Employers supplementing their workforce with temporary workers may be out of luck if they wish to rely on arbitration agreements between the temporary helper and the staffing provider.
In Soltero v. Precise Distribution, Inc., Case No. CIVSB2203669 (May 18, 2024), the California Court of Appeal held that a non-signatory employer cannot compel arbitration in reliance on an arbitration agreement between a temporary helper and a staffing provider in the absence of certain conditions. The court rejected the two most common bases for third-party enforcement: (1) equitable estoppel and (2) third-party beneficiary. In reaching its holding, the court ruled that a non-signatory employer cannot compel arbitration where: (1) the plaintiff’s claims against the non-signatory defendant are not based on the terms of the contract containing the arbitration agreement, (2) the staffing provider is not a party to the lawsuit, or (3) the non-signatory is not explicitly identified as a beneficiary in the agreement. Background Facts Real Time, a temporary staffing agency, placed the plaintiff, Nelida Soltero, on assignment with Precise Distribution from October 2017 through January ...