Concepcion Doesn’t Doom Limo Driver Class, Calif. Court Told

December 21, 2012 – In The News

Former CLS Transportation Los Angeles LLC driver Arshavir Iskanian asked California’s highest court to overturn a decision to send his proposed wage-and-hour class action to individual arbitration, arguing a California precedent that discourages the enforcement of class action waivers in employment cases is still good despite the U.S. Supreme Court’s Concepcion decision.

The case gives the court an opportunity to clarify the enforceability of class waivers in employment disputes in the state, in the wake of the U.S. Supreme Court’s pro-arbitration decision in AT&T Mobility v. Concepcion.

Iskanian contends that the agreement he signed should not be enforced not only because it prevents the effective vindication of rights in violation of Gentry, but also because the agreement’s ban on representative claims under California’s Private Attorney General Act forecloses altogether the recovery of penalties and fees under the statue.

The appeals court’s June 4 ruling in favor of CLS, which the Supreme Court has agreed to review, rejected in light of Concepcion many of the arguments plaintiffs frequently put forward to get arbitration agreements nixed. It was haled as a significant victory for employers.

In its decision affirming a trial court’s decision to send Iskanian’s individual claims to arbitration, the Second Appellate District ruled that Concepcion overruled the Gentry decision.

The appeals court also broadly applied Concepcion to reject the argument that the right to bring representative actions under PAGA cannot be waived, in direct conflict with a ruling by a different Second District panel in Brown v. Ralphs Grocery Co.

In addition, the court refused to follow the National Labor Relations Board’s controversial D.R. Horton decision, which found that arbitration agreements with class waivers violated the National Labor Relations act.

Iskanian’s opening brief takes aim at all three of these holdings and further argues that CLS waived its right to pursue arbitration by participating in extensive class action discovery.

Fox Rothschild LLP attorney David F. Faustman, who represents CLS, said the opening brief to the Supreme Court merely rehashed the arguments that the plaintiff had made to the appeals court.

“There is nothing really new,” Faustman said. “They are basing the entire argument essentially on the notion that the California Supreme Court’s decision in Gentry has not been overruled [by Concepcion], and we and most of the judges who have looked at this issue disagree.”