On June 4th, 2012, in
Iskanian v. CLS Transportation Los Angeles LLC, (California Courts of Appeal– 2nd District, No. B235158), the court found that an arbitration agreement is enforceable, even when it contains a class action waiver, so long as it is neither procedurally nor substantively unconscionable.
Arshavir Iskanian was a driver for CLS Transportation Los Angeles LLC from March 2004 to August 2005. When he began working for CLS, Iskanian signed an agreement that stated that any claim he would have against CLS that arose out of his employment, including any class action claim, would be resolved through binding arbitration. Iskanian then filed a class action complaint in August 2006 against his former employer, claiming that CLS' labor practices were in violation of the Labor Code.
The trial court initially granted a motion by the defendant employer to compel arbitration, as it found that the arbitration agreement was not unconscionable, and thus, was enforceable. However, the Court of Appeals then directed the trial court to re-evaluate the ruling in consideration of new case law at the time that seemed to validate plaintiff's right to a class action law suit. When that case law was then expressly overruled by a more recent precedent ruling (Concepcion) in 2011, the trial court ordered that the case be submitted to binding arbitration before a neutral arbitrator.
In Iskanian, on its second appeal, the court evaluated the enforceability of the arbitration agreement according to the most recent case decisions. Applying such authority, the court found that the arbitration agreement was neither procedurally nor substantively unconscionable. As such, the Courts of Appeal concluded that the case was properly ordered to arbitration by the trial court.
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