Sonic-Calabasas A, Inc. v. Moreno

Summary

The California Supreme Court considered whether an employment arbitration agreement could require an employee to waive the statutory right to pursue a Berman wage hearing before the Labor Commissioner. The court held that a prehearing waiver is contrary to public policy and unconscionable, while allowing arbitration after a Berman hearing. It also concluded that this rule was not preempted by the Federal Arbitration Act.

Holdings

1. A predispute waiver of a Berman hearing in an arbitration agreement is contrary to public policy and unconscionable.
2. Arbitration agreements may be enforced after a Berman hearing has taken place; the appeal from a Berman hearing may be made to arbitration pursuant to a valid arbitration agreement.
3. The state law rule invalidating Berman waivers is not preempted by the FAA.

Questions Presented

1. Whether a provision in an arbitration agreement requiring waiver of the option of a Berman hearing is contrary to public policy and unconscionable.
2. Whether a state law rule invalidating such a waiver is preempted by the Federal Arbitration Act.

Disposition

reversed_and_remanded