Procedural Posture
Defendant employee challenged a judgment from the Court of Appeal, Second Appellate District, Division Four (California), which reversed the superior court’s order denying as premature plaintiff employer’s petition to compel arbitration of a wage claim.
Overview
As a condition of his employment, the employee signed an arbitration agreement. After leaving his position, he filed an administrative wage claim with the California Labor Commissioner for unpaid vacation pay. The employer petitioned the superior court to compel arbitration of the wage claim and dismiss the pending administrative action. The court held that requiring the employee to waive the option of a Berman administrative hearing under Lab. Code, §§ 98 to 98.8, was contrary to public policy and unconscionable. Because an appeal from such a hearing could be made to an arbitrator, the court found no conflict between the Berman hearing procedures and the California Arbitration Act, corporate litigation law Code Civ. Proc., § 1280 et seq. An employee’s statutory right to invoke the Berman process was an unwaivable right that an employee could not be compelled to relinquish under Civ. Code, § 3513, as a condition of employment. Moreover, although 9 U.S.C.S. § 2 prohibited the use of the contract defenses of unconscionability and violation of public policy to discriminate against arbitration agreements, invalidating Berman waivers did not trigger federal preemption because it did not disfavor arbitration.
Outcome
The court reversed the judgment of the court of appeal and remanded with directions to reinstate the superior court’s order.
