One of the important cases in the so-called “arbitration wars” recently got a hearing date Oral argument has been set in Iskanian v. CLS Transportation before the California Supreme Court for Thursday, April 3, 2014.
A ruling could provide important information on how arbitration agreements are handled. In this case, the trial court ordered the case to arbitration, but plaintiff appealed, and the appellate court reversed that decision, ordering the lower court to reconsider their earlier decision in light of other recent cases, including Gentry v. Superior Court.
Gentry essentially says arbitration agreements must be analyzed according to contract standards, and if the agreement is determined to be so one-sided, the agreement can be rejected. That keeps the case in court, and not with private arbitrators, whose fees are typically paid for by the employer. Some suggest the situation leaves some employment lawyers worried about bias, because the arbitrator knows who is paying their fee, and may wonder if an employee-friendly decision means the same company (or others) would be less likely to use their services in the future. Further complicating the situation is the fact that Gentry relied upon an earlier decision, Discover Bank v. Superior Court, which held that the Federal Arbitration Act preempts state law. That case involved a class action waiver, a feature of some arbitration agreements.