Taking up the question of whether class arbitration waivers in employment arbitration agreements may be enforced to preclude class arbitrations by employees whose statutory rights to overtime pay have allegedly been violated, the California Supreme Court concluded that, “at least in some cases, the prohibition of classwide relief would undermine the vindication of the employees’ unwaivable statutory rights and would pose a serious obstacle to the enforcement of the state’s overtime laws.” In concluding that the specific classwide arbitration ban at issue was against public policy, the court noted that individual awards in wage and hour cases tend to be modest; that a current employee who individually sues his or her employer is at greater risk of retaliation; and that some individual employees may not sue because they are unaware that their legal rights have been violated. “Of course” the court acknowledged, “in cases like the present, the trial court would be comparing class arbitration with the individual arbitration methods the employer offers, rather than comparing individual with classwide litigation. We do not foreclose the possibility that there may be circumstances under which individual arbitrations may satisfactorily address the overtime claims of a class of similarly aggrieved employees, or that an employer may devise a system of individual arbitration that does not disadvantage employees in vindicating their rights. But class arbitration waivers cannot, consistent with the strong public policy behind section 1194, be used to weaken or undermine the private enforcement of overtime pay legislation by placing formidable practical obstacles in the way of employees’ prosecution of those claims.” See Gentry v. Superior Court,No.S141502. 2007 WL 2445122 (Cal. Aug. 30, 2007).
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