In a recent case in 2nd District of the California Court of Appeal, Vasquez v San Miguel Produce, Inc. (2018 DJDAR 789), the Court held that an agency or similar relationship between a nonsignatory and one of the parties to an arbitration agreement allows enforcement of arbitration by the nonsignatory. In the case, plaintiffs were employed by Employers Depot, Inc (EDI) a staffing agency. Plaintiffs signed an arbitration agreement with EDI and were assigned by EDI to pack produce for San Miguel. Plaintiffs worked at San Miguel for one to two months and then sued San Miguel for labor law violations. San Miguel cross-claimed against EDI for indemnity and both San Miguel and EDI moved to compel arbitration. The Trial Court denied the Motion to Compel. On de novo review the Appellate Court found that arbitration was mandatory. The Court explained that Plaintiffs could not avoid arbitration by suing nonsignatory defendants for claims that are based on the same facts and are inherently inseparable from arbitrable claims against signatory parties. Thus San Miguel, as well as EDI, could enforce the arbitration agreement.
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