Neiman Marcus won a partial victory in its appeal of a lawsuit brought by a Fashion Island jewelery department salesperson who claims she was wrongly fired, unjustifiably fingered as a thief, stiffed out of sales to her return customers and ridiculed for being Muslim.
While agreeing mostly with a trial court's ruling against the department store's idea of arbitration, ex-saleslady Mariam Berri (who ought to consider a run for D.C. mayor) still has some form of conflict settlement in her future following the 2-1 ruling filed Tuesday by the state's Fourth District Court of Appeals in Santa Ana.
Berri originally sued Neiman Marcus and two former co-employees for damages based on her termination at the Newport Beach store. She described herself in the complaint as "a very successful salesperson" in Neiman's fine jewelry department with a loyal clientele of repeat customers. She alleged she was making more than $275,000 annually in commissions at the time things went to merde.
She claimed Neiman had a policy where the first salesperson to make a sale to a particular jewelry customer in effect "owned" that customer, and other salespeople could not sell jewelry to that person in the future. Berri alleged the policy led to disputes with the employees she's now suing--disputes she claims Neiman management always resolved in her colleagues' favor.
Berri blames the animosity from this as being behind accusations in June 2008 that she stole a ring belonging to one of the co-workers named in the suit. Theft reports were filed internally and with the Newport Beach Police Department, resulting in Berri being arrested, charged with a felony and fired from her job. The charges were later dropped.
She sued Neiman for breach of contract, breach of the covenant of good faith and fair dealing , wrongful termination in violation of public policy. Berri also sued Neiman and the two individual employees for defamation, based on the ring incident, and Neiman and one of the individual employees for malicious prosecution, based on her arrest for theft and the subsequent dismissal of the charges against her.
In the lower court, Neiman filed the motion to compel arbitration, claiming that Berri signed an agreement to settle employment disputes via arbitration. But the trial court found conditions of that agreement "ambiguous," "unconscionable" and ultimately "unenforceable." The main basis for that ruling was the "delegation clause" or duties spelled out in the Neiman arbitration pact.
So, Neiman appealed the rejection of the motion, leading to this opinion written by Associate Justice Eileen C. Moore, in concurrence with Associate Justice Kathleen E. O'Leary:
"We agree the delegation clause was ineffective, based on language in another clause in the agreement that rendered it ambiguous. The trial court erred, however, in finding the agreement as a whole unconscionable. The parts of the agreement that led to this conclusion were severable. We therefore reverse and remand, directing the trial court to consider severability issues as appropriate before ordering the case to arbitration."
So, Neiman Marcus will eventually get arbitration, just not the arbitration it originally sought. Berri will have her case decided by an arbiter rather than trial court but at least many terms of the arbitration she opposed will get tossed, such as the Neiman demand that arbitration only take place in the company's home state, Texas. Both the trial and appeals courts rejected that notion.
Dissenting Associate Justice William W. Bedsworth disagreed that there was anything wrong with the delegation clause, found there is nothing ambiguous about the case at all and believed that Neiman's motion to arbitrate under the terms of the original agreement should be granted.
"All of the unconscionability issues identified in the majority opinion are, I believe, for the arbitrator to decide," Bedsworth wrote.
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When it comes to the actual merits of Berri's complaint, the appeals court did find some trouble spots for whoever ultimately decides this turkey, such as the allegation of "wrongful termination in violation of public policy."
"This last claim is somewhat puzzling," read the "Facts" of the appellate decision. "Although Berri alleged that she was terminated because of her 'complaints about harassment, hostile work environment, and the failure of Defendant Neiman to pay her monies to which she was lawfully entitled,' there were no factual allegations of sexual harassment or other harassment or hostility based on a protected category.
"Berri alluded to some comments made by the employees about her Muslim faith, but she did not allege any facts indicating an adverse employment action was against her on account of her religion. She also alleged no Fair Employment and Housing Act (FEHA) or Labor Code causes of action. Apparently Berri's 'public policy' cause of action against Neiman was rooted, like the other two, in the disputes about who 'owned' certain customers and the fallout from these disputes."
Berri is represented by Robert S. Kostrenich of Exodus Law Group in Orange.