The Court Of Appeal Also Directs Entry Of Order Granting Employer’s Petition To compel Arbitration On An Individual Basis
Employee Arroyo’s complaint alleged his employer engaged in wage and hour practices that violated the California Labor Code. The trial court denied the employer’s petition to compel arbitration, but this denial was reversed on appeal with directions to compel arbitration of employee claims on an individual (as opposed to a class) basis. Arroyo v. Riverside Auto Holdings, Inc., Case No. E056256 (4th Dist. Div. 2 Sept. 13, 2013) (Richli, J. author 3:0) (unpublished).
We glean three points of interest from this unpublished decision.
First, the Court of Appeal reads AT&T Mobility LLC v. Concepcion, __ U.S. __ [131 S.Ct. 1740 (2011) (Concepcion) as broadly holding that the FAA preempted class action arbitration, and refuses to distinguish between consumer and employment situations.
Second, the Court of Appeal acknowledges that “[o]ne of the most volatile issues in this area of the law concerns the argument that the FAA preempts class action claims in arbitration agreements, particularly when statutory rights, such as the Labor Code provisions cited in this case, are asserted.”
Third, the Court of Appeal, while discerning “a strong argument for preemption,” continues to assume that “Gentry remains good law until it is expressly overruled by our Supreme Court.” Gentry held that class arbitration waivers in employment arbitration agreements may be unenforceable when certain conditions – the “Gentry factors” – are satisfied. However, Arroyo had failed to meet the factual burden of proof required by Gentry.