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Arbitrator Must Decide Whether Workplace Racial Discrimination Case Should Proceed as Class Action, Court of Appeal Rules

Arbitrator Must Decide Whether Workplace Racial Discrimination Case Should Proceed as Class Action, Court of Appeal Rules

photo credit: Malingering via photopin cc

By Aidan O’Shea

Communications Specialist

The California Court of Appeal today decided to allow an arbitrator to decide whether employees at John Elway Manhattan Beach Toyota can proceed as a class action in their dispute over their racist treatment at work. 

On April 14, 2012, the trial court granted a defendant’s motion to compel individual arbitration in the case because the plaintiff had signed three arbitration agreements. The Plaintiffs argued that the arbitration clauses implicitly allowed class actions, and nothing in their language prohibits class actions. But instead of allowing the arbitrator to determine if the case could move forward against the car dealership as a class, the trial court struck the class allegations as “being irrelevant.” 

“This is a huge decision for these workers, because now that they can bring a class action, they have a realistic chance at winning their case,” said Public Justice Executive Director Paul Bland, who argued the appeal.

This reversal on appeal is a victory for the current and former employees of John Elway’s Manhattan Beach Toyota, the plaintiffs in the case. These workers of color claim to have been denied equal pay and passed over for promotions because of their race, that they worked in an “environment heavily charged by use of racial slurs, epithets, and stereotypes,” that the General Manager of the dealership actively encouraged it, and that the owners systematically ignored it. Had the trial court ruling been upheld, the workers would have had to go through process of proving their having been discriminated against individually, which may have been prohibitively expensive and difficult, and ignore the systemic nature of the racism.

Bland explained the importance of this win within the context of the process of arbitration.

“If workers are going to be forced into arbitration, it’s important that the system not be rigged against them. In this case, a class action is the only meaningful remedy for the systemic racism of this dealership.”

The case, Sandquist v. Lebo Automotive, Inc., was brought by model Elway employee Timothy Sandquist, who was routinely passed over for salary increases and promotions, despite doing award-winning work during the dealership’s most successful years, according to the complaint. After years of trying to change the culture of his workplace internally, he resigned in 2011.

He and his fellow class members allege, in addition to the pay and promotion discrimination, and in addition to the verbally abusive atmosphere, that the only recourse was directly or indirectly through General Manager Darrell Sperber. They described Sperber as a man who “openly referred to the dealership’s employees of color as ‘dumb Mexicans,’ ‘goddamn Mexicans,’ ‘apes,’ ‘Aunt Jemimas,’ ‘camel people,’ and ‘slant eyes.’”

The complaint explains that when word of the discrimination did get through to owner John Elway and his partners after a survey of employees unequivocally painted a picture of a discriminatory workplace, “John Elway [and his partners] buried their head in the sand” rather than take any action against Sperber or “implement the type of programmatic changes that exist in virtually every other workplace.”

The plaintiffs in Sandquist, who are represented by Sanford Wittels & Heisler, LLP, of San Francisco, Calif., now have the opportunity to acheive both monetary relief and injunctive relief that will force the dealership to change its failed promotion and complaint systems, and end its culture of hatred.