Sometimes cases from other areas of law can have a strong impact on employment law in California. For example, Laster v. AT&T Mobility LLC involved class action waivers in consumer contracts. Laster filed a class action complaining about being charged sales tax on phones that AT&T advertised as "free" once you bought the service plan. AT&T sought to enforce an arbitration provision in the sales contract and Laster countered that the provision was unconscionable because it required him to waive his right to proceed as a class action. The 9th Circuit court of appeals held that the class action waiver was unconscionable under California law and that the Federal Arbitration Act (FAA) did not preempt California law regarding unconscionability.
AT&T Mobility asked the Supreme Court to weigh in on the issue. In doing so, it argued that class-wide arbitration is not necessary to protect the consumers’ rights. It further argued (pdf) that
Class-wide arbitration affords none of the benefits of traditional, individual arbitration–it is at least as burdensome, expensive, and time-consuming as litigation–while multiplying the risks enormously because judicial review is so limited.
Finally, AT&T Mobility argued that the FAA preempts state law on this issue (including California law regarding unconscionability) as applied to arbitration agreements.
Last week, the Supreme Court agreed to hear the matter (under the title AT&T Mobility v. Concepcion). The decision, which is still many months away (oral argument has yet to be scheduled), could have a significant impact on California unconscionability analysis in the arbitration context.