Hunton Employment & Labor Perspectives

In a recent decision, the California Supreme Court refused to overturn an arbitrator’s award, despite finding the award was incorrect.  Specifically, the Court held that an arbitrator should have considered evidence of a rejected section 998 settlement offer and changed its cost award, even after issuing a final arbitration decision.  However, the Supreme Court determined a trial court does not have authority to correct this error. The ruling emphasized the broad scope of an arbitrator’s powers and narrow scope of judicial review when the parties choose arbitration.

Heimlich v. Shivji involved a dispute over legal fees between an inventor and his attorney.  The representation agreement contained an arbitration clause and during arbitration each party asserted claims for money owed.  

California’s legislature and courts have acted to curb an employer’s ability to recover its fees and costs when it prevails in a lawsuit brought under California’s Fair Employment and Housing Act (“FEHA”, Government Code § 12940 et seq.), even if the plaintiff employee rejected the employer’s Code of Civil Procedure Section 998 offer to compromise.