[UPDATED THROUGH FEBRUARY 19, 2014]
Is Employment Arbitration Agreement Unconscionable if One Party Is More Likely to Use the Relief Provided? Is an employment arbitration agreement unconscionable for lack of mutuality if it contains a clause providing that either party may seek provisional injunctive relief in the courts and the employer is more likely to seek such relief? Baltazar v. Forever 21, Inc., S208345 (opinion below B237173, formerly 212 Cal.App.4th 221). Review was granted 3/20/13, but briefing was deferred pending the decision in Wisdom v. Accentcare, Inc., S200128. Update 7/24/13: Review dismissed in Wisdom due to settlement. Update 8/28/13: Briefing ordered on the above issue. Update 9/11/13: Review granted in Leos v. Darden Restaurant, Inc., S212511 (opinion below B241630, formerly 217 Cal.App.4th 473), with briefing deferred pending decision in Baltazar.
Was Vacating the Arbitration Award Consistent With Limited Judicial Review? After the Court of Appeal reversed a decision to vacate an arbitration award, the Court granted review on the following issues: (1) Is an employer’s honest belief that an employee was violating company policy or abusing medical leave a complete defense to the employee’s claim that the employer violated the Moore-Brown-Roberti Family Rights Act (Gov. Code §§ 12945.1, 12945.2)? (2) Was the decision below to vacate the arbitration award in the employer’s favor consistent with the limited judicial review of arbitration awards? Richey v. Autonation, Inc., S207536 (opinion below B234711, formerly 210 Cal.App.4th 1516, as modified 211 Cal.App.4th 701b). Review was granted on 2/13/13.
Did U.S. Supreme Court overrule Provisions of California Labor Law?
In reviewing an order compelling arbitration and dismissing class claims, the court granted review on the following issues: (1) Did AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __ [131 S. Ct. 1740, 179 L.Ed.2d 742] impliedly overrule Gentry v. Superior Court (2007) 42 Cal.4th 443 with respect to contractual class action waivers in the context of non-waivable labor law rights? (2) Does the high court’s decision permit arbitration agreements to override the statutory right to bring representative claims under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)? (3) Did defendant waive its right to compel arbitration? Iskanian v. CLS Transportation Los Angeles, LLC, S204032 (opinion below, B235158, formerly 206 Cal.App.4th 949), review granted on 9/19/12. Update 10/29/12: review granted in Caron v. Mercedes-Benz Financial Services USA LLC, S205263 (opinion below, G044550, formerly 208 Cal.App.4th 7), with briefing deferred pending resolution of Iskanian. Update 12/12/12: Review granted in Reyes v. Liberman Broadcsting, Inc., S205907 (opinion below B235211, formerly 208 Cal.App.4th 1537), with briefing deferred pending resolution of Iskanian. Update 2/13/13: Review granted in Franco v. Arakelian Enterprises, Inc., S207760 (B232583, formerly 211 Cal.App.4th 314, as modified). Briefing was deferred pending a decision in Iskanian. Update 4/10/13: Review granted in Flores v. West Covina Auto Group, LLC, S208716 (opinion below B238265, formerly 212 Cal.App.4th 895.) Briefing was deferred pending a decision in Iskanian. Update 9/11/13: Review granted in Brown v. Superior Court S211962 (opinion below H037271, formerly 216 Cal.App.4th 1302), with briefing deferred pending a decision in Iskanian.
Does the FAA Preempt State Consumer Protections Against Mandatory Arbitration? Does the Federal Arbitration Act (9 U.S.C. § 2), as interpreted in AT&T Mobility LLC v. Concepcion (2011) 563 U. S. __, 131 S.Ct. 1740, preempt state law rules invalidating mandatory arbitration provisions in a consumer contract as procedurally and substantively unconscionable? Sanchez v. Valencia Holding Co. LLC, S199119 (opinion below B228027, formerly 201 Cal.App.4th 74), review granted 3/21/12. Update 5/9/12: Review granted in Buzenes v. Nuvell Financial Services, S200376 (opinion below B221870, nonpublished). Briefing deferred pending decision in Sanchez. Update 6/13/12: Review granted in Mayers v. Volt Management Corp., S200709 (opinion below G045036, formerly 203 Cal.App.4th 1194). Briefing deferred pending decision in Sanchez. Update 12/19/12: Review granted in Goodridge v. KDF Automotive Group, Inc., S206153 (opinion below D060269, formerly 209 Cal.App.4th 325), with briefing deferred pending the resolution of Sanchez. Update 5/1/13: review granted in Natalini v. Import Motors, Inc., S209324 (opinion below A133236, formerly 213 Cal.App.4th 587), with briefing deferred pending the resolution of Sanchez. Update 6/12/13: review granted in Compton v. Superior Court, S210261 (opinion below B236669, formerlly 214 Cal.App.4th 873), with briefing deferred pending the resolution of Sanchez. Update 6/26/13: Review granted in Vasquez v. Greene Motors, Inc., S210439 (opinion below A134829, originally 214 Cal.App.4th 1172, as modified 215 Cal.App.4th 764a), with briefing deferred pending the resolution of Sanchez. Update 8/21/13: Review granted in Vargas v. SAI Monrovia B, Inc., S212033 (opinion below B237257, formerly 216 Cal.App.4th 1269) ), with briefing deferred pending the resolution of Sanchez. Update 11/26/13: Review granted in Gonzales v. Metro Nissan of Redlands, S214121, (opinion below E056160, nonpublished), with briefing deferred pending the resolution of Sanchez.
Update 2/19/14: The court invited the parties and interested persons to file supplemental briefing on the following questions. In formulating the standard for determining whether a contract or contract term is substantively unconscionable, this court has used a variety of terms, including “unreasonably favorable” to one party (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1145); “so one-sided as to shock the conscience” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (2012) 55 Cal.4th 223, 246); “unfairly one-sided” (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071–1072; “overly harsh” (Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 114; and “unduly oppressive” (Perdue v. Crocker National Bank (1985) 38 Cal.3d 913, 925). (1) Should the court use only one of these formulations in describing the test for substantive unconscionability and, if so, which one? (2) Are there any terms the court should not use? (3) Is there a formulation not included among those above that the court should use? (4) What differences, if any, exist among these formulations either facially or as applied?
Case remanded from the USSC – Can Arbitration Over a Wage Claim be Compelled Prior to the Conclusion of the Administrative Proceedings of the Labor Commissioner? The trial court denied a motion to compel arbitration, and the Court of Appeal reversed. The California Supreme Court granted review on these issues: (1) Can a mandatory employment arbitration agreement be enforced prior to the conclusion of an administrative proceeding conducted by the Labor Commissioner concerning an employee’s statutory wage claim? (2) Was the Labor Commissioner’s jurisdiction over employee’s statutory wage claim divested by the Federal Arbitration Act under Preston v. Ferrer (2008) __ U.S. __, 128 S.Ct. 978, 169 L.Ed.2d 917? Sonic-Calabasas A, Inc. v. Moreno, S174475 (opinion below B204902, formerly 174 Cal.App.4th 546), petition granted 9/9/09. The California Supreme Court issued its opinion on 2/24/11, reversing the Court of Appeal and reinstating the trial court’s order that “until there has been the preliminary non-binding hearing and decision by the Labor Commissioner, the arbitration provisions of the employment contract are unenforceable, and any petition to compel arbitration is premature and must be denied.” Update 11/3/11: The U.S. Supreme Court granted the petition for writ of certiorari, vacated the existing judgment and remanded for further consideration in light of AT&T Mobility LLC v. Concepcion, ___ U.S.__ (2011). Update 1/11/12: The California Supreme Court ordered to parties to submit supplemental briefing by 2/10/12 with replies due by 2/24/12. The parties requested extensions. Update 3/7/13: Oral argument scheduled for 4/3/13. Update 4/3/13: Case argued and submitted. The briefs are here. Update 6/21/13: The Court requests supplemental briefing addressing the significance, if any, of the United States Supreme Court's recent decision in American Express Co. v. Italian Colors Restaurant (June 20, 2013) ___ U.S. ___ [2013 WL 3064410].
Update 10/17/13: Opinion issued. A unanimous Court held that, pursuant to Concepcion, the FAA preempts a state-law rule that categorically prohibits an adhesive arbitration agreement from requiring an employee to waive access to an administrative hearing, thus reversing its previous decision in this case. A divided court, 5-2, remanded to address plaintiff’s claim that the arbitration provision was unconscionable and therefore unenforceable. Justice Corrigan concurred in the result, but criticized the majority for failing to provide a clear standard for adjudicating whether the agreement was unconscionable. Justice Chin dissented, joined by Justice Baxter, regarding unconscionability, arguing that the issue had been waived below and that it is impossible for plaintiff to show that this provision “shocked the conscience,” which should be the standard for unconscionability.