Supreme Court of California

In a class action lawsuit brought by plaintiff-employee on behalf of himself and similarly situated employees for defendant-employer's alleged failure to compensate its employees for, among other things, overtime and meal and rest periods, where plaintiff-employee had entered into an arbitration agreement that waived the right to class proceedings: 1) a state's refusal to enforce the waiver on ground of public policy or unconscionability is preempted by the Federal Arbitration Act (FAA); 2) the holding to the contrary in Gentry v. Superior Court (2007) 42 Cal.4th 443 (Gentry) has been abrogated by recent United States Supreme Court precedent; 3) the class action waiver at issue here is not unlawful under the National Labor Relations Act; 4) defendant-employer in this case did not waive its right to arbitrate by withdrawing its motion to compel arbitration after Gentry; but 5) an arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative actions pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA) in any forum is contrary to public policy; 6) the FAA does not preempt a state law that prohibits waiver of PAGA representative actions in an employment contract; and 7) the PAGA does not violate the principle of separation of powers under the California Constitution.

Appellate Information

• Decided 06/23/2014
• Published 06/23/2014

Judges

• LIU

Court

• Supreme Court of California

Counsel