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Franco v. Arakelian Enterprises, Inc., 211 Cal. App.4th 314 (2012)

The Appellate Case

Franco v. Arakelian Enterprises, Inc. is a case primarily centered around the issue of arbitration. The defendant, Arakelian Enterprises, Inc., sought to compel arbitration of the plaintiff’s claims for individual and class action relief, under the Labor Code Private Attorneys General Act of 2004 (PAGA). The trial court initially denied Arakelian’s petition to compel arbitration.

The case was further complicated by the fact that the plaintiff, Franco, had initially named the wrong defendant in his suit. Franco had mistakenly named “Athens Disposal Company, Inc., dba Athens Services” as his employer when it was actually Arakelian “doing business as Athens Services”. This information was not disclosed until after Arakelian had exhausted all its appellate proceedings unsuccessfully seeking to compel arbitration.

The case went through multiple rounds of appeal. One central question in these appeals was whether the California Supreme Court decision in Gentry v. Superior Court, which Franco I had relied upon, was still valid given recent decisions of the United States Supreme Court. Ultimately, the court affirmed the trial court’s denial of the defendant’s second petition to compel arbitration, holding that the decision to forego class actions and private attorney general actions is unenforceable. The delay in Arakelian identifying itself as Franco’s true employer was not addressed in the Franco II decision.

Therefore, in layman’s terms, Franco, an employee, sued his employer, Arakelian, for violating labor laws. Arakelian wanted to deal with the dispute through arbitration (a private process outside of court), but the court said they couldn’t force Franco to do that. There were also some complications because Franco initially sued the wrong company, but that was corrected during the process.

Is It Illegal, or Just Unfair?

Legal cases can be lengthy, complicated, and confusing, but you don’t have to take on the system all by yourself. If you believe someone has violated your individual rights, or the rights of a large group of people in your community, we can help you find the right course of action.

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