Munger, Tolles & Olson secured a win today in federal court in California on behalf of Eclipse Senior Living in a significant case with implications for companies sued as joint employers in instances in which the primary employer has an arbitration agreement.
 
The firm secured a complete victory in U.S. District Court for the Southern District of California on a motion to compel arbitration thereby essentially defeating a nationwide collective action and a California class action in Taylor v. Eclipse Senior Living, Inc. What makes the case particularly novel is that the arbitration agreement itself did not list Eclipse Senior Living as the party to the arbitration agreement, and instead used the trade name of the company (Elmcroft Senior Living) which is also the name of another company from which Eclipse took over operations and the trade name. 
 
While the plaintiff argued that Eclipse could not enforce the agreement because it was between Elmcroft and the plaintiff, the court disagreed and held that it could because Eclipse had obtained a fictitious business registration to use the trade name and had used the trade name and not the formal corporate name of the acquired entity, it could enforce the agreement.
 
Significantly, the court held that the two other defendants and alleged joint employers could enforce the agreement under an equitable estoppel theory even though they were not parties to the arbitration agreement at all.  Specifically, the court held that even though two other entities were not specifically listed in the agreement, they too could enforce the arbitration agreement and class/collective waiver because they were being sued on effectively the same claims as Eclipse.
 
The Munger, Tolles & Olson team included firm co-managing partner Malcolm A. Heinicke, partner Margaret G. Maraschino and associate Brandon R. Teachout. You can find the judge’s order attached. The case is Jennifer Janet Taylor v. Eclipse Senior Living, Inc.; Eclipse Portfolio Operations LLC; and EC OPCO CA Partner V LLC. The case number is 20cv190-LAB (WVG).