A significant legal battle has unfolded as a major home improvement retailer faces allegations of employment discrimination and other serious claims. On June 27, 2024, Melinda Cortez filed a complaint against Lowe’s Home Centers, LLC in the Superior Court of Los Angeles County.
The case centers around Cortez's decision to opt out of an arbitration agreement with her employer, Lowe’s. Cortez began working for Lowe’s in November 1998 and was presented with an "Agreement to Arbitrate Disputes" (AAD-1) in 2017. This agreement allowed employees to opt out without facing any adverse consequences. Cortez signed and returned the opt-out form on May 1, 2017. However, three days later, she accepted a promotion that included another arbitration agreement (AAD-2), which had similar terms but required another opt-out within 30 days of accepting the promotion.
Cortez did not submit another opt-out form after her promotion on May 4, 2017. In March 2022, she sued Lowe’s for employment discrimination, harassment, retaliation, failure to promote, failure to prevent discrimination and harassment, and infliction of emotional distress. She sought both monetary damages and injunctive relief to prevent future misconduct by the defendants.
Lowe’s moved to compel arbitration based on Cortez's acceptance of the promotion offer that included AAD-2. They argued that her initial opt-out was ineffective for the new agreement included in her promotion offer. However, Cortez contended that her original opt-out should still be valid as it occurred within 30 days of accepting the promotion.
The trial court sided with Cortez, finding that there was no mutual assent to arbitrate disputes because she had effectively opted out within the required timeframe. The court noted ambiguities in AAD-2 regarding its impact on prior opt-outs and the timing requirements for submitting an opt-out form.
The court ruled that Lowe’s failed to prove the existence of a valid arbitration agreement by a preponderance of evidence. The judge emphasized that while there is a strong policy favoring arbitration agreements, there is no compulsion for individuals to accept arbitration if they have not agreed to it explicitly.
Representing Lowe’s were attorneys from Seyfarth Shaw: Jonathan L. Brophy, Sumithra R. Roberts, and Kiran A. Seldon. Michael C. Martinez from Michael Martinez Law represented Cortez. The case was presided over by Judge Theresa M. Traber under Case ID B321909.