Gentry

In this case we consider whether class arbitration waivers in employment arbitration agreements may be enforced to preclude class arbitrations by employees whose statutory rights to overtime pay pursuant to Labor Code sections 500 et seq. and 1194 1 allegedly have been violated. We conclude that at least in some cases, the prohibition of classwide relief would undermine the vindication of the employees’ unwaivable statutory rights and would pose a serious obstacle to the enforcement of the state’s overtime laws. Accordingly, such class arbitration waivers should not be enforced if a trial court determines, based on the factors discussed below, that class arbitration would be a significantly more effective way of vindicating the rights of affected employees than individual arbitration. We therefore reverse the judgment of the Court of Appeal upholding the class arbitration waiver and remand for the above determination.

Another issue posed by this case is whether a provision in an arbitration agreement that an employee can opt out of the agreement within 30 days means that the agreement is not procedurally unconscionable, thereby insulating it from employee claims that the…

I respectfully dissent. I cannot join the majority’s continuing effort to limit and restrict the terms of private arbitration agreements, which enjoy special protection under both state and federal law.

Both the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) and the California Arbitration Act (CAA; Code Civ. Proc., § 1281 et seq.) provide that an agreement to resolve disputes by arbitration, rather than by court litigation, must be enforced except upon grounds applicable to contracts generally. These statutes are intended to override courts’ historical suspicion of arbitration as an inferior forum for the vindication of claims, and to endorse contracts—including employment contracts—in which parties agree to resolve their disputes by this relatively cheap, simple, and expeditious means. (See, e.g., Circuit City Stores, Inc. v. Adams (2001) 532 U.S. 105, 111-124 [ 149 L.Ed.2d 234 , 121 S.Ct. 1302 ]; Gilmer v. Inter state/Johnson Lane Corp. (1991) 500 U.S. 20, 30 [ 114 L.Ed.2d 26 , 111 S.Ct. 1647 ] (Gilmer); Moses H. Cone Hospital v. Mercury Constr. Corp. (1983) 460 U.S. 1, 24 [ 74 L.Ed.2d 765 , 103 S.Ct. 927 ] (Moses H. Cone Hospital); St. Agnes Medical Center v. PacifiCare…

Goldstein, Demchak, Bailer, Borgen & Dardarian, Laura L. Ho, Oakland, and Jospeh E. Jaramillo, for Trial Lawyers for Public Justice, Asian Law Caucus, Asian Pacific American Legal Center, California Rural Legal Assistance Foundation, Hastings Civil Justice Clinic, Impact Fund, The Katherine and George Alexander Community Law Center, La Raza Centro Legal, Inc., Lawyers' Committee for Civil Rights of the San Francisco Bay Area, The Legal Aid Society of San Francisco-Employment Law Center and Mexican American Legal Defense and Educational Fund as Amici Curiae on behalf of Petitioner.

Law Office of Michael H. Crosby and Michael H. Crosby, San Diego, as Amici Curiae on behalf of Petitioner.

Edmund G. Brown, Jr., Attorney General, Tom Greene, Chief Assistant Attorney General, Albert Norman Shelden, Assistant Attorney General, Ronald A. Reiter and Michele R. Van Gelderen, Deputy Attorneys General, as Amici Curiae on behalf of Petitioner.

No appearance for Respondent.

Berry & Block, Rex Darrell Berry, Scott M. Plamondon, Sacramento; Jones Day and Steven B. Katz, Los Angeles, for Real Party in Interest.

Littler Mendelson, Henry D. Lederman, Lisa C. Chagala and Harry M. Decourcy,…