Norris v. Aon PLC

Background

Gisele Norris and Henry Yuan sued Aon PLC, Aon Group, Inc., and Aon Risk Services Companies, Inc. They sought declaratory and injunctive relief concerning agreements they signed while employed by Aon. They alleged that the Restricted Stock Unit Agreements they both signed, and the Confidentiality and Non-Solicitation Agreement Yuan signed, contained void, illegal, and unenforceable provisions, including restrictive covenants.

The Court had previously denied Norris and Yuan’s motion for a preliminary injunction and granted Aon’s motion to compel arbitration. Norris and Yuan then sought reconsideration of that order. The Court had allowed them to file the reconsideration motion, but denied it in this order.

California Labor Code Section 925

Norris and Yuan argued that the agreements delegating questions about arbitration to an arbitrator violated California Labor Code section 925. They said the agreements required them, as a condition of employment, to pursue their claims outside California and deprived them of California’s substantive legal protections.

The Court stated that section 925 applies only to agreements that are conditions of employment. In the earlier arbitration order, the Court had noted that Norris and Yuan did not dispute Aon’s assertion that employees were free to accept or reject the Restricted Stock Unit Agreements, meaning those agreements were not conditions of employment. The Court had also concluded that Norris and Yuan had forfeited an argument that the delegation provisions were invalid because the agreements were conditions of employment.

The Court declined to consider the argument because Norris and Yuan had not raised it in opposition to the motion to compel arbitration and had not raised it in their motion for reconsideration. They raised it only in their reply, which referred to a reply filed in support of the preliminary-injunction motion.

California Public Policy

Norris and Yuan argued that an Illinois choice-of-forum provision in the delegation agreements was unenforceable under California public policy. The Court found that they had not raised this argument in opposition to the motion to compel arbitration. Instead, they had argued only that the choice of forum made the broader arbitration agreements invalid, not that it invalidated the more specific delegation agreements.

The Court therefore concluded that the argument had not been timely raised. It stated that Norris and Yuan could raise arguments about the broader arbitration agreements before the arbitrator, consistent with the delegation agreements.

Savings Clause

Norris and Yuan also argued that a savings clause in the arbitration agreement did not make the delegation agreements enforceable. The Court declined to reconsider its prior order on that ground for two reasons. First, the order compelling arbitration rested on several independent grounds, so the savings-clause issue was not decisive. Second, the Court said the savings clause reinforced that the validity of the Illinois choice-of-law provision was a gateway question for the arbitrator under the delegation agreement.

Disposition

The Court concluded that nothing in the motion persuaded it to reconsider the prior order and denied Norris and Yuan’s motion for reconsideration. The order does not change the earlier rulings denying the preliminary injunction and compelling arbitration.