Sonic-Calabasas v. Moreno: Remanded in Light of Concepcion

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The stage has been set for the California Supreme Court’s first major ruling interpreting AT&T v. Concepcion.  The U.S. Supreme Court recently vacated a judgment invalidating arbitration provisions in Sonic-Calabasas v. Moreno, and remanded the case back to the California high court for further consideration in light of ConcepcionSonic-Calabasas v. Moreno, 80 U.S.L.W. 3260 (U.S. Oct. 31, 2011), reversing and remanding 51 Cal. 4th 659 (2011). 

In its now-vacated ruling, the California Supreme Court held that provisions in an arbitration agreement that purportedly waived an employee’s right to seek an administrative “Berman” hearing before the Labor Commissioner are substantively and procedurally unconscionable.  Sonic-Calabasas v. Moreno, 51 Cal. 4th 659, 686 (2011) (available here).  The court also found that the Berman hearing waiver violated public policy by infringing upon the employee’s statutory rights to the hearing and “the possible protections that follow from it.  Id. at 678.  Lastly, the court concluded that the Federal Arbitration Act does not preempt either holding.  Id. at 695. 

Now that Sonic-Calabasas has been remanded with the directive to apply Concepcion, the California Supreme Court seems poised to issue a ruling that limits Concepcion to its factual circumstances.  The court previously denied the petition for review in Brown v. Ralphs, 197 Cal. App. 4th 489 (2011), thereby sustaining the Court of Appeal’s holding that that Concepcion is inapplicable to claims brought pursuant to PAGA, the California Labor Code’s Private Attorneys General Act.