In a loss for the California transportation industry, the Court of Appeal for California’s Fourth Judicial District recently found in Muro v. Cornerstone Staffing Solutions, Inc., that the Federal Arbitration Act (“FAA”) is unenforceable in employment contracts regarding employees who are engaged in transporting goods in interstate or foreign commerce, regardless of whether the
Transportation
Employer Cannot Enforce Class Action Waiver Because Court of Appeal Rules Interstate Truck Drivers Not Subject to FAA
On October 26, 2015, a California Court of Appeal held that the Federal Arbitration Act (“FAA”) does not apply to interstate truck drivers, and as a result, it ruled that an employer’s class action waiver was unenforceable as a matter of public policy under the California Gentry rule. Garrido v. Air Liquide Industrial U.S. LP, No. B254490 (Cal. Ct. App. Oct. 26, 2015). This case is significant because it expands the scope of the “transportation worker” exemption under the FAA. Practically, numerous employers who physically distribute their own goods interstate will now be prevented from compelling individual arbitration of class action lawsuits.
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Federal Law Does Not Preempt State Unfair Competition Claim, California High Court Rules
In a case alleging misclassification of an independent contractor in the transportation industry, the California Supreme Court has found that the California unfair competition law (Bus. & Prof. Code, § 17200 et seq.) (“UCL”) was not preempted by the Federal Aviation Administration Authorization Act of 1994 (Pub. L. No. 103-305 (Aug. 23, 1994) 108 Stat.…