Iskanian v. CLS Transportation Los Angeles, LLC

State’s refusal to enforce employee’s waiver of the right to bring arbitration claims on behalf of a class, on grounds of unconscionability, is preempted by the Federal Arbitration Act. Holding to the contrary in Gentry v. Superior Court (2007) 42 Cal. 4th 443 has been abrogated by recent U.S. Supreme Court precedent. Class action waiver in employment agreement was not unlawful under the National Labor Relations Act, where the agreement did not ban all collective activity to vindicate wage claims, since employees were not barred from filing joint claims or from seeking the assistance of a lawyer or union or of other workers, and arbitrator was not barred from consolidating claims of multiple employees or from awarding relief to a group of employees. Employer did not waive its right to arbitrate by withdrawing its motion to compel arbitration after Gentry, since it was not required to anticipate that Gentry would be abrogated. Arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative action under the Labor Code Private Attorneys General Act of 2004 in any forum is contrary to public policy, and the FAA’s goal of promoting arbitration as a means of private dispute resolution does not preclude the state from deputizing employees to prosecute Labor Code violations on the state’s behalf, so FAA does not preempt state law that prohibits waiver of PAGA representative actions in an employment contract. PAGA does not violate the principle of separation of powers under the California Constitution.
     Iskanian v. CLS Transportation Los Angeles, LLC - filed June 23, 2014
     Cite as 2014 S.O.S. 3112

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