Employment Arbitration Clauses Upheld by CA Supreme Court

Audet & Partners, LLP reports that on June 23, 2014, the California Supreme Court upheld the enforceability of mandatory arbitration clauses in employment contracts that, in most cases, effectively deprive employees of the right to bring class action lawsuits against their employers for legal violations in the workplace.  The case, Iskanian v. CLS Transportation Los Angeles, LLC, No. S204032, overturned earlier opinions that had held the arbitration clauses to be unenforceable.

The Court in Iskanian, however, carved out one exception that would preclude the enforceability of arbitration clauses in employment agreements.  When a worker seeks to bring an action pursuant to the California Private Attorneys General Act of 2004 (“PAGA”), the arbitration clause will not be enforced.  In PAGA actions, the individual in theory is bringing a claim to enforce the rights of a class of workers in the face of the California Labor Code, and thus the action is considered quasi-governmental in nature.  The Court held that enforcing an arbitration in this scenario would be contrary to public policy and should not be allowed.

If you believe your employment rights have been violated by your employer, you are urged to contact an employment rights lawyer at Audet & Partners, LLP for a free, confidential consultation.  You can contact us either by calling (800) 965-1461, or by completing and submitting our confidential inquiry form on the right side of this page.