Recent Cases Provide Helpful Reminders Regarding Best Practices (And Pitfalls) With Employment Arbitration Clauses

Scrutiny of mandatory, pre-employment arbitration agreements continues before California state and federal courts. Several recent decisions provide helpful reminders for employers drafting, reviewing or enforcing arbitration clauses:

• DO consider a class action waiver, but remember that Private Attorneys' General Act ("PAGA") claims are neither waivable nor subject to mandatory arbitration. In Franco v. Arakelian Enterprises, Inc., a California appellate court required a waste truck driver to arbitrate his individual wage and hour claims, dismissed his class claims, and stayed his PAGA claims until resolution of the arbitration. The court followed the California Supreme Court's lead in Iskanian v. CLS Transportation (see July 2014 FEB) that waivers are valid as to class claims but not as to PAGA claims, in which the employee acts as a representative of the state.