California Supreme Court Issues key Arbitration Ruling
1 min read
Oct 17, 2013
Today, the California Supreme Court issued its opinion in Sonic-Calabasas A, Inc. v. Moreno, No. S174475 (October 17, 2013), holding that the Federal Arbitration Act preempts California's rule categorically prohibiting waiver of a Berman hearing in a pre-dispute arbitration agreement imposed on an employee as a condition of employment.
As California employers may recall, the California Supreme Court previously held that it is against public policy and unconscionable for an employer to require that, as a condition of employment, an employee waives the right to a dispute resolution forum established by the Legislature to assist employees in recovering wages owed (such as a Berman hearing). The California Supreme Court held that if one of the parties was dissatisfied with the result of the Berman hearing, it could move to arbitrate the wage dispute consistent with the arbitration agreement, just as a dissatisfied party could obtain a trial in court without such an agreement.
Since then, the U.S. Supreme Court granted certiorari in this case and vacated the judgment. The case was remanded for consideration in light of the U.S. Supreme Court's decision in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __ [131 S.Ct. 1740], wherein the Court clarified the limitations imposed by the FAA on a state's ability to enforce its rules of unconscionability on parties to arbitration agreements.
The California Supreme Court in today's decision holds that state courts may continue to enforce unconscionability rules that do not interfere with the fundamental attributes of arbitration. While a court cannot refuse to enforce an arbitration agreement simply because it requires the employee to bypass a Berman hearing, the agreement may still be found to be unconscionable if it is unreasonably one-sided in favor of the employer, for instance.
Topics
Featured Insights

In The News
Oct 23, 2026
Michael Dowell Discusses Potential Impact of Proposition 44 on California Community Clinics

In The News
Oct 21, 2026
Scott Seaman Says Walmart Ruling is an "Aberration" in the Opioid Insurance Battle

Event
October 21 – 23, 2026
D.L. Morriss Presents on International Banking Litigation and AI Regulation

Press Release
Oct 20, 2026
Seasoned Litigator Joins Hinshaw's Aviation and Aerospace Team in Chicago

Consumer Crossroads: Where Financial Services and Litigation Intersect
Oct 19, 2026
Refile, Repeat: Ohio’s Savings Statute Allows for Unlimited Bites of a Time-Barred Claim

Consumer Crossroads: Where Financial Services and Litigation Intersect
Oct 16, 2026
Key Takeaways from the 2026 ACVL Conference for the Auto Finance Industry

Press Release
Oct 16, 2026
Nia Binns Re-Appointed Health and Wellness Committee Co-Chair of the BWLA

In The News
Oct 16, 2026
Jennifer Driscoll Explains How Bond Request Spurred AG Settlement in Paramount Merger

Consumer Crossroads: Where Financial Services and Litigation Intersect
Oct 15, 2026
OCC Releases Debanking Report on Largest Banks; CFPB Announces Follow-On Initiative



