Calif. High Court Ruling Eschews Arbitration Act Preemption

Law360 (September 2, 2019, 7:07 PM EDT) -- In last Thursday’s decision in OTO LLC v. Kho,[1] the California Supreme Court once again set itself up for a direct confrontation with the U.S. Supreme Court over proper respect for established principles of Federal Arbitration Act preemption.

Eight years ago, California’s high court set itself up in exactly the same way over exactly the same issues. In Sonic-Calabasas A Inc. v. Moreno,[2] it held arbitration agreements which required employees to arbitrate wage claims in the face of an employee election to pursue administrative remedies before the state labor commissioner (a so-called “Berman hearing”), were categorically unconscionable and unenforceable.

After the...

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