(Ca.) Workers win major court ruling

http://www.latimes.com/business/la-fi-arbitrate31aug31,1,3881658.story?ctrack=2&cset=true

California justices say employees can file class-action lawsuits even if they've signed arbitration agreements.
By Molly Selvin, Los Angeles Times Staff Writer
August 31, 2007
The California Supreme Court handed workers a major victory Thursday, allowing them to bring class-action lawsuits alleging labor code violations even if they had signed agreements with their employers requiring them to arbitrate such disputes.

By letting workers bypass these now-ubiquitous arbitration clauses, the ruling probably will add to the high volume of back-pay and overtime class-action cases already on court dockets, experts say, and will probably set a standard for courts in other states to follow.

"For many workers, class-action lawsuits are the only type of lawsuits they can bring against their employer" because attorneys are reluctant to take on individual suits in which the potential awards are small, said Michael Rubin, a San Francisco lawyer who represented a former Circuit City worker in the case that went to the state Supreme Court.

"Today's decision prevents employers from continuing this divide-and-conquer approach and reinstitutes the worker's rights to join with their fellow workers to sue for common violations of statutory rights," Rubin said.

Some of the primary beneficiaries of the ruling would be thousands of white-collar workers in industries such as retail, food service, insurance, technology and banking who are called managers or assistant managers but who spend much of their day ringing up sales, stocking shelves or sweeping the floor alongside the workers they supervise.

Class-action lawsuits by such employees seeking back pay for overtime and missed breaks have risen dramatically over the last decade. Most eventually settle, with employers typically paying millions of dollars to avoid the prospect of bigger losses at trial. In response to these suits, thousands of employers have asked their workers to sign agreements promising to resolve their disputes through arbitration instead of going to court, Rubin said.

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