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The following is not meant to be legal advice.

The California Supreme Court in Gentry v. Superior Court answered the issue of whether class arbitration waivers in employment arbitration agreements are enforceable.

The background facts:  Gentry, a Circuit City employee, filed a class action lawsuit on behalf of salaried customer-service managers he alleged were illegally misclassified by Circuit City as exempt employees not entitled to overtime pay. Gentry signed an arbitration agreement that contained a class arbitration waiver. Circuit City compelled arbitration pursuant to an arbitration agreement that contained a class action waiver.

If a provision would lead to a de facto waiver of the statutory right to receive overtime pay or other statutory rights, and would interfere with employees' ability to vindicate unwaivable rights and to enforce the overtime laws, then an arbitration agreement would be unenforceable.

The California Supreme Court concluded that class action waivers in employment arbitration agreements should not be enforced if a trial court determines that class arbitration would be more effective than individual arbitration in resolving employee rights. In determining whether an arbitration agreement was unenforceable, procedural unconscionability could be found in employment arbitration agreements even when employees are given an opportunity to opt-out of arbitration. This was because immigrants with limited English language skills, may be unfamiliar with overtime or other statutory laws.