NCLC joined other consumer and workers’ rights advocates in this case involving equitable estoppel and forced arbitration. The amicus brief explains how an arbitration-specific version of equitable estoppel imposed by some courts to allow non-signatories to enforce an arbitration clause is wholly divorced from the traditional principles and interpretations of the doctrine, which require a showing of detrimental reliance. The brief explains that the Federal Arbitration Act, as clarified by the U.S. Supreme Court in Morgan v. Sundance Inc., prohibits any arbitration-specific rules that favor arbitration contrary to general state-law contract principles. The brief also describes how this bizarre, arbitration-specific equitable estoppel harms workers and consumers — including consumers in debt-collection cases — who are forced to arbitrate their claims against defendants with which they never agreed to arbitrate. This case is pending before the California Supreme Court.
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