Public policy considerations no longer a bar to enforcement of class action waiver in employment arbitration agreement
AT&T Mobility LLC v. Concepcion (2011) __ U.S.__ [131 S. Ct 1740] changed the legal landscape concerning class arbitrations. The United States Supreme expressly overturned the California Supreme Court ruling in Discover Bank v. Superior Court (2005) 36 Cal.4th 153, which had held that class action waivers in contracts of adhesion subject to arbitration are unenforceable.
A more recent California Supreme Court opinion--Gentry v. Superior Court (2007) 42 Cal. 4th 443--is not referenced in Concepcion. having lead some to believe Gentry is still viable. (See Kinecta Alternative Financial Solutions, Inc v. Superior Court (Malone) (2012) __Cal.App.4th__.) Gentry determined that, under some circumstances, a class arbitration waiver would impermissibly interfere with an employee's ability to vindicate unwaivable rights concerning overtime laws, and that such a waiver was contrary to public policy. The case to be discussed, Iskanian v. CLS Transportation, LLC (filed June 4, 2012) 2012 DJDAR 7371, finds that the Concepcion decision conclusively invalidates Gentry.
Plaintiff Iskanian worked as a driver for the defendant transportation company. After about 9 months of employment, in December 2004 he signed an arbitration agreement that any and all claims arising out of employment would be submitted to binding arbitration and that class claims could not be asserted. The employment concluded in August 2005, and plaintiff filed a break/wage-and-hour class action lawsuit in August 2006. The order appealed from is the trial court's order compelling arbitration and dismissing class claims. Plaintiff claims he can meet the Gentry test to invalidate the class waiver, or alternatively he should not be compelled to arbitrate. The Court of Appeal, Second Appellate District, Division Two found Gentry inapplicable and affirmed.