Cal. SC rules for lawsuits over arbitration in overtime disputes

Legal News Line Aug. 31, 2007, 5:32am

Justice Carlos R. Moreno

SACRAMENTO -- For the second time in just over four months, the California Supreme Court has ruled in favor of labor over employers in an overtime-pay dispute. An in both cases the Supreme Court opinion on the case was authored by Associate Justice Carlos R. Moreno. In Robert Gentry v. Superior Court of Los Angeles (docket# S141502) the Supreme Court overturned a Court of Appeals ruling in a case determining whether employees can sue employers as a group for alleged overtime violations. The court 4-3 that workers could bring such suits even if their employment contract forbids it. In this case, Circuit City's arbitration agreement with employees forbidding class-action suits against it "has an element of procedural unconscionability," Justice Moreno wrote. He added that declaring the agreement to have procedural unconscionability means it "is not immune from judicial scrutiny to determine whether or not its terms are so one-sided or oppressive as to be substantively unconscionable." But dissenting Justice Marvin R. Baxter refused to join the majority's "continuing effort to limit and restrict the terms of private arbitration agreements." In support he cited federal statutes designed to enforce arbitration as a cheaper alternative to litigation. In an April case (Docket No. S140308) the Supreme Court extended the statute of limitations for workers bringing suit against employers over previous unpaid meal-breaks and rest periods. The court ruled the additional hour of pay a wage, not a penalty payment, and so subject to the three-year limit, LNL reported. "The administrative and legislative history, and the compensatory purpose of the remedy qualify the 'additional hour' as a 'premium wage'," Moreno wrote in that case. In the current case he defended workers using class-action suits to resolve disputes. Such actions perform "an important function in enforcing overtime laws by permitting employees who are subject to the same unlawful practices a relatively inexpensive way to resolve their disputes," Moreno wrote. The decision provides "no relief for employers from the pandemic of costly employee class actions," one corporate attorney told the San Francisco Chronicle.

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