Serrano v. Community Organized Relief Effort CA2/7
CourtCalifornia Court of Appeal
Date FiledOctober 29, 2026
DocketB340012
StatusUnpublished
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Full Opinion
Filed 10/29/26 Serrano v. Community Organized Relief Effort CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
SARENA SERRANO, B340012
Plaintiff and Appellant, (Los Angeles County
Super. Ct.
v. No. 21STCV33097)
COMMUNITY ORGANIZED
RELIEF EFFORT et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Upinder S. Kalra, Judge. Affirmed.
Manuel Corrales, Jr., for Plaintiff and Appellant.
Greenberg Traurig, Matthew Rosengart, Karin L.
Bohmholdt and Philip I. Person for Defendants and Respondents.
__________________________
Sarena Serrano appeals from a judgment confirming an
arbitration award in favor of her former employer, Community
Organized Relief Effort (CORE) and its chief executive officer,
Ann Young Lee, on Serrano’s claims for sexual harassment based
on hostile work environment, aiding and abetting sexual
harassment, and retaliation in violation of the California Fair
Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA)
and related claims. Serrano contends the trial court erred in
confirming the award because the arbitrator exceeded his powers
under the parties’ arbitration agreement by granting a
prehearing motion to dismiss Serrano’s claims as untimely.
Serrano argues the arbitrator committed legal errors that
denied her a hearing on her unwaivable FEHA rights, including
the arbitrator’s finding that the American Arbitration
Association’s (AAA) Employment Arbitration Rules and
Mediation Procedures (Employment Arbitration Rules) governed
the parties’ dispute. Serrano also contends the arbitrator erred
in interpreting those employment rules to mean that the FEHA
statute of limitations for commencement of civil actions following
issuance of a right to sue letter also governed how long a plaintiff
had to make a demand for arbitration following a trial court
order granting a motion to compel arbitration. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. Serrano’s Employment, Termination, and Complaint
CORE is a nonprofit crisis-response organization that
partnered with the City of Los Angeles (City) in March 2020, at
the beginning of the COVID-19 pandemic, to administer public
testing for the COVID-19 virus. On June 16, 2020 CORE hired
2
Serrano to assist with the logistics, set-up, and administration of
its testing site at Dodger Stadium. That day Serrano signed an
employment agreement.
Article 4, paragraph 8 of the employment agreement
included a provision titled “binding arbitration” (arbitration
agreement). (Capitalization omitted.) The provision stated in
part: “Subject to each Party’s right to obtain provisional
equitable relief in a court of applicable jurisdiction pending a
final award of the arbitrator, any controversy or claim between
the Employer and the Employee related to this Agreement shall
be settled by expedited arbitration in accordance with the
expedited Labor Arbitration Rules of the [AAA], except that if the
Employer adopts an employment ADR plan, within the meaning
of the National Rules for the Resolution of Employment Disputes
of the AAA (the ‘Employment Rules’), then such employment
ADR plan and the Employment Rules shall apply. . . .”
From June 16 through mid-August 2020, while Serrano
was working at Dodger Stadium, Battalion Chief Jaime Lesinski
of the Los Angeles Fire Department (LAFD) was also working at
the CORE testing site. Lesinski was present in his capacity as a
City employee, but, as alleged by Serrano, he operated under
CORE’s supervision and direction. Serrano alleged that
throughout this period, Lesinski frequently touched her and
other young female CORE employees on their lower backs or
buttocks without their consent. Lesinski also frequently
commented on Serrano’s and other women’s sex organs and made
other sexually inappropriate and demeaning comments. In late
August 2020 Serrano told her supervisor she needed a mental
health day because she was suffering from depression and a
breakdown after learning that CORE management (including
3
Lee) knew about Lesinski’s harassing behavior but would not
stop it. Although Serrano initially received paid leave, CORE
later advised her that her future leave would be unpaid.
On October 1, 2020 CORE terminated Serrano for
“‘unprofessional behavior.’” Serrano alleged CORE refused to tell
her what this behavior was, and when Serrano complained about
Lesinski’s harassment, Lee told her that Lesinski was a personal
friend and Lee would not do anything about his conduct. CORE
did not investigate Serrano’s claims and instead gave as a false
pretext that it terminated Serrano because she was
“‘irresponsible.’”
On March 11, 2021 Serrano filed a complaint for
employment discrimination under FEHA with the California
Department of Fair Employment and Housing (DFEH) (now
called the Civil Rights Department), naming CORE as the
respondent. The same day, the DFEH issued a right to sue letter
and closed the administrative complaint.
On September 8, 2021 Serrano filed a civil action in the
superior court against CORE, Lee, the City, and Lesinski.
Serrano’s complaint asserted five causes of action under FEHA
against CORE and/or Lee, including sexual harassment based on
hostile work environment, aiding and abetting sexual
harassment, retaliation, and failure to prevent harassment and
retaliation (Gov. Code, § 12940, subds. (h)-(k)). Serrano also
asserted against CORE a cause of action for sexual harassment
in violation of Civil Code section 51.9 and a common law cause of
action for wrongful termination in violation of public policy. The
4
causes of action alleged against the City and Lesinski are not at
issue in this appeal.1
On October 27, 2021 CORE filed a motion to compel
arbitration; Lee joined the motion. Serrano opposed the motion
on multiple grounds, including that the arbitration agreement
was procedurally unconscionable because Serrano was not “given
any arbitration rules to review before signing” and the agreement
did not “explain[] how [Serrano] could learn or find out what the
arbitration rules were before she signed the document.” On
January 19, 2022 the trial court (Judge Lawrence P. Riff) granted
the motion to compel and ordered the claims against CORE and
Lee to arbitration.
Lesinski also filed a motion to compel arbitration, and on
June 29, 2022 the trial court (Judge Upinder S. Kalra) granted
Lesinski’s motion, finding Lesinski, as alleged, acted as CORE’s
agent and was a third-party beneficiary of the arbitration
agreement with Serrano.
B. The Arbitration and CORE’s Dispositive Motion
Approximately 19 months after the trial court granted
CORE’s motion to compel arbitration, on August 21, 2023
Serrano filed a demand for arbitration (demand) with the AAA.
Serrano utilized the AAA demand form titled “Employment
Arbitration Rules Demand for Arbitration” (block capitalization
omitted) and named as respondents CORE, Lee, and Lesinski.
1 Serrano dismissed her claims against the City on
December 19, 2022. According to Serrano, her claims against
Lesinski were settled before the merits hearing in the
arbitration.
5
Serrano incorporated her civil complaint in lieu of a statement of
her claims.
The parties selected Richard R. Mainland as the arbitrator.
On November 28, 2023, following the initial conference with the
parties’ attorneys, the arbitrator issued a case management
order. The order identified the claims at issue in the arbitration
and summarized the procedures for discovery, expert witnesses,
and pre-hearing exchanges. As relevant here, the order stated
that “[t]he Employment Arbitration Rules of the AAA and
California substantive law apply in this arbitration.” The order
also stated that the parties could submit dispositive motions, and
the arbitrator would set a briefing schedule and a hearing on
such motions.
On December 14, 2023 CORE and Lee (collectively, CORE)
filed a dispositive motion (styled as a demurrer and motion to
dismiss) seeking dismissal of the claims against them on statute
of limitations grounds. CORE argued the AAA’s Employment
Arbitration Rules governed the dispute, and rule 4(b)(i)(1) of
those rules (Rule 4) specified that a claimant must file her
arbitration demand “‘within the time limit established by the
applicable statute of limitations.’” Pursuant to Government Code
section 12965,2 Serrano’s five FEHA claims were subject to a one-
2 It is undisputed that Government Code section 12965
provides a one-year deadline to file a civil action under FEHA
following issuance of a right to sue letter. Section 12965,
subdivision (c)(1)(D), provides that the Civil Rights Department
right to sue letter “shall indicate that the person claiming to be
aggrieved may bring a civil action under this part . . . within
one year from the date of that [letter].” (See Stats. 2025, ch. 321
§ 3, eff. Jan. 1, 2026.) From 2022 to 2025 substantially the same
6
year filing deadline running from the date she received the right
to sue letter from the DFEH. CORE conceded for purposes of the
motion that pursuant to Code of Civil Procedure section 1281.12,3
the statute of limitations was tolled during the trial court
proceedings until 30 days after the order compelling arbitration.
Taking into account tolling, CORE calculated that Serrano filed
the arbitration demand 730 days after receiving the right to sue
letter, excluding the 163-day period from the date Serrano filed
her civil complaint (Sept. 8, 2021) until 30 days after the trial
court granted the motion to compel arbitration (Feb. 18, 2022).
CORE asserted Serrano’s claim for wrongful termination in
violation of public policy was subject to section 335.1’s two-year
statute of limitations for personal injury claims, running from the
date she was terminated. CORE calculated that Serrano filed the
arbitration demand 891 days after she was terminated, excluding
the 163-day tolling period under section 1281.12.
language appeared in former subdivision (c)(1)(C). (See Stats.
2021, ch. 278, § 7, eff. Jan. 1, 2022.)
3 Code of Civil Procedure section 1281.12 states, “If an
arbitration agreement requires that arbitration of a controversy
be demanded or initiated by a party to the arbitration agreement
within a period of time, the commencement of a civil action by
that party based upon that controversy, within that period of
time, shall toll the applicable time limitations contained in the
arbitration agreement with respect to that controversy, from the
date the civil action is commenced until 30 days after a final
determination by the court that the party is required to arbitrate
the controversy . . . .”
Further undesignated statutory references are to the Code
of Civil Procedure.
7
In her opposition, Serrano argued her FEHA claims were
not time-barred because she filed the civil complaint just
five months after receiving DFEH’s right to sue letter, clearly
satisfying Government Code section 12965’s deadline to bring a
“civil action” within a year. Further, section 12965 did not apply
to contractual arbitration, and the fact CORE later successfully
compelled arbitration of the FEHA claims did not negate her
timely filing. Moreover, she argued, Rule 4’s requirement that
Serrano commence arbitration within the time “‘established by
the applicable statute of limitations’” did not apply because
section 1281.12 governed the limitations period, which provided
for tolling of any limitations period “contained in the arbitration
agreement,” but there was no limitations period in the parties’
agreement.
After CORE filed its reply brief, the arbitrator sent the
parties a focus letter asking them to address at oral argument,
among other topics, whether the Employment Arbitration Rules
had been validly incorporated by reference into the arbitration
agreement, and if so, what Rule 4’s “applicable statute of
limitations” meant as applied to the demand.
At the February 29, 2024 hearing on the dispositive motion,
Serrano’s attorney argued that Rule 4 was not incorporated into
the arbitration agreement because the Employment Arbitration
Rules did not apply. Rather, the arbitration agreement provided
that the arbitration would be governed by AAA’s Expedited Labor
Arbitration Rules (Labor Rules). Only if the employer adopted an
ADR plan would the arbitration be governed by a different set of
rules. Serrano’s attorney argued there was no evidence that
CORE had adopted an ADR plan at the time Serrano signed the
arbitration agreement, and thus the Labor Rules applied. The
8
Labor Rules did not contain any reference to the “applicable
statute of limitations” language, unlike Rule 4.
Further, even where an employer adopts an ADR plan, the
arbitration agreement provided in that case for arbitration under
the AAA’s “‘Employment Rules,’” which the arbitration
agreement defined as the AAA’s National Rules for the
Resolution of Employment Disputes (National Arbitration Rules).
Serrano’s attorney pointed out that the National Arbitration
Rules were AAA’s employment arbitration rules in place as of
2004.4
4 Serrano submitted the National Arbitration Rules,
amended and effective January 1, 2004, and the Labor Rules,
amended and effective July 1, 2013, in connection with the
hearing on the dispositive motion.
On our own motion, we take judicial notice of the AAA’s
Employment Arbitration Rules and Mediation Procedures (Rules
amended and effective November 1, 2009 and Introduction
revised October 1, 2017) (what we have referred to as the
Employment Arbitration Rules), available on the AAA website:
<https://www.adr.org/media/xzqblxny/employmentrules_web.pdf>
(as of October 28, 2026), archived at <https://perma.cc/35AH-
AXFN>. (Evid. Code, §§ 452, subd. (h), 459, subd. (a); see
Emerald Aero, LLC v. Kaplan (2017) 9 Cal.App.5th 1125, 1132,
fn. 5 [arbitration rules are subject to judicial notice].) Rule 1 of
the 2009 and 2017 versions of the Employment Arbitration Rules
states: “The National Rules for the Resolution of Employment
Disputes have been re-named the Employment Arbitration Rules
and Mediation Procedures. Any arbitration agreements
providing for arbitration under its [National Arbitration Rules]
shall be administered pursuant to these . . . Employment
Arbitration Rules.”
9
Serrano’s attorney also argued (in response to a waiver
argument by CORE) that Serrano’s use of the AAA’s Employment
Arbitration Rules Demand Form and the failure to object to the
case management order (which specified the Employment
Arbitration Rules would apply to the arbitration) did not
constitute Serrano’s consent to arbitrate under the Employment
Arbitration Rules. Instead, the use of an incorrect form was a
“hyper-technical” error, and the arbitrator was required to correct
the erroneous case management order rather than enforce rules
without Serrano’s consent.
CORE’s attorney argued the Employment Arbitration
Rules applied to the arbitration, not the Labor Rules, noting the
dispute was a “straightforward employment case” and did not
involve a union or a labor dispute. Further, the Employment
Arbitration Rules applied “if the employer adopts an employment
ADR plan—which CORE undisputedly did.” After hearing
argument for more than an hour, the arbitrator took the
dispositive motion under submission.
On March 5, 2024 the arbitrator granted the motion. In his
six-page ruling, the arbitrator addressed the arguments and
authorities in the parties’ briefs and those presented for the first
time at the hearing. The arbitrator found “the Employment
Arbitration Rules . . . apply in this case, both because of
[Serrano’s] initiation of the case as an employment rules case,
because of my unopposed Case Management Order confirming
applicability of the Employment [Arbitration] Rules, and because
the Employment [Arbitration] Rules were validly incorporated by
reference into [Serrano’s] Employment Agreement.” The
arbitrator “accept[ed] the representation of [CORE’s] counsel at
oral argument that CORE did adopt an ADR plan.” Moreover, it
10
was “likely that the AAA would not have accepted this case for
administration unless such a plan had been adopted.” Instead,
consistent with Serrano’s use of the employment arbitration
demand form, the AAA administered the case from inception
under the Employment Arbitration Rules. Serrano received
multiple communications clarifying that the Employment
Arbitration Rules were being applied and never objected. The
arbitrator also noted the Labor Rules appeared to focus on
“disputes under the collective bargaining agreements, not
individual disputes between an employer and employee under an
employment contract.”
The arbitrator found that “pursuant to Rule 4 of the
Employment [Arbitration] Rules, the one-year statute of
limitations for FEHA claims and the two-year statute of
limitations for wrongful termination claims apply.” Although
Government Code section 12965 and Code of Civil Procedure
section 335.1 governed “actions” and not arbitration proceedings,
the “most reasonable interpretation of Rule 4 is that ‘applicable
statute of limitations’ refers to those [code] sections establishing
statues of limitations for the causes of action being asserted in
the arbitration . . . .” Serrano’s contrary interpretation of Rule 4
that it could only refer to section 1281.12 was unreasonable
because it would “eliminate or drastically limit the scope of Rule
4, by restricting ‘applicable statutes [sic] of limitations’ to
contractual limitations and excluding the many statutes of
limitations governing causes of action that may be asserted in
arbitrations.”
Finally, the arbitrator found it was “undisputed that
[Serrano] did not initiate this arbitration within the limitations
period for those claims, even giving [her] the benefit of the tolling
11
during the pursuit of her court action pursuant to
[section] 1218.12.” Accordingly, Serrano’s claims against CORE
and Lee were time-barred.
C. Serrano’s Petition To Vacate
On March 26, 2024 Serrano filed a petition to vacate the
arbitration award, attaching the arbitrator’s March 5, 2024
ruling as the award. Serrano’s principal argument was that the
arbitrator exceeded his authority under the arbitration
agreement by applying the Employment Arbitration Rules and
determining under Rule 4 that the statutes of limitations for civil
actions governed her claims.
After briefing and a hearing, on May 14, 2024 the trial
court denied the petition to vacate and confirmed the award. The
court found the arbitrator did not exceed his authority in
applying the Employment Arbitration Rules because the award
showed the arbitrator “was following the arbitration agreement’s
clear expression that an employment ADR plan controls when the
employer chooses to do so [and] [t]he [a]rbitrator found CORE
had done so.” The arbitrator was also within his authority to
interpret the arbitration rules, and his construction of Rule 4 was
“reasonable and, as such, not a clear error of law.” Further,
“since it was undisputed that after applying the tolling provision
of [section] 1218.12, [Serrano] failed to initiate the arbitration
within the applicable FEHA and wrongful termination time
periods, the court’s limited judicial review prevents the [c]ourt
from overturning the [a]rbitrator’s decision.”
On June 4, 2024 the trial court entered a notice of ruling
and judgment denying the petition to vacate, confirming the
arbitrator’s ruling on the dispositive motion and dismissing
12
Serrano’s claims against CORE and Lee. Serrano timely
appealed.
DISCUSSION
A. Judicial Review of Arbitration Awards
“California law favors alternative dispute resolution as a
viable means of resolving legal conflicts. ‘Because the decision to
arbitrate grievances evinces the parties’ intent to bypass the
judicial system and thus avoid potential delays at the trial and
appellate levels, arbitral finality is a core component of the
parties’ agreement to submit to arbitration.’” (Richey v.
AutoNation, Inc. (2015) 60 Cal.4th 909, 916 (Richey); accord,
Valencia v. Mendoza (2024) 103 Cal.App.5th 427, 440.) The
California Arbitration Act (CAA; § 1281 et seq.) provides “only
limited grounds for judicial review of an arbitration award”;
under the statute, “courts are authorized to vacate an award if it
was (1) procured by corruption, fraud, or undue means; (2) issued
by corrupt arbitrators; (3) affected by prejudicial misconduct on
the part of the arbitrators; or (4) in excess of the arbitrators’
powers.” (Cable Connection, Inc. v. DIRECTV, Inc. (2008)
44 Cal.4th 1334, 1344, citing § 1286.2, subd. (a); see Soni v.
SimpleLayers, Inc. (2019) 42 Cal.App.5th 1071, 1085-1286
[§ 1286.2 provides the “[e]xclusive grounds for vacating an
arbitration award”].)
“We review de novo a trial court order confirming an
arbitration award, including its determination whether the
arbitrator exceeded her powers in granting relief.” (Valencia v.
Mendoza, supra, 103 Cal.App.5th at p. 442; see Roussos v.
Roussos (2021) 60 Cal.App.5th 962, 973 [‘“‘“On appeal from an
13
order confirming an arbitration award, we review the trial court’s
order (not the arbitration award) under a de novo standard.”’”’].)
However, we review a trial court’s determination of disputed
factual issues for substantial evidence. (Roussos, at p. 973.)
Further, “‘[e]very reasonable intendment is indulged to give effect
to arbitration proceedings; the burden is on the party attacking
the award to affirmatively establish the existence of error by a
proper record.’” (Rivera v. Shivers (2020) 54 Cal.App.5th 82, 94;
accord Lopes v. Millsap (1992) 6 Cal.App.4th 1679, 1685.)
“‘Generally, courts cannot review arbitration awards for
errors of fact or law, even when those errors appear on the face of
the award or cause substantial injustice to the parties.’” (Law
Finance Group, LLC v. Key (2023) 14 Cal.5th 932, 957; accord,
Heimlich v. Shivji (2019) 7 Cal.5th 350, 367 (Heimlich) [“Most
legal errors in arbitration are not reviewable.”]; Cable
Connection, Inc. v. DIRECTV, supra, 44 Cal.4th at p. 1361 [“[T]he
general rule [is] that the merits of the award are not subject to
judicial review.”]; see Moncharsh v. Heily & Blase (1992)
3 Cal.4th 1, 28 [“‘[A]rbitrators do not exceed their powers merely
because they assign an erroneous reason for their decision.’
[Citations.] A contrary holding would permit the exception to
swallow the rule of limited judicial review; a litigant could always
contend the arbitrator erred and thus exceeded his powers.”].)
However, the Supreme Court has recognized some limited
and “‘exceptional circumstances justifying judicial review of an
arbitrator’s decision”’ where “[a]rbitrators may exceed their
powers by issuing an award that violates a party’s unwaivable
statutory rights or that contravenes an explicit legislative
expression of public policy.” (Richey, supra, 60 Cal.4th at
pp. 916-917.) For example, in Pearson Dental Supplies, Inc. v.
14
Superior Court (2010) 48 Cal.4th 665 (Pearson), the Supreme
Court held that a trial court could vacate an award where “a clear
error of law by an arbitrator means that an employee subject to a
mandatory arbitration agreement will be deprived of a hearing on
the merits of an unwaivable statutory employment claim.” (Id. at
p. 670.) In Pearson, the arbitrator misapplied section 1281.12
and concluded, without providing a written explanation, that the
plaintiff’s FEHA claims were untimely and issued an award in
favor of the employer.5 (Pearson, at pp. 671-672.) Construing the
CAA “in light of the Legislature’s intent that employees be able to
enforce their right to be free of unlawful discrimination under
FEHA,” the Pearson court concluded that “when, as here, an
employee subject to a mandatory employment-arbitration
agreement is unable to obtain a hearing on the merits of his
FEHA claims, or claims based on other unwaivable statutory
rights, because of an arbitration award based on legal error, the
trial court does not err in vacating the award.” (Id. at p. 680,
italics added.)
In Richey, supra, 60 Cal.4th at page 918, the Supreme
Court reexamined Pearson and emphasized the decision’s
5 Although the arbitrator in Pearson did not state his reasons
for finding the employee’s FEHA claims were time-barred
pursuant to section 1281.12, the Supreme Court suggested the
arbitrator may have erroneously adopted the defendant’s
argument that section 1281.12 did not toll the statute of
limitations during the pendency of the civil action, but once the
one-year limitations period is reached, the deadline is
“temporarily abated,” then reinstated 30 days after the court
compels arbitration, thereby allowing the plaintiff only 30 days in
which to initiate arbitration of a time-barred claim. (Pearson,
supra, 48 Cal.4th at p. 675.)
15
“limited application.” The court in Richey explained that the
arbitrator in Pearson had “‘misconstrued the procedural
framework under which the parties agreed the arbitration was to
be conducted, rather than misinterpreting the law governing the
claim itself’ [citation], a distinction that explained the narrow
application of our holding.” (Richey, at p. 918, quoting Pearson,
at pp. 679-680.) Specifically, the arbitrator “committed clear
legal error by (1) ignoring a statutory mandate, and (2) failing to
explain in writing why the plaintiff would not benefit from the
statutory tolling period. . . . [This] narrow rule was sufficient to
resolve the case.” (Richey, at pp. 918-920 [declining to review for
legal error the arbitrator’s decision to accept employer’s “honest
belief” defense to denial of leave claims under the California
Family Rights Act, Gov. Code, §§ 12945.1, 12945.2].)
Serrano contends we should review the arbitrator’s
dispositive ruling under the Pearson rule because, as in Pearson,
the arbitrator “committed clear legal error in misapplying the
statute of limitations beyond the confines of the arbitration
agreement, which had the effect of denying [Serrano] the right to
fully vindicate her statutory FEHA claims in the arbitral forum.”
Although this case involves Serrano’s unwaivable statutory
rights under FEHA, it does not fall within Pearson’s “narrow
rule.” (Richey, supra, 60 Cal.4th at p. 918.)
Unlike Pearson, the arbitrator did not ignore a statutory
mandate or misconstrue the procedural framework of the
arbitration. Indeed, Serrano does not challenge the arbitrator’s
construction of Code of Civil Procedure sections 1281.12 or 335.1,
or Government Code section 12965. Rather, she argues the
arbitrator erred in interpreting the arbitration agreement and
the AAA rules in deciding whether to impose the one- and two-
16
year statutes of limitation. But these are questions of law on
which we defer to the arbitrator. (See Advanced Micro Devices,
Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 378 (Advanced Micro
Devices) [“‘[A]s long as the arbitrator is even arguably construing
or applying the contract and acting within the scope of his
authority, that a court is convinced he committed serious error
does not suffice to overturn his decision.’”]; JP-Richardson, LLC
v. Pacific Oak SOR Richardson Portfolio JV, LLC (2021)
65 Cal.App.5th 1177, 1188 [same]; see also Ortiz v. Elmcrest Care
Center, LLC (2024) 106 Cal.App.5th 594, 613, fn. 8 [“unless the
parties have agreed the arbitrator’s interpretation of provider
rules may be judicially reviewed on the merits, the court must
‘defer to the arbitrator’s interpretation and application of the
[r]ules.’”].)
Further, unlike in Pearson, the issues involving application
of the limitation periods were fully briefed and extensively
argued. The arbitrator issued a focus letter articulating the key
issues, considered Serrano’s last-minute submissions and
arguments, and issued a detailed ruling addressing the
arguments and authorities presented at the hearing.6
6 As we will discuss, even if we review the arbitrator’s
decision for “clear legal error” under Pearson, the arbitrator did
not err in interpreting the application of the FEHA limitations
period under Rule 4. (See Richey, supra, 60 Cal.4th at pp. 918-
920.)
17
B. The Trial Court Did Not Err in Confirming the Arbitrator’s
Award
1. The arbitrator did not exceed his powers in applying
the Employment Arbitration Rules
Serrano contends the trial court erred in denying the
motion to vacate the arbitrator’s dispositive ruling because the
arbitrator exceeded his authority under the arbitration
agreement by applying the Employment Arbitration Rules (and
thus Rule 4) to the proceedings. As discussed, the parties agreed
in the arbitration agreement that the Labor Rules would apply to
any dispute unless CORE “adopts an employment ADR plan,
within the meaning of the [National Arbitration Rules] (the
‘Employment Rules’),” in which case the “Employment Rules
shall apply.” Serrano argues the arbitrator was required to apply
the Labor Rules because there was no evidence CORE adopted an
ADR plan, and further, even if CORE had adopted an ADR plan,
the arbitrator was required to apply the 2004 National
Arbitration Rules rather than the “current version now named
Employment Arbitration Rules.” The arbitrator did not exceed
his powers.
“‘Absent an express and unambiguous limitation in the
contract or the submission to arbitration, an arbitrator has the
authority to find the facts, interpret the contract, and award any
relief rationally related to his or her factual findings and
contractual interpretation.’” (Heimlich, supra, 7 Cal.5th at
p. 358; accord, Advanced Micro Devices, supra, 9 Cal.4th at
p. 378; see Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th
1179, 1182 [“the arbitrator did not exceed his powers by
interpreting the contract to allow for equitable excusal of the
18
notice-and-cure condition or by making a factual finding that
notice would have been an idle act”].)
The arbitrator’s factual finding that CORE adopted an
ADR plan was based on the representation of CORE’s attorney
during the dispositive motion hearing that CORE “undisputedly”
adopted an ADR plan, as well as the arbitrator’s finding that it
was likely that AAA would not have accepted Serrano’s case for
administration unless an ADR plan had been adopted. Serrano
argues this was mere speculation, not “evidence.” It is true that
counsel’s representation that CORE adopted an ADR plan is not
evidence. But the arbitrator also considered other facts in
making his ruling, including whether the arbitration would have
proceeded without an ADR plan and that Serrano had filed her
demand on AAA’s Employment Arbitration Rules Demand Form.
Moreover, California’s evidentiary rules do not apply to the
arbitration under any interpretation of the agreement: both
Employment Arbitration Rule 30 and Labor Arbitration Rule 27
provide that “the arbitrator shall be the judge of the relevance
and materiality of the evidence offered” and that “conformity to
legal rules of evidence shall not be necessary.” Further, to the
extent the arbitrator made any evidentiary errors in considering
these facts, these rulings are not subject to judicial review under
the CAA. (See Heimlich, supra, 7 Cal.5th at p. 370 [“an
erroneous legal ruling result[ing] in the exclusion of evidence”
was “not judicially reviewable”].) In light of the arbitrator’s
finding that CORE adopted an ADR plan, the arbitrator’s
reliance on the arbitration agreement to reject application of the
19
Labor Rules is not a ground to vacate the award. (Heimlich,
supra, 7 Cal.5th at p. 358.)7
Serrano argues that even if the AAA’s “Employment Rules”
(instead of Labor Rules) applied, the arbitrator exceeded his
powers in applying the current Employment Arbitration Rules
rather than the pre-2009 National Arbitration Rules expressly
named in the agreement.8 However, Serrano concedes that the
Employment Arbitration Rules are a “newly revised version”
(capitalization omitted) of the National Arbitration Rules that
were last modified in 2004. As discussed, the revised rules state
that the National Arbitration Rules “have been re-named the
Employment Arbitration Rules,” and “[a]ny arbitration
agreements providing for arbitration under its [National
7 Because we hold the arbitrator did not exceed his powers in
finding the Labor Rules did not apply, we do not reach Serrano’s
argument that she did not waive application of the Labor Rules
by demanding arbitration under the Employment Arbitration
Rules and repeatedly failing to object to administration of the
case under those rules.
8 Rule 4(b)(i)(1) of the National Arbitration Rules, amended
January 1, 2004, provided that a claimant must file her demand
“within the time limit established by the applicable statute of
limitations if the dispute involves statutory rights. If no statutory
rights are involved, the time limits established by the applicable
arbitration agreement shall be followed.” (Italics added.) Rule 4
of the Employment Arbitration Rules does not contain the
language we have italicized. Because we hold the arbitrator
properly applied the Employment Arbitration Rules, we do not
reach Serrano’s argument that the award should be vacated
under the Labor Rules because her single nonstatutory claim for
wrongful termination in violation of public policy (i.e., FEHA)
was not subject to section 335.1’s two-year limitations period.
20
Arbitration Rules] shall be administered pursuant to these
Employment Arbitration Rules . . . .” The arbitrator found the
National Arbitration Rules “had no applicability” because
Serrano’s employment (starting in 2020), the arbitration
agreement, and the arbitration all occurred after the
Employment Arbitration Rules were adopted. In so ruling, the
arbitrator impliedly rejected Serrano’s argument that the
arbitration agreement, in referring to the National Arbitration
Rules, expressed the parties’ clear intent to arbitrate under the
16-year-old superseded rules rather than AAA’s current
employment rules.
The arbitrator’s factual findings and his legal
interpretation of the arbitration agreement are not subject to
judicial review. (Panoche Energy Center, LLC v. Pacific Gas &
Electric Co. (2016) 1 Cal.App.5th 68, 99 [in reviewing order on
petition to confirm or vacate, appellate court must “defer to the
factual and legal findings made by the arbitrator”]; see Advanced
Micro Devices, supra, 9 Cal.4th at p. 378 [“[I]f the award [is]
derived from the arbitrator’s construction of the agreement, even
an erroneous construction, it was within his authority.”].)
Serrano relies on Gilbert Street Developers, LLC v.
La Quinta Homes, LLC (2009) 174 Cal.App.4th 1185, 1194
(Gilbert) to argue that the parties could not have agreed to
arbitrate under the Employment Arbitration Rules because “a
contract cannot incorporate by reference terms of a document
that does not exist or might exist in the future as a possibility.”
In Gilbert, the parties’ agreement provided for arbitration of
commercial disputes “‘conducted in accordance with the Rules of
[AAA] existing at the date thereof.’” (Id. at p. 1187.) At the time
the parties executed the agreement, the AAA had no rule
21
providing that the arbitrators had jurisdiction to rule on their
own jurisdiction, but by the time of the dispute, AAA had adopted
such a rule. (Id. at pp. 1187-1188.) Following an original
demand for arbitration, the panel of arbitrators determined that
the arbitration agreement delegated jurisdictional issues to the
panel. (Id. at p. 1188.) The Court of Appeal affirmed the trial
court’s order denying confirmation of the award, holding the
language in the arbitration agreement incorporating the
subsequent AAA rules did not constitute a “clear and
unmistakable” agreement to delegate jurisdiction to the
arbitrators to decide their own jurisdiction (and issues of
arbitrability), as required under settled law. (Id. at pp. 1190-
1191.) The court reasoned that “[i]ncorporating the possibility of
a future rule by reference simply doesn’t even meet the basic
requirements for a valid incorporation by reference under simple
state contract law,” because “what is being incorporated
must actually exist at the time of the incorporation,” and “to have
a valid incorporation by reference, the terms of the document
being incorporated must be ‘“‘known or easily available’”’ to the
contracting parties.” (Id. at p. 1194.)
Gilbert is inapposite for multiple reasons. First, the
arbitration agreement in this case did not incorporate by
reference “the possibility of a future rule” that did not yet exist.
(Gilbert, supra, 174 Cal.App.4th at p. 1192.) The Employment
Arbitration Rules existed long before parties’ arbitration
agreement. And the rules were readily available to the parties;
had Serrano looked for the AAA’s “employment rules” as provided
in the agreement—or even if she had looked only for the National
Arbitration Rules—she would have found the Employment
Arbitration Rules as the AAA’s then-current employment rules
22
(as well as the provision that the rules would apply where the
agreement named the National Arbitration Rules instead).
Moreover, Gilbert involved the question whether an arbitration
agreement was clear and unmistakable in delegating to the
arbitrators jurisdiction to decide their own jurisdiction (and
arbitrability). (Id. at p. 1190.) In this case, the trial court
determined the arbitrator’s jurisdiction over Serrano’s claims and
whether the arbitration agreement was enforceable. The
arbitrator simply determined which rules were applicable to the
proceeding based on his “‘factual findings and contractual
interpretation.’” (Heimlich, supra, 7 Cal.5th at p. 358.)
2. The arbitrator’s interpretation of Rule 4 to apply the
statutes of limitations in the applicable California
codes was not clear error
Serrano contends the arbitrator exceeded his powers by
misconstruing Rule 4 to find that FEHA’s one-year filing deadline
(Gov. Code, § 12965) and the two-year statute of limitations
applicable to a nonstatutory cause of action for wrongful
termination (Code Civ. Proc, § 335.1) applied to her arbitration
demand, warranting dismissal of her claims. Because the parties
did not agree to enhanced judicial revie