Los Angeles partner Steve Katz penned an Expert Analysis piece for Law360 discussing how a recent decision by the California Supreme Court has set up a direct confrontation with the U.S. Supreme Court over proper respect for established principles of Federal Arbitration Act preemption.
At issue is whether arbitration proceedings involving wage claims should be more informal, or more consistent with the practices and standards of civil litigation. According to Katz, "it seems inevitable that U.S. Supreme Court will have to intervene."
Unless and until the U.S. Supreme Court takes up the issue, Katz suggests that as a practical matter, employers with employment arbitration programs in California will have three choices for modifying their agreements to comply: (1) exempt wage claims entirely from arbitration; (2) establish a two-track arbitration process — a highly informal one for wage claims, and more litigation-like one for discrimination and other nonwage claims — or (3) craft a process that somehow skates in the middle, sufficiently informal to satisfy the most recent California decision and sufficiently litigation-like to satisfy earlier requirements. He notes that "each choice carries with it substantial risks and potential pitfalls, and it is not clear whether one is superior to the others."
The full article is available here (subscription required).