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Agreement waiving class-wide arbitration was unconscionable
March 11, 2009 by Ross Runkel at LawMemo
Today's Employment Law Memo reports on yesterday's decision in Franco v. Athens Disposal (California Ct App 03/10/2009)
Franco sued the employer in a class action, asserting claims for violation of several provisions of state wage-and-hour laws. The employer petitioned to compel arbitration, which was granted by the trial court. The California Court of Appeal reversed.
The employer’s arbitration agreement contained a provision waiving class-wide arbitration and precluding employees from acting in “a private attorney general capacity.”
The court concluded that the arbitration provision was “unconscionable with respect to the alleged violations of the meal and rest period laws given ‘the modest size of the potential individual recovery, the potential for retaliation against members of the class, [and] the fact that absent members of the class may be ill informed about their rights.’”
The court further concluded, “because the arbitration agreement prevents plaintiff from acting as private attorney general, it conflicts with the Labor Code Private Attorneys General Act of 2004...” With respect to the first conclusion, the court relied primarily upon application of the analysis set forth in Gentry v. Superior Court (2007) 42 Cal.4th 443.
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