Iskanian v. CLS Transportation of Los Angeles: Employee’s Perspective

By Glenn Danas and Ryan Wu

Glenn Danas is senior counsel at Capstone and leads the firm’s Appellate & Complex Motion Practice Group. Mr. Danas has argued numerous appeals in the state and federal appellate courts, and argued on behalf of the workers in the court of appeal and in the Supreme Court in Iskanian. Ryan Wu is senior counsel at Capstone in the firm’s Appellate & Complex Motion practice group. Mr. Wu has briefed extensively on issues related to the Private Attorneys General Act, including Baumann v. Chase Investments in the Ninth Circuit.

Can an employer foreclose workers from pursuing aggregate litigation through the use of class and representative action waivers embedded in an arbitration agreement? In Iskanian v. CLS Transportation of Los Angeles,¹ the California Supreme Court answered that question with a mixed decision for workers. The court held that the Federal Arbitration Act (FAA) preempted a state law rule allowing courts to invalidate class action waivers in employment arbitration agreements under certain circumstances. However, the court also ruled that a worker’s right to represent the state to pursue civil penalties under the Private Attorneys General Act of 2004 (PAGA) cannot be forfeited by a pre-dispute private contract.² Below is a summary of the court’s holdings and some context for its reasoning.

Class Action Waivers Are Generally Enforceable, Notwithstanding Other Unconscionable Provisions