Iskanian v. CLS Transp of LA, California Supreme Court Upholds Signifi... Legal Advocacy

California Supreme Court Upholds Significant Rights of Workers

Read AARP's (PDF) California’s supreme court held that while an arbitration agreement can prohibit class actions, workers cannot waive their rights to bring representative actions in court under the state’s Private Attorney General Act.

Background

Arshavir Iskanian alleged that his employer (CLS Transport) failed to pay overtime, provide meals and rest breaks, reimburse business expenses, provide accurate and complete wage statements, and pay final wages in a timely manner. Iskanian sued on behalf of himself and as a representative of other workers, invoking the state’s labor laws and the California’s Private Attorneys General Act. After the U.S. Supreme Court mandated dismissal of consumer class action claims when an arbitration agreement had been signed, CLS moved to dismiss Iskanian’s representative claims and compel arbitration, noting that Iskanian had signed an arbitration clause in his employment contract. If arbitration was not allowed CLS argued, then workers who are permitted to sue should not be allowed to raise group or class claims. Arbitration is an out-of-court resolution process designed for business-to-business transactions where the parties are on relatively equal footing in terms of sophistication and access to resources. However, it is increasingly being found in situations where the parties are not on such equal footing — in employment contracts, credit card agreements, nursing facility contracts, and other situations where one party wields much greater power and access to resources than the other. Arbitration does not carry the same procedural protections, public process, and can be far more expensive than court proceedings. AARP’s friend-of-the-court brief filed jointly with other groups representing workers addressed the U.S. Supreme Court ruling in AT&T Mobility v. Concepcion, and distinguished that as a decision in a consumer case, rather than an employment law case. Workers have different rights under labor laws than consumers. This is particularly true in California, where labor law expressly allows employees to bring cases as a class in order to allow challenges to systemic discrimination. The California Supreme Court in 2007 ruled in Gentry v. Super. Ct. that rights afforded to Californians under FEHA were not waivable. AARP’s brief filed by AARP Foundation Litigation attorneys asked the state’s highest court to uphold its prior ruling in Gentry and to find that the Concepcion ruling should not apply to workers’ rights under the state’s labor laws. While the Court overturned Gentry, and held that while arbitration agreements with mandatory class waivers are generally enforceable in light of the Concepcion ruling, employees should always be allowed to bring suits alleging violations of state law under the state Private Attorneys General Act. Ruling otherwise, the court wrote, would be contrary to public policy.

What s at Stake

The ability to bring representative or group claims is essential to protect workers and others rights. The California Supreme Court upheld workers’ rights to challenge violations of state labor law with representative claims under the Private Attorney General Act.

Case Status

Iskanian v. CLS Transp. of LA was decided by the California supreme court.

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