California Court Affirms Class Action Waivers in Employment Arbitration Contracts

The California Court of Appeal held that class action waivers are enforceable in California employment arbitration agreements.

In Iskanian v. CLS Transportation Los Angeles, LLC, Arshavir Iskanian worked as a driver for defendant CLS Transportation Los Angeles, LLC (“CLS”) from March 2004 to August 2005. In December 2004, Iskanian signed a “Proprietary Information and Arbitration Policy/Agreement” (arbitration agreement) that contains a class and representative action waiver. In August, 2006, Iskanian brought a class action and a representative action under California’s Private Attorney General Act (“PAGA”) for various wage and hour violations.

The California Court of Appeal for the Second District held that the arbitration agreement and class action waiver were enforceable. Citing AT&T Mobility LLC v. Concepcion, the court held that the Federal Arbitration Act (“FAA”) preempts any state law prohibiting class action waivers in arbitration agreements. The court also held that the arbitration agreement was not unconscionable under Code Civ. Proc., § 1281.