Finally! The California Supreme Court recently fell in line with the United States Supreme Court on the enforceability of class action waivers in arbitration agreements by upholding their enforceability. Previously, the California Supreme Court had held in Gentry v. Superior Court that class action waivers in employment agreements were invalid in certain circumstances. Subsequently, the United States Supreme Court decided the AT&T Mobility v. Concepcion case, which in effect upheld class action waivers, with the Court reasoning that a state procedure that is incompatible with arbitration is preempted by the Federal Arbitration Act (FAA). But now, with its recent ruling in Iskanian v. CLS Transportation Los Angeles, LLC, the California Supreme Court has agreed that class action waivers in arbitration agreements are indeed enforceable.
There’s still a fly in the ointment, however, because the Iskanian Court ruled that a waiver of a Private Attorneys General Act (PAGA) claim in an arbitration agreement is unenforceable in California as a matter of public policy. Under PAGA, employees can seek Labor Code penalties from employers on behalf of other employees as representatives of the of the State of California, with the majority of penalties recovered going to the State of California and the employees retaining 25% for themselves. The Court reasoned that this decision did not violate the FAA, since the FAA is intended to ensure an efficient forum for the resolution of private disputes and a PAGA claim is more like a public dispute, albeit with a private citizen standing in the shoes of the State of California.
What does all this mean to California employers? It means that employers can include class action waivers in arbitration agreements with employees, and employers should review any arbitration agreements with this in mind. Individuals signing such waivers face a substantial obstacle if they bring a class action suit against an employer for alleged violations of such issues as overtime, meal and other breaks, and wage and hour claims, etc. However, considering that the California Supreme Court has deemed any waiver of a PAGA claim in favor of arbitration to be unenforceable, the revised waiver will have to be limited in scope.
This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP. It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked. So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again. This is commentary, people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing. No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits). But feel free to contact us with your questions and comments—who knows, we might even answer you. And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry). Big news: Copyright 2014. All rights reserved; yep, all of them.
If you have any questions about this article, contact the writer directly, assuming he or she was brave enough to attach their name to it. If you have any questions regarding this blog or your life in general, contact Kelly O. Scott, Esq., commander in chief of this blog and Head Honcho (official legal title) of ECJ’s Employment Law Department, at (310) 281-6348.
- Partner
Kelly Scott is a partner and head of the firm’s Employment Law Department.
Mr. Scott is also a member of the Litigation Department and has practiced law since 1987. His areas of practice include representation of employers in all ...
Subscribe
Recent Posts
- New Cal/OSHA Indoor Heat Standards Require New Prevention Measures and Written Prevention Plan | By: Joanne Warriner
- California Bans All Plastic Bags at Grocery Stores | By: Pooja S. Nair
- FTC’s Nationwide Ban on Non-Compete Agreements Stopped by Federal Court Ruling | By: Cate A. Veeneman
- Can the IRS Obtain a Receiver to Help Collect Taxes Owed? | By: Peter Davidson
- Severing Unconscionable Terms in Employment Arbitration Agreements | By: Jared W. Slater
- Can You Collaterally Attack a Receiver’s Appointment?
- Changes to PAGA Create Opportunities for Employers to Minimize Penalties | By: Tanner Hosfield
- Overbroad Employment Arbitration Agreements Will Not Be Enforced in California | By: Jared W. Slater
- LA Al Fresco Deadline Extended | By: Pooja S. Nair
- The Battle for Supremacy: Federal Arbitration Act v. California Arbitration Act | By: Jared W. Slater
Blogs
Contributors
Archives
- October 2024
- September 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- March 2019
- February 2019
- January 2019
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014