While likely subject to appeal by the plaintiff’s lawyer in the case, California employers received a welcome decision by a California Court of Appeal. The Court upheld a class action waiver in an arbitration agreement and also found the plaintiff could not bring claims under the California Private Attorney General Act (“PAGA”) in light of the arbitration agreement. The California Court of Appeal involved was the Second Appellate District, Division Two. See, Iskanian v. CLS Transportation etc. (CA2/2 B235158 6/4/12).

The Court followed the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion (2011) __ U.S. __ [131 S. Ct. 1740] (Concepcion), which found that the Federal Arbitration Act (FAA) required arbitration agreements with class action waivers to be enforceable. The Court wrote:

 

Applying this binding authority, we conclude that the trial court properly ordered this case to arbitration and dismissed class claims

 

Importantly, the Court declined to follow D.R. Horton, 357 NLRB No. 184 (Jan. 3, 2012), where the National Labor Relations Board ("NLRB") held that “employers may not compel employees to waive their NLRA right collectively to pursue litigation of employment claims in all forums, arbitral and judicial.” The Court declared:

 

As the FAA is not a statute the NLRB is charged with interpreting, we are under no obligation to defer to the NLRB’s analysis. “[C]ourt’s do not owe deference to an agency’s interpretation of a statute it is not charged with administering or when an agency resolves a conflict between its statute and another statute.” (Association of Civilian Technicians v. F.L.R.A. (9th Cir. 2000) 200 F.3d 590, 592; see also Hoffman Plastic Compounds, Inc. v. N.L.R.B. (2002) 535 U.S. 137, 144 [“we have accordingly never deferred to the Board’s remedial preferences where such preferences potentially trench upon federal statutes and policies unrelated to the NLRA”]. . .

 

We decline to follow D.R. Horton. In reiterating the general rule that arbitration agreements must be enforced according to their terms, Concepcion (which is binding authority) made no exception for employment-related disputes.

 

Employers also received welcome news when the Court found that the plaintiff could not pursue the PAGA claims. The Court found that the FAA “preempts any attempt by a court or state legislature to insulate a particular type of claim from arbitration.” The Court’s decision provides employers with several positive developments. However, there are conflicting decisions regarding some of the issues in other California Court decisions and in other forums. As a result, employers should consult with their legal counsel when reviewing the enforceability of arbitration agreements.

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Photo of Jonathan A. Siegel Jonathan A. Siegel

Jonathan A. Siegel is one of the founding Principals of the Orange County, California, office of Jackson Lewis P.C. He practices before the Equal Employment Opportunity Commission, National Labor Relations Board, state and federal agencies and courts.

Mr. Siegel also provides advice and…

Jonathan A. Siegel is one of the founding Principals of the Orange County, California, office of Jackson Lewis P.C. He practices before the Equal Employment Opportunity Commission, National Labor Relations Board, state and federal agencies and courts.

Mr. Siegel also provides advice and counsel regarding labor and employment law with respect to various issues ranging from wage and hour law, reduction in force, WARN Act, discipline, leave management and harassment and discrimination issues. Mr. Siegel defends employers regarding different varieties of wrongful termination and discrimination claims.

Mr. Siegel has represented management in union organizing drives and regularly defends employers in unfair labor practice proceedings as well as in collective bargaining and arbitrations. He also has extensive experience conducting wage and hour preventive audits. He conducts single location and multi-location audits for employers. The scope of such audits can range from examining specific issues, i.e., exempt status under federal law and California, to comprehensive FLSA and California Labor Code audits. Mr. Siegel has conducted audits for a wide range of industries including, but not limited to manufacturing, retail, transportation, various service industries, defense contractors and healthcare.

Mr. Siegel regularly speaks on a variety of topics including wage and hour, harassment/discrimination, national and California employment trends, Workers’ Compensation, EEO, managing leaves of absence under FMLA and state leave laws and union avoidance. He has moderated numerous programs and is featured as a keynote speaker for several different organizations.