California Supreme Court Voids Class-Action Bar in Employment Arbitration Agreement

The California Supreme Court yesterday held (4-3) that "at least in some cases, the prohibition of classwide relief would undermine the vindication of [] employees' unwaivable statutory rights [in this case, to overtime pay] and would pose a serious obstacle to the enforcement of the state's overtime laws."  The court therefore held that class arbitration waivers "should not be enforced if a trial court determines . . . that class arbitration would be a significantly more effective way of vindicating the rights of affected employees than individual arbitration."  In making such a determination, the trial court should consider (1) the size of the potential individual recovery, (2)  the potential for retaliation against members of the class, (3) whether absent members of the class may be ill-informed about their rights, and (4) "other real-world obstacles to the class members' [statutory rights] through individual arbitration."

The case is Gentry v. Superior Court, ___ Cal.Rptr.3d ___, No. S1415022007 (Aug. 30, 2007).  The employer-in-interest was Circuit City.

My only quibble: the "at least in some cases" phrase.

rb