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California Supreme Court to weigh class-action waivers

by on
in Employment Law,Human Resources

The California Supreme Court has agreed to review a case that enforced a class-action waiver and required a limousine driver to arbitrate his wage-and-hour claims. Seven justices voted to review Iskanian v. CLS Transp. Los Angeles LLC, a California Court of Appeal decision holding that the Federal Arbitration Act “conclusively invalidates” a decision that ruled a class-action waiver could be unconscionable under California law.

The court will decide whether the U.S. Supreme Court’s 2011 AT&T Mobility LLC v. Concepcion case overruled a 2007 California case (Gentry v. Superior Court) in the context of nonwaivable labor law rights. It will also consider whether Concepcion permits arbitration agreements to override the statutory right to bring representative claims under California’s Private Attorneys General Act.

Note: The Supreme Court’s Concepcion decision allows employers to use arbitration agreements, but state courts often require contracts to be fair. Agreements that are too one-sided often cross the line into what state courts call “unconscionable contracts.” Under common law, unconscionable contracts are not enforceable.

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