by Mark I. Schickman

An exotic dancer’s wage and hour complaint against her employer was ultimately resolved after dueling arguments over which party lost track of the clock and who waived their right to challenge an arbitration decision. The court gives a clear answer to this puzzle.

Are Exotic Dancers Employees or Independent Contractors?

Between June 2016 and May 2017, Aisha Darby worked as an exotic dancer at the Xposed Gentlemen’s Club in Canoga Park, California. In her “entertainment agreement,” she agreed to arbitrate “any controversy, dispute, or claim . . . arising out of this agreement.” At the time, the club was owned and operated by Sisyphian, LLC.

In January 2018, Darby sued Sisyphian for:

• Failure to pay minimum wage;
• Failure to pay overtime wages;
• Failure to pay wages for missed meal periods;
• Failure to pay wages for missed rest breaks;
• Waiting time penalties;
• Failure to provide accurate wage statements; and
• Unfair competition.

In May 2018, the trial court granted Sisyphian’s request to compel arbitration of Darby’s claims.

After three days of hearings in October 2019, as well as lengthy briefing, the arbitrator issued an “interim arbitration award.” The arbitrator ruled Darby was an “employee” (rather than an independent contractor) of Sisyphian, that the company hadn’t complied with its duties under the labor code to pay her the minimum wage and overtime wages, to give her rest and meal breaks, and to provide her accurate wage statements, and that it owed her $23,347.25 in damages and penalties for its noncompliance. The arbitrator declined, however, to award her the nearly $40,000 she sought as alleged customer gratuities or any restitution.

Multiple Awards Regarding Attorneys’ Fees

The interim award invited the parties to file requests seeking attorneys’ fees and costs. After more extensive briefing, the arbitrator issued an order in September 2020 denying both requests for attorneys’ fees and costs.

The arbitrator cited two reasons for denying Darby’s request for attorneys’ fees: (1) he accepted Sisyphian’s representation—to which she didn’t respond in her reply brief—that her requests for attorneys’ fees in her complaint had been stricken in their entirety, and (2) he found she had made no attempt to apportion her attorneys’ fees between the claims on which she had prevailed and those on which she had not. The arbitrator asked the company to prepare a final arbitration award.

Eight days after the arbitrator issued the initial attorneys’ fees order, Darby filed a request asking him to use his “inherent authority” to reconsider the order because Sisyphian’s representation that all attorneys’ fees allegations had been stricken from her complaint was inaccurate.

After considering further briefing, the arbitrator granted Darby’s request, citing the company’s inaccurate representations and her failure to point out the inaccuracy. The arbitrator concluded her complaint still contained a viable request for attorneys’ fees for the claims on which she prevailed.

The court then ordered “an entirely new round of briefing,” after which the arbitrator issued a revised order that awarded Darby $82,800 in attorneys’ fees (out of the $283,941.25 she sought). On March 5, 2021, the arbitrator issued his “final arbitration award.”

Know What You Can Do with that Arbitration Award?

That means of dealing with an arbitration award is set forth in detail in the California Arbitration Act. The parties can petition a trial court to issue one of two orders with regard to the arbitration award: (1) an order confirming the arbitration award, which converts the arbitrator’s unchanged award into an enforceable judgment, or (2) an order vacating or correcting the arbitration award, which alters the award’s substantive findings—an order that may be issued only upon one of the very limited bases for correcting or vacating an award set forth in the Act.

The time limit for a petition to confirm an award is four years after the award is issued. But the time limit for a petition to correct or vacate an award is much shorter. That petition needs to be filed within 100 days of being served with the arbitration award. When responding to a petition to confirm the award, however, the petition to correct or vacate must be made within 10 days.

On March 24, 2021, Darby filed a petition in the trial court to confirm the final March 5 arbitration award. She served the petition to Sisyphian via e-mail on April 1. On May 3, the company filed and served two documents: (1) a response to her petition to confirm and (2) a petition to vacate or correct the award.

In each of the nearly identical filings, Sisyphian argued the arbitrator had exceeded his powers by reconsidering his initial attorneys’ fees award, so the final award giving Darby $82,800 in such fees had to be vacated.

After further briefing and a hearing, the trial court issued a ruling (1) denying Sisyphian’s petition to vacate or correct the award and (2) confirming the award. In its order, the trial court found the company’s “papers” weren’t “timely” because they missed the statutory deadline. Without making any finding that the company had “good cause” to excuse its untimely filings, the court nevertheless went on to explain why, on the merits, “the result [of its order] would be the same . . . even if [Sisyphian’s] papers were timely.” Specifically, the court found no merit to the company’s argument that the arbitrator made an error of fact or law exceeding his powers.

Following entry of judgment for Darby in the amount of $105,109.75, Sisyphian timely appealed.

Strict Time Deadlines After an Arbitration Award

The conclusion of the arbitration process—and the post-arbitration process of having an award confirmed, modified, or vacated—has strict rules and deadlines. Here, both parties invoked the strict rules of timeliness.

One such rule is that an arbitrator cannot reconsider a final award—once the award is made, the arbitrator loses jurisdiction. As the court here noted, once an arbitrator issues an “award” within the meaning of the Act, the “torch of jurisdiction” passes “from the arbitrator to the trial court.” Therefore, Sisyphian complained that after the arbitrator issued his order denying everybody’s claims for attorneys’ fees, he had no jurisdiction to reconsider the ruling—the doctrine known as functus officio. The second order, said Sisyphian, was too late.

To the contrary, said the court of appeal, it was Sisyphian that was too late in its request to vacate the arbitration award.

Deadlines for Confirming or Vacating an Arbitration Award

Sisyphian had 10 days after it was served with the petition to confirm the final arbitration award to ask the trial court to vacate or correct the award. But the company waited 32 days—from April 1 until May 3—to file its standalone petition and its response to Darby’s petition. The filings were untimely.

The court of appeal stated a bright-line rule. If a petition to confirm an arbitration award is procedurally proper, there’s no attempt to dismiss the petition, and there’s no timely petition seeking to vacate or correct the arbitration award, then the trial court is obligated to confirm it. The court stressed the statutory language that a trial court “shall” confirm the award.

As if the rulings couldn’t get worse for Sisyphian, the court of appeal also awarded Darby attorneys’ fees on appeal. Aisha Darby v. Sisyphian, LLC, B314968, California Court of Appeal, Second District. Division Two, Filed 1/26/23.

Bottom Line

This case is one more reminder that arbitration deadlines create many traps for the unwary. In the interest of finality of judgment, a petition to correct or vacate an award must be filed quickly, or the right to do so is lost. Sisyphian seems to have a strong argument that the arbitrator exceeded his powers by revisiting an attorneys’ fees award he had already made, but the argument never saw the light of day because the company was late in raising it.

Secondly, the case should remind you not to take extreme litigation measures over an $82,000 issue, the amount of the award about which Sisyphian complained. At the end of the day, the price tag was likely more than it expected—but that might be par for the course in a case involving an exotic dancer and a gentlemen’s club.

Mark I. Schickman is Editor of the California Employment Law Letter and the founder of Schickman Law in Berkeley, California. Mark has successfully litigated almost every type of employment case in the courts before juries and administrative agencies and on appeal and is a popular and engaging trainer providing employment advice to employers across the country. He can be reached at Mark@SchickmanLaw.com.