Successfully Enforced Arbitration Agreement on behalf of Non-Signatory Sister Entity

Court: Superior Court of California, Los Angeles County

A former employee sued his former employer, as well as the employer’s commonly-owned sister company, for wrongful termination. The trial court denied the sister company’s effort to compel arbitration, on the ground that the sister company was not a signatory to the arbitration agreement between the employee and the employer. The Court of Appeals reversed, holding that a sister company can compel arbitration of claims that were subject to the arbitration agreement between the signatories to the arbitration agreement.