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Application Of Arbitration Agreements By California Employers

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9th Circuit Weighs In On Arbitration Agreements

The use of arbitration agreements by California employers has seen much debate in recent years and is presently undergoing significant change. Employers utilizing arbitration agreements with their employees should be aware of a new ruling that holds employees cannot waive their right to collectively arbitrate claims under California’s Private Attorney General Act (“PAGA”) and any arbitration agreement that requires an employee to arbitrate individually is invalid. The ruling came on September 23, 2015 in a 2-1 decision by the 9th Circuit Court of Appeal.

The decision overturns rulings made by numerous lower courts which have held that employees can waive their rights to collectively arbitrate claims. The case involved a former Lenscrafters employee who sued his former employer for wage and hour violations in 2013. A District Court judge ruled that because the plaintiff signed an arbitration agreement, he could not pursue claims collectively on behalf of other Lenscrafters employees. This has been the general ruling by the District Court in several other cases, and the basis of two other cases involving Coca Cola and Oakley pending before the 9th Circuit.

It would seem at first glance that, applying U.S. Supreme Court precedent, the arbitration agreement entered into by the plaintiff would be enforceable. The U.S. Supreme Court in AT&T Mobility, LLC v. Concepcion overturned a California Supreme Court holding that

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