed a lawsuit claiming wage violations.

The trial court found that the arbitration agreement was unenforceable. Two reasons. One: economic duress. Two: undue influence.

Now this is a question of contract formation — forming the arbitration contract — and that's a question of California state law.

The 9th Circuit pointed out that this guy had just traveled up from Mexico, and he was dependent on the employer for his housing, and he'd already started working. And then the employer gathered 150 of these workers in a hotel parking lot, gave them an orientation, lined them up and said sign these documents.

All of that did not show that the employer committed a “wrongful act.” A wrongful act is required in order to upset that agreement.

And this guy had alternatives. He could have asked if he needed to sign. And nobody told him that he would be fired if he didn't sign. So, there's no economic duress.

As far as undue influence goes, this guy was not what we would call a vulnerable person. He had an education. He'd worked all his life. He was experienced. And the employer did not exert any excessive pressure on him.

The dissent is pointing out that the other two judges are completely disregarding the extensive fact-finding that was made by the trial court. They just ran roughshod over all those fact-findings.

But 2 is greater than 1. So this case is going to go to arbitration.