Adr Update: Gentry Rides Again: When Gentry Still Applies

• Citation: Vol. 32 No. 3
• Publication year: 2018
• Author: By Joel M. Grossman

ADR Update: Gentry Rides Again: When Gentry Still Applies

By Joel M. Grossman

Joel M. Grossman is a mediator and arbitrator with JAMS in Los Angeles. He has been selected four times as one of the Top Neutrals in California by the Daily Journal. For more information please contact www.grossmanmediation.com.

Employment lawyers in California are well aware that ever since the United States Supreme Court ruled in ATT Mobility v. Concepcion¹ that class action waivers are not unconscionable, courts have been enforcing the terms of arbitration agreements containing class action waivers. Even though the California Supreme Court had ruled in Gentry v. Superior Court² that such a waiver could be unconscionable, and therefore unenforceable, the U.S. Supreme Court in Concepcion held that such agreements must be enforced under the Federal Arbitration Act (FAA). Subsequently, the California Supreme Court enforced a class action waiver under the FAA in Iskanian v. CLS Transportation Los Angeles, LLC,³ notwithstanding its prior holding in Gentry. Gentry seemed dead as a doornail so long as the FAA applied.

Lawyers are presently awaiting the U.S. Supreme Court's decision in three cases regarding whether a court may enforce a class action waiver under the FAA: Ernst & Young v. Morris,⁴ Lewis v. Epic Systems Corp.,⁵ and NLRB v. Murphy Oil.⁶ The issue in these cases is whether the right to engage in concerted activity guaranteed to workers by the National Labor Relations Act renders unenforceable an arbitration agreement that contains a class action waiver, since banding together in a class action could be deemed a form of concerted activity.

While we wait for the U.S. Supreme Court to determine whether the FAA trumps the rights set forth in the NLRA, it is interesting to look at a recent California Court of Appeal decision that found another way to avoid Concepcion and the FAA—the exemption of transportation workers from the FAA. Muro v. Cornerstone Staffing Solutions,⁷ which closely tracks the court of appeal holding in Garrido v. Air Liquide Industrial, U.S. LP,⁸ holds that if the FAA does not apply for any reason, then the courts may rely on California law pre-Concepcion, namely Gentry.

The plaintiff in Muro, a truck driver, brought a class action lawsuit for various claims such as meal and rest break violations and inaccurate wage statements. The employer filed a petition to compel arbitration of all claims on an individual basis, based on the class action waiver in the employee's...