The LA Clippers (“Clippers”) are facing a civil suit with employment-related claims. The Los Angeles Superior Court will be ruling on the Clippers’ motion to compel arbitration in the latest development.

Background and Dispute

Plaintiff, a former strength and conditioning coach, filed suit against the Clippers, alleging a litany of claims.[i] Among those claims were allegations of wrongful termination, whistleblower retaliation, violations of the Labor Code and the Fair Employment and Housing Act (FEHA), and retaliation and interference with leave under the California Family Rights Act (CFRA).[ii]

Plaintiff alleged further retaliation after expressing concern over the Clippers’ management of their star forward, Kawhi Leonard, including his medical care and treatment.[iii] In response, the Clippers filed a motion to compel arbitration (“motion”) under the terms of the employment agreement between the Clippers and plaintiff (“agreement”).

The Arbitration Question

The agreement includes a clause that parties agree to apply the Federal Arbitration Act (FAA) rather than California arbitration law.[iv] Whether the court will compel arbitration under the FAA depends on (1) whether the arbitration provision is valid and (2) whether it covers this dispute.[v]

The Clippers argued the arbitration provision was valid because it was not a product of coercion.[vi] Plaintiff was not given a time limit to execute the agreement, nor was he prevented from having private counsel review it.[vii]

The Clippers further argued the agreement included:

“[p]laintiff’s broad agreement to submit to binding arbitration ‘any and all controversies, claims, or disputes with anyone (including the Team and any employee, officer or director of the Team), arising out of, relating to, or resulting from Employee’s employment with the Team or the termination of Employee’s employment with the Team.’”[viii]

Even though the agreement was between plaintiff and the Clippers, its President of Basketball Operations was entitled to invoke the arbitration clause as an intended third-party beneficiary. His role was expressly delineated in the arbitration clause as an “employee, officer or director of the Team.”[ix]

The lawful arbitration of employment-related claims requires an arbitration agreement to (1) provide for neutral arbitrators, (2) provide for more than minimal discovery, (3) require a written award, (4) provide for all relief available in court, and (5) only allow for reasonable costs, arbitrators’ fees and expenses.[x]

Analysis

It appears the agreement covers plaintiff’s claims. Plaintiff’s causes of actions are asserted under the California Labor Code, FEHA, CFRA, and California common law. All incidental facts and allegations surrounding the claims arise out of or are related to plaintiff’s employment and termination by the Clippers.[xi]

Of significance, as quoted above, the agreement’s arbitration clause includes language covering plaintiff’s claims as well as additional explicit language including “any statutory claims under local, state, or federal law, including, but not limited to, claims under … [FEHA], the [CFRA], the California Labor Code, claims of harassment, discrimination, retaliation and wrongful termination, and any statutory or common law claims.”[xii]

If the alleged facts are established, the Clippers’ motion should be granted. Both parties voluntarily entered the agreement. As such, both parties agreed to the arbitration clause. The arbitration clause was invoked by a signatory to the agreement who is also an intended-third party beneficiary.

The arbitration clause appears to meet all requirements for lawful arbitration of employment-related claims. Lastly, because the facts arose out of plaintiff’s employment and/or termination by the Clippers, and the arbitration clause explicitly identified statutory claims under local, state, or federal law, the arbitration clause covers plaintiff’s claims.

Takeaways

Arbitration within employment agreements should be as explicit and clear as possible. This includes identifying the applicable law – whether it be the FAA or state arbitration law. Where the FAA is applied, arbitration agreements for employment-related claims should: (1) provide for neutral arbitrators, (2) provide more than minimal discovery, (3) require a written award, (4) provide for all relief available in court, and (5) only allow for reasonable costs, arbitrators’ fees and expenses. Lastly, the arbitration clause should include clear language identifying not only the covered claims but also the jurisdiction and any applicable statutes.

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Sources

[i] Baxter Holmes, Clippers say ex-staffer sought millions prior to Kawhi claims, ESPN (Jan. 3, 2025, 01:10 PM ET), https://www.espn.com/nba/story/_/id/43273480/clippers-say-ex-staffer-sought-millions-prior-kawhi-claims.

[ii] Plaintiff’s Complaint for Damages at pp. 1-2, Shelton v. LA Clippers LLC, et al. (Los Angeles Sup. Ct. filed Oct. 23, 2024) (No. 24STCV27862).

[iii] Id. at pp. 7-8.

[iv] Defendants’ Notice of Motion and Motion to Compel Arbitration and Stay Proceedings at p. 8, Shelton v. LA Clippers LLC, et al. (Los Angeles Sup. Ct. filed January 2, 2025) (No. 24STCV27862).

[v] Id. [citing Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63, 67-68 (2019); Bielski v. Coinbase, Inc., 87 F.4^th 1003 (9^th Cir. 2023).]

[vi] Id. at p. 8.

[vii] Ibid.

[viii] Id. at p. 10-11.

[ix] Id. at p. 11.

[x] Id. at p. 11 [citing Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal.4^th 83, 102.]

[xi] Id. at p. 12.

[xii] Ibid.