I'm attending Bridgeport's 6th Annual Wage & Hour Litigation Conference. Today, one topic of discussion is the subject of class arbitrations after Gentry. According to Steven Katz, partner at Reed Smith LLP, Gentry is one of the California Supreme Court's most erroneously-reasoned decisions in quite some time. That's not the interesting part (it's the funny part). The interesting commentary comes from how the defense bar hopes to limit Gentry.
Mr. Katz starts from the premise that Gentry. does not state a bright-line rule precluding class action waivers in all wage & hour class actions. The defense bar hopes to elicit further review of Gentry by challenging trial and appellate orders that impose a bright-line rule when invalidating arbitration agreements with such waivers. The protective measure that plaintiffs should take is to draft proposed orders that identify the four-factor test from Gentry as having been satisfied.
The second major challenge to Gentry that is being tested at the appellate level is a species of "field" preemption. The defense contention is that Gentry allows for a type of contract impairment that isn't directed at arbitration agreements directly, but nevertheless affects only those types of agreements. This argument disregards the fact that the principles in Gentry are subject-neutral. It is merely the nature of the effect of these agreements that renders them invalid. The factors in Gentry don't seek out just arbitration agreements with class action waivers. Despite that weakness in the defense-side argument, plaintiffs should handle these arguments with great care. This species of "field" premption is very complex, and the attorneys bringing these arguments often have an advantage in the form of repeated experience with them. Don't take a novel preemption argument lightly.