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Supreme Court to Hear Another Arbitration Case Barring Class Action Employment Claims


The battle against forced arbitration rages on and, once again, the U.S. Supreme Court has been dragged into the dispute. The most recent battle is over the case Iskanian v. CLS Transportation Los Angeles, LLC. In this case, Iskanian, a driver for CLS, signed a “Proprietary Information and Arbitration Policy/Agreement” which provided that “any and all claims” arising out of his employment were to be submitted to arbitration. Despite having signed this agreement after having worked for CLS for several months, Iskanian later filed a class action lawsuit against the transportation company for allegedly failing to pay overtime, provide meal and rest breaks, reimburse business expenses, provide accurate and complete wage statements, and pay final wages in a timely manner.

When the case was first filed in California, the court deemed the arbitration agreement invalid due to a previous decision by the California State Supreme Court in the case of Gentry v. Superior Court. This decision held that employment arbitration agreements, at least as it relates to overtime, should not be enforced in class arbitration if class arbitration was found to be significantly more effective in defending the rights of affected employees than individual arbitration. This decision contained a four-part test to determine when a class action waiver in an arbitration agreement should be upheld. The four factors which courts are to consider when determining if arbitration should be enforced are as follows: 1) the size of the potential individual recovery; 2) the potential for retaliation against members of the class; 3) whether members of the class may not be informed of their rights; and 4) other “real world obstacles” to the vindication of the presumed class members’ rights overtime pay through individual, and not class, arbitration.

While the Iskanian case was pending in court, the U.S. Supreme court made a ruling in the case of AT&T Mobility v. Concepcion. This decision that state laws were pre-empted by the Federal Arbitration Act (FAA). Despite the fact that the FAA allows for local laws which might inhibit the enforcement of arbitration agreements, the Supreme Court decided to interpret it as a mandate to enforce all arbitration agreements, regardless of state laws.
Once the controversial Concepcion decision was announced, CLS moved to compel arbitration and dismiss the class claims. The trial court ruled in favor of CLS and Iskanian appealed. The Second Appellate District Court of Appeal upheld the ruling of the trial court. The case was again appealed and now the U.S. Supreme Court has agreed to hear the case.

The decision reached by the Supreme Court in this case will affect class action lawsuits throughout the country. If they side with CLS, it could make it more difficult for plaintiffs to file class action lawsuits in court, thereby making it more difficult for employees to regain their rights. This is particularly true when the individual claims of employees are small.

The attorneys at the Chicago Overtime Law Center are investigating unpaid overtime claims against large retailers such as Walmart for misclassifying employees as managers, failing to pay workers for overtime and other wages. If you are the victim this practice call us at (312) 869-4095 or contact us online.

The lawyers at the Chicago Overtime Law Center have decades of experience fighting for wage earner’s rights. We have a team of overtime attorneys who focus on nationwide class action lawsuits and work out of Chicago and Oak Brook offices and prosecute claims for workers all over the Chicago area including Naperville and Aurora. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kane and Cook Counties.

Our Evanston and River Forest overtime lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers misclassify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

The Chicago Overtime Law Center is based in Chicago, and represents clients throughout the country who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago wage and hour attorney by phone at (312) 869-4095 or through our online form.