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Mercuro v. Superior Court of Los Angeles County2/13/2002
CERTIFIED FOR PUBLICATION
Petitioners Fred and Melissa Mercuro seek a writ of mandate overturning the trial court's order compelling them to arbitrate their employment-related tort claims against Fred Mercuro's former employer, Countrywide Securities Corporation. We issued an alternative writ of mandate. Having considered the parties' further briefing and oral argument, we grant the writ.
FACTS AND PROCEEDINGS BELOW
The material facts are not in dispute.
Fred Mercuro worked in the sales division of Countrywide Securities Corporation from April 1996 to March 2000. After leaving Countrywide, Mercuro filed an action charging it with numerous employment-related torts including age and disability discrimination, fraud, and wrongful termination in violation of public policy. Mercuro's wife joined as a plaintiff in the causes of action for fraudulent inducement and negligent misrepresentation. Countrywide filed a motion to compel the Mercuros to arbitrate all the causes of action in the complaint pursuant to arbitration agreements signed by Fred Mercuro. Melissa Mercuro did not sign either of these agreements.
In order to be employed as a securities broker for Countrywide the Securities and Exchange Commission required Mercuro to apply for a license from the National Association of Securities Dealers (NASD). Accordingly, Mercuro completed and signed the NASD application, commonly known as "form U-4." Form U-4 contains a clause in which the applicant agrees to arbitrate covered disputes arising between him and his firm in accordance with the NASD constitution, by-laws and rules. Countrywide never gave Mercuro a copy of the NASD constitution, by-laws or rules nor did anyone at Countrywide advise him the NASD arbitration agreement required him to arbitrate employment disputes including statutory claims of employment discrimination. Furthermore, Mercuro was unaware of any practice in the industry which required arbitration of employment disputes. He believed he was only agreeing to arbitrate disputes arising from his handling of securities and neither understood nor agreed to arbitrate employment disputes with Countrywide.
In March or April 1997, Countrywide asked all its sales personnel to sign a contract agreeing to arbitrate certain disputes which might arise between them and the company. The agreement covered some employment-related claims including employment discrimination but excluded others such as injunctive or other equitable relief for unfair competition, unauthorized disclosure of trade secrets or violation of intellectual property rights. The agreement contained specific provisions in which the employee acknowledged she "knowingly and voluntarily" waived her right to a jury trial and agreed to certain limitations on her ability to conduct discovery. Countrywide offered its employees 25 shares of its stock or an extra vacation day as consideration for signing the agreement.
Mercuro had several discussions about the Countrywide arbitration agreement with Countrywide's upper management including Jonas Roth, Executive Director of Sales, and David Sambol, Chief Executive Officer. Mercuro told Roth and Sambol he was not going to sign the agreement. He explained the extra vacation day was of no value to him and 25 shares of company stock were inadequate consideration for giving up the right to a jury trial should a dispute arise between him and Countrywide.
Roth told Mercuro he "did not have the option of not signing the agreement." According to Roth, Sambol expected every sales person to sign and "if they did not sign the agreement they would find it difficult to make a living at Countrywide." Roth further stated
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