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Silence Can Be a Good Thing for Employers – Another Installment in the Saga of Wage and Hour Class Actions and Arbitration in California

A California appellate court has ruled that where an arbitration agreement compels arbitration of employment claims but is silent on whether class actions are authorized, the trial court wrongly compelled the employer to participate in a wage and hour class arbitration.

First, the appellate court found that the trial court acted properly in compelling arbitration of the individual wage and hour claim. As to the class allegations, however, the trial court was wrong in denying the employer’s motion to dismiss the class allegations instead of sending them off to arbitration in light of the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 563 U.S. __, 131 S.Ct. 1740 (2011).

The key facts were that the arbitration agreement was solely between the employee and employer, and the agreement itself did not expressly authorize class actions to proceed in arbitration. Instead it was silent on the topic. That silence was deemed a lack of the required employer consent to arbitrate class claims by the Second District Court of Appeal sitting in Los Angeles which then directed dismissal of the class action allegations. The case is Kinetca Alternative Financial Solutions Inc. v Superior Court. 

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About this Author

James Nelson, Greenberg Traurig Law Firm, Los Angeles, Sacramento, Phoenix, Labor and Employment Attorney

James M. Nelson is Co-Chair of the firm’s National Labor & Employment Practice’s ERISA Litigation team, as well as, Chair of the Sacramento office’s Labor & Employment Practice. He represents employers and ERISA plan fiduciaries in matters concerning ERISA compliance, fiduciary responsibility, collective bargaining, wage and hour, employee benefits, safety, discrimination, wrongful termination, and other labor and employment issues.

His experience includes complex litigation, class action defense, administrative proceedings and appeals,...