California Employment Law Update : Labor and Employment Lawyers & Attorneys : Proskauer Rose Law Firm : Wage & Hour Laws, Disability, Workplace Safety

In a 2-1 decision, the California Court of Appeal held that representative actions under California’s Private Attorney General Act (PAGA) may not be waived in mandatory, pre-dispute employment arbitration agreements. (Brown v. Ralphs Grocery Co., Cal. Ct. App., No. B222689 [pdf]). This decision comes as something of a surprise in light of the U.S. Supreme Court’s recent ruling in AT&T Mobility, LLC v. Concepcion (2011) 563 U.S. __, 131 S. Ct. 1740 [pdf], which held that the Federal Arbitration Act (FAA) preempts state law and that class-action waiver provisions in California consumer arbitration agreements are generally enforceable (see prior blog post).

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In a ruling that has garnered significant interest among employers, the U.S. Supreme Court held on Wednesday that the Federal Arbitration Act (FAA) preempts the California Supreme Court’s efforts to impose heightened unconscionability standards on class action waivers in consumer arbitration agreements. This decision may also sound the death knell for similar restrictions imposed by California and other states on arbitration agreements in the employment setting.

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On April 26, the California Supreme Court issued a decision in the case of Pearson Dental Supplies, Inc. v. Superior Court (S167169) that will likely have resounding implications for the enforceability of arbitration awards.  The case concerns an arbitration decision in which an employee’s age discrimination claim was dismissed as untimely.  The arbitration agreement in question required the employee to initiate arbitration of his claims within one year.  However, rather than proceeding to arbitration, the employee first pursued his claims with the California Department of Fair Employment and Housing (DFEH) and subsequently in the Superior Court.  By the time the employee had finally submitted his claims to binding arbitration, more than one year had passed since his termination, and the arbitrator dismissed the action.

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Proskauer Prevails As The Court Holds That Collectively Bargained Agreements for The Arbitration of Statutory Discrimination Claims are Enforceable

On April 1, 2009, the United States Supreme Court, in a 5-4 decision, ruled in favor of Proskauer Rose’s client 14 Penn Plaza LLC, holding that a collective bargaining agreement (“CBA”) that clearly and unmistakably requires union members to arbitrate Age Discrimination in Employment Act (“ADEA”) claims is enforceable as a matter of federal law. The Court’s decision validates the right of an employer and a union to negotiate about the way disputes can be resolved, even when those disputes involve individual statutory rights. Accordingly, 14 Penn Plaza LLC. v. Pyett, is significant to all employers who have collective bargaining relationships.

Proskauer negotiated the CBA at issue on behalf of the Realty Advisory Board on Labor Relations, Inc., (“RAB”) and handled this litigation on behalf of 14 Penn Plaza — from the district court through argument of the matter before the Supreme Court by Paul Salvatore, co-chair of Proskauer’s Labor and Employment Law Department.

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