Breaking with the National Labor Relations Board’s ruling that arbitration agreements containing class waivers can violate federal labor law, the California Court of Appeal recently held that an arbitration agreement precluding class arbitration was not unconscionable, nor would enforcing it violate California state law, federal law or public policy.
Arbitration Agreements
California Court Approves Class Action Waivers In Employment Arbitration Agreements
By Laura Reathaford on
The plaintiff in Iskanian v. CLS Transp. Los Angeles, LLC, brought a putative class action and a representative action under California’s Private Attorney General Act (PAGA) for various wage and hour violations. During his employment, Iskanian agreed that he would not assert class action or representative action claims against his employer and, instead, agreed to submit any legal claims he had to binding arbitration.
The California Court of Appeal for the Second District held that the employee was bound by his agreement. Relying on the United States Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion, the Court held that the Federal Arbitration Act (FAA) preempts any state law prohibiting class action waivers in arbitration agreements. The Court also found that Concepcion overruled Gentry v. Superior Court – a California Supreme Court decision which held that class action waivers in arbitration agreements are unenforceable if class arbitration would be more efficient than individual litigation. Rejecting this notion, the Court stated, “a rule like Gentry – requiring Courts to determine whether to impose class arbitration on parties who contractually rejected it – cannot be considered consistent with the objective of enforcing arbitration agreements according to their terms.”
California Court Holds that Representative PAGA Claims Are Not Subject to Mandatory Arbitration
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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. 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).
State Limitations On Arbitration Agreements Are Preempted By Federal Law
By Tony Oncidi on
AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011)
In this landmark new opinion, the United States Supreme Court held that the Federal Arbitration Act (“FAA”) prohibits states from conditioning the enforceability of an arbitration agreement on the availability of class action arbitration procedures. Although this case arose in the consumer context (it involved AT&T’s charging sales tax for “free phones”), it has far-reaching…
U.S. Supreme Court Tips the Scales Back Toward Arbitration
By Proskauer Rose on
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.
California Supreme Court Expands Judicial Review of Employment Arbitration Awards
A recent decision by the California Supreme Court could have resounding implications for the enforceability of arbitration awards – a matter of great concern in employment law given the prevalence of arbitration agreements governing employment relationships – and opens the door for employees to petition the courts to compel arbitrators to decide the merits of their statutory claims.
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Unionized Employees Were Required To Arbitrate Age Discrimination Claims
By Tony Oncidi on
14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 129 S. Ct. 1456 (2009)
Plaintiffs, members of the Service Employees International Union (the “SEIU”), filed a complaint with the EEOC alleging age discrimination under the Age Discrimination in Employment Act and, after receiving their right-to-sue letters, filed suit against their employer alleging age discrimination. In response, the employer filed a motion to compel arbitration…
Supreme Court Endorses Union-Negotiated Arbitration of Discrimination Claims
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.