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California High Court Weighs In On Arbitration, Again

On April 6, 2017, the California Supreme Court issued its decision in McGill v. Citibank, once again striking out against arbitration agreements – this time declining to enforce a provision in a credit card account agreement which prevented the cardholder from bringing a claim for an injunction on behalf of the general public. The legal focus in the case was the enforceability of an arbitration agreement which by its terms purported to waive the plaintiff’s right to seek public injunctive relief in any forum. The High Court, found that such provisions are unenforceable as a matter of California law. The decision has attracted some attention in the employment law media but its actual impact on employment arbitration will likely be negligible. The kind of injunction at issue – public injunctive relief – rarely arises in employment disputes. “Public injunctive relief” involves orders that by and large benefit the general public and benefits the plaintiff only incidentally, if at all. Normally, employment actions, to the extent they include injunctive relief, involve “private injunctions” because the relief sought rectifies individual wrongs and only incidentally benefits the general public.

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