FANCY FOOTWORK: CALIFORNIA NARROWLY APPLIES U.S. SUPREME COURT FAA PRECEDENT; UPHOLDS STATE LAW UNCONSCIONABILITY AS A GROUND FOR REFUSING TO ENFORCE ARBITRATION AGREEMENT

摘要

The California courts' traditional antipathy to arbitration clauses in consumer and employment contracts may be wavering in light of recent U.S. Supreme Court decisions, but a recent California high court decision goes to great lengths to preserve-and establish the parameters of-a state courts right to invalidate individual arbitration agreements on grounds of unconscionability. In a lengthy opinion narrowly interpreting recent Supreme Court case law on waiver and Federal Arbitration Act (FAA) preemption, the California Supreme Court on October 17, 2013, reversed its earlier holding that an arbitration provision in an employment agreement that had the effect of precluding employee recourse to an administrative wage-recovery procedure before the California Labor Commissioner (known as a "Berman hearing") was per se unconscionable and contrary to public policy.