58 | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP However, in Ramos v. Superior Court,478 the court held an arbitration provision between a law firm and one of its Income Partners was unenforceable.479 The court held that the provision’s limitation of remedies would prevent plaintiff from obtaining some of the remedies available to her under her statutory claims, including the right to backpay, front pay, reinstatement, or punitive damages under California’s Fair Pay Act, and it stated that the arbitrators would have no authority to substitute their judgment or override determinations of the firm’s partnership or Executive Committee. 480 The court held that this would constrain the relief the arbitration could provide and would prevent the arbitrators from providing remedies that would otherwise be available in a court of law. In addition, the court held that the provisions that required plaintiff to pay half the costs of arbitration and her own attorneys’ fees, and the confidentiality provision, rendered the agreement unconscionable and therefore void under California law.481 Careful drafting is critical when it comes to the enforceability of arbitration agreements. Imprecise language can sometimes provide employees an escape route back to federal court. For example, in Sorathia v. Fidato Partners, LLC,482 the employer sought to compel arbitration pursuant to an arbitration clause within an employment agreement that required arbitration of “[a]ny controversy or claim arising out of or relating to this Agreement . . . .”483 The court held that the clause was valid, but found that the plaintiff’s disputes did not fall within the scope of its provisions because the employment agreement at issue was primarily directed at the handling of confidential information and restrictions on competition and solicitation, rather than the issues raised by plaintiff’s complaint.484 The mere fact that the agreement was termed an “employment agreement” was not enough to bring plaintiff’s claims within its scope: “Because the arbitration clause is limited to ‘any controversy or claim arising out of or relating to this Agreement,’ and Plaintiff's claims do not arise out of or relate to the Agreement, I decline to find that Plaintiff's claims fall within the scope of the arbitration clause.”485 478 Ramos v. Super. Ct., 239 Cal Rptr. 3d 679 (Cal. Ct. App. 2018). In that case, an Income Partner at a law firm alleged various causes of action under state law for discrimination, retaliation, wrongful termination, and anti-fair-pay practices. Id. at 685. Although the law firm argued that Armendariz should not apply because an “Income Partner” should not be considered an “employee,” the court held that it need not address that issue. 479 The court first held that an “Income Partner” is an employee of the firm. Among other things, the court pointed to the firm’s superior bargaining position vis-à-vis its Income Partners, akin to that of an employment relationship, finding that Income Partners can be expelled from the partnership “for any reason,” and that the plaintiff had no opportunity to negotiate the arbitration provision because the partnership agreement had been adopted by the capital partners before she joined the firm. Id. at 694. Whether nonequity law partners can be considered “employees” under the federal EPA has been the subject of other recent equal pay litigation. For example, in Campbell v. Chadbourne & Parke LLP, No. 16-cv-6832 (JPO), 2017 WL 2589389 (S.D.N.Y. June 14, 2017), a female partner claimed that she was paid less than her male peers. The law firm defendant tried to dispense with the claims quickly—before substantial discovery had taken place—by arguing that the term “partner” and the terms of the operative partnership agreement foreclosed the possibility that income partners could be considered employees under the EPA. Id. at *2. The court denied summary judgment on the grounds that additional discovery was necessary to determine “employment” status under the factors set forth in Clackamas Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440 (2003). Those factors are: (1) whether the organization can hire or fire the individual or set the rules and regulations of the individual's work; (2) whether and, if so, to what extent the organization supervises the individual's work; (3) whether the individual reports to someone higher in the organization; (4) whether and, if so, to what extent the individual is able to influence the organization; (5) whether the parties intended that the individual be an employee, as expressed in written agreements or contracts; and (6) whether the individual shares in the profits, losses, and liabilities of the organization. Campbell, 2017 WL 2589389, at *2 (citing and quoting Clackamas Gastroenterology Assocs., P.C., 538 U.S. at 449-50). Plaintiffs argued that additional discovery would show that the law firm’s hiring, firing, and promotion decisions, as well as decisions concerning any individual partner’s degree of control, autonomy, and access to profits are determined exclusively by the firm’s Management Committee. Id. at *3. Given the fact-sensitive nature of the factors used to determine employment status, the court denied the law firm’s motion for summary judgment until additional discovery could be taken relating to those factors. The lawsuit later settled. 480 Ramos, 239 Cal Rptr. 3d at 696-97. Under prior California precedent, Armendariz v. Found. Health Psychare Servs., Inc., 99 Cal. Rptr. 2d 745 (Cal. 2000), the California Supreme Court had held that mandatory employment agreements that require employees to waive their rights to bring statutory discrimination claims under the Fair Employment and Housing Act and related claims for wrongful termination in violation of public policy are unlawful. Id. at 692. 481 Id. at 704. 482 Sorathia v. Fidato Partners, LLC, 483 F. Supp. 3d 266 (E.D. Pa. 2020). 483 Id. at 273. 484 Id. at 275-76. 485 Id. at 277 (emphasis in original). See also Ramos v. Total-Western, Inc., No. B295468, 2020 WL 1283099, at *5 (Cal. Ct. App. Mar. 18, 2020) (refusing to compel arbitration where arbitration provision in collective bargaining agreement did not clearly and unmistakably waive plaintiffs’ right to pursue claims, including equal pay claims, under California’s Fair Employment and Housing
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