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California Supreme Court to Review Class Action Arbitration Waivers in Employment Agreements

As we have been predicting, the issue of class action arbitration waivers has made its way to the California Supreme Court. On Sept. 20, 2012, the Supreme Court granted review of Iskanian v. CLS Transportation of Los Angeles (“Iskanian”), following the Court of Appeal’s decision affirming an order granting the employer’s motion to compel individual arbitration and dismissing the employee’s class claims.

Presently, the case will involve three issues:

1. Did AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), impliedly overrule Gentry v. Superior Court, 42 Cal. 4th 443 (2007)?

2. Does the United States Supreme Court’s decision in Concepcion permit arbitration agreements to override the statutory right to bring representative claims under the Labor Code’s Private Attorneys General Act of 2004?; and

3. Did the employer waive its right to compel arbitration?

Notably absent from the Court’s statement of the issues presented by Iskanian is whether the D.R. Horton decision by the National Labor Relations Board will continue to protect employees’ right to bring class claims as a form of concerted activity under Section 7 of the National Labor Relations Act. The Court of Appeal in Iskanian had affirmed the trial court’s opinion that D.R. Horton did not apply.

No dates have been set for oral argument. A decision on these issues likely will not come until late next year.


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