On December 29, 2022, the First Department issued a decision in Matter of Dentons US LLP v. Zhang, 2022 NY Slip Op. 07498, holding that whether a law firm partner was an employee for the purposes of Section 925 of the California Labor Code, which limits out-of-state arbitrations, was a question for the arbitrator to decide, explaining:
Contrary to respondent’s contention, the law firm partnership agreement between the parties contains a clear and unmistakable delegation clause that delegated questions of arbitrability to the arbitrator. The agreement’s arbitration provision, which stipulated Chicago or New York as the place for arbitration, applies to all disputes of any kind, and incorporates the rules of the CPR, including the rules that give CPR arbitrators the power to rule on their own jurisdiction to decide what, if any, issues are not to be decided by the arbitrator. The Delaware law pursuant to which the partnership agreement was constructed does not support a contrary finding.
Given that full delegation, Supreme Court, which has personal jurisdiction over respondent in this proceeding based on his agreement to arbitrate in New York, was not, prior to addressing the petition and motions, required to first determine whether respondent, a former law firm equity partner, was an employee protected by section 925 of the California Labor Code such that he may seek to void the arbitration provision insofar as it required him to arbitrate the underlying disputes outside of California. That is an issue delegated for a decision by the arbitrator. To the extent that issue, which was raised and decided in expedited fashion, has not been squarely decided by the emergency arbitrator, or otherwise been addressed by a CPR arbitrator or tribunal, Supreme Court’s grant of the motion to compel arbitration is without prejudice to respondent’s ability to raise the issue before the arbitration panel or tribunal.
(Internal quotations and citations omitted).