Below is the first part of an article by Dominique L. Windberg, Jennerifer B. Rubin, Evan Nadel and Michael S. Arnold from mondaq.com. It reads…
The California Supreme Court issued an important decision last week on the enforceability of employment class action waivers included in arbitration agreements. The result: private parties can contract for the waiver of the right to pursue a class action in any forum. The California Supreme Court had considered this question before in 2007 in Gentry v. Superior Court, finding that an employment class action waiver could be struck down on the grounds that it violated public policy or because it was unconscionable. But in Iskanian v. CLS Transportation Los Angeles, LLC, the Court recognized that recent U.S. Supreme Court precedent now required it to reverse course. In doing so, it made some other noteworthy pronouncements as well.
The Issue of Class Active Waivers Makes Its Way Back up to the California Supreme Court
In Iskanian, Arshavir Iskanian worked as a CLS driver and entered into an arbitration agreement with CLS that required him not only to arbitrate any claims he had against the company, but to waive any right he had to bring a class or representative action. But in August 2006, despite this agreement, Iskanian filed a wage and hour class action lawsuit in a California state trial court against CLS. Iskanian also sought to bring a representative action under the Labor Code Private Attorneys General Act, which is commonly known as PAGA, a statute that permits an employee to bring an action to pursue civil penalties on behalf of the state for Labor Code violations, but which limits the employee from retaining more than 25% of any civil penalties levied against the employer.