The U.S. Court of Appeals for the Ninth Circuit affirmed a district court ruling that lifted a stay pending arbitration in *Rafique v. Premier Financial Alliance, Inc.*, an employment dispute that highlights the obligations employers face when they require workers to arbitrate claims.
The three-judge panel issued an unpublished memorandum decision on Jan. 21 in the case involving plaintiffs Aneela Rafique, John Soo-Hoo, and Haidee Collado against Premier Financial Alliance, Inc., a Georgia corporation, along with individual defendants David Carroll and Jack Wu. The decision came after the case was submitted without oral argument in December.
The dispute originated in the U.S. District Court for the Northern District of California, where Judge Jon S. Tigar presided over the matter. The district court had granted the plaintiffs' motion to lift a stay that had been imposed pending arbitration proceedings.
The Ninth Circuit's decision centered on fundamental principles governing arbitration under the Federal Arbitration Act. The court emphasized that while parties have the right to choose the rules governing their arbitration proceedings, employers who mandate arbitration for their employees must actively participate in the process or risk losing their right to compel arbitration.
"Parties have the right under the FAA to choose the rules under which their arbitration will be conducted," the court wrote, citing *Tillman v. Tillman* (9th Cir. 2016). However, the opinion also noted a crucial caveat: "when an employer enters into an agreement requiring its employees to arbitrate, it must participate in the process or lose its right to arbitrate," referencing *Brown v. Dillard's, Inc.*
The case underscores the balance courts must strike between enforcing arbitration agreements and ensuring that parties who demand arbitration fulfill their corresponding obligations. When employers require workers to resolve disputes through arbitration rather than in court, those employers cannot then fail to engage meaningfully in the arbitration process they insisted upon.
Premier Financial Alliance, Carroll, and Wu had appealed the district court's decision to lift the arbitration stay. The company, which operates in the financial services sector, apparently sought to maintain the stay that would have kept the case from proceeding in federal court while arbitration was pending.
The timing of the proceedings reflects the typical pace of federal appellate litigation. The case was filed in district court in 2023, as indicated by the case number 4:23-cv-00732-JST. The appeal reached the Ninth Circuit in 2025, where it was assigned case number 25-586 and submitted to the panel in December before the January decision.
The panel that decided the case consisted of Circuit Judges Johnnie B. Rawlinson and Maria-Elena James, along with Chief District Judge Jennifer G. Zipps of the District of Arizona, who was sitting by designation. The court unanimously concluded the case was appropriate for decision without oral argument, as permitted under Federal Rule of Appellate Procedure 34(a)(2).
This memorandum disposition, while not appropriate for publication and not establishing binding precedent except as provided by Ninth Circuit Rule 36-3, nevertheless provides guidance on how courts will handle situations where employers fail to meet their arbitration obligations.
The decision has implications for employment law practitioners and employers who use arbitration clauses in their agreements with workers. It reinforces that arbitration is a two-way street—employers cannot simply use arbitration requirements as a shield while failing to participate meaningfully in the process.
For employees facing mandatory arbitration clauses, the ruling suggests that courts will not allow employers to manipulate the arbitration process by failing to engage properly while still seeking the benefits of having disputes resolved outside the court system.
The case also reflects broader trends in employment litigation, where arbitration clauses have become increasingly common but courts continue to scrutinize whether these agreements are being implemented fairly and in good faith by all parties.
While the specific details of the underlying employment dispute between the plaintiffs and Premier Financial Alliance were not detailed in the available portions of the opinion, the procedural ruling addresses fundamental questions about the enforcement of arbitration agreements in employment contexts.
The affirmance means the case will proceed in district court rather than being stayed pending arbitration, giving the plaintiffs the opportunity to pursue their claims in federal court. For Premier Financial Alliance and the individual defendants, the decision represents a setback in their efforts to move the dispute to arbitration.
The ruling adds to the body of Ninth Circuit precedent governing arbitration in employment disputes and provides another example of courts holding employers accountable for their conduct in arbitration proceedings they themselves mandate.