California Supreme Court Holds Right to File Wage Claim with State Labor Commissioner Trumps Pre-Dispute Arbitration Provision
In the California Supreme Court opinion of Sonic-Calabasas A, Inc. v. Moreno, a 4-3 majority of the court concluded that a pre-dispute employee-employer arbitration agreement requiring the arbitration of employee wage claims, which could otherwise be brought before the state's Labor Commissioner, is contrary to public policy and unconscionable, and is thus unenforceable. The court's majority declared that the 2008 U.S. Supreme Court case of Preston v. Ferrer did not compel a different conclusion and that the court's holding was not preempted by the Federal Arbitration Act (FAA; 9 U.S.C. §§ 1 et seq.). See our recent ASAP for a detailed analysis of the decision's implications for employers.
