by Robert Jones, Esq.
The California Supreme Court has ruled that arbitration agreements are not enforceable if they require employees to arbitrate wage claims before they have a nonbinding administrative hearing before the State Labor Commissioner.
The decision was a close one, with four justices forming the majority, while three justices dissented.
The state high court held that any preclusion of an employee’s right to a so-called “Berman hearing” violates public policy and is, therefore, unconscionable. The court also found that nothing in the Federal Arbitration Act (FAA) pre-empted its decision.
The case is Sonic-Calabasas A, Inc. v. Moreno (No. S174475, California Supreme Court, 2011).
Arbitration, not court
Frank Moreno was employed by Sonic-Calabasas A, Inc., which owns an Acura dealership. Moreno signed an agreement that required both parties to submit to binding arbitration in all employment disputes.
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