2013 is shaping up to be the year that that party ended for state evasion of the Federal Arbitration Act. States have traditionally relied on a number of stratagems to avoid the preemptive force of the FAA’s “liberal federal policy favoring arbitration.” (Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 [1983]). One was to hide behind the FAA’s “savings clause,” which permits states to refuse to enforce arbitration agreements on “such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The savings clause preserves generic contract defenses such as fraud, duress or unconscionability, and ensures that they are not preempted. States made liberal use of the savings clause to avoid the FAA’s enforcement mandate by deploying a veneer to generality to save rules aimed at limiting the enforcement of arbitration agreements.Continue Reading 9th Inning, Two Outs, None On for California State Courts That Ignore Federal Arbitration Act

California employers, who, only thirteen months ago, thought they no longer had to worry about wage/hour class actions by employees over meal and other rest breaks need to worry again.

When the California Supreme Court handed down its blockbuster decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012), thirteen months ago, California employers collectively sighed in relief. Why? Because Brinker’s main holding was that employers only need to provide an opportunity for employees to take meal breaks. There was no need for employees to actually clock out and stop work for breaks. Because liability turned on whether an employee consented to missing a break, most observers concluded that such an inherently employee-by-employee would make class action lawsuits and class-based relief impossible, unless a rash employer prohibited employees from taking breaks.Continue Reading Alice is Back in Wonderland: Meal Break Policies Must be 100% Legal to Blunt Employee Class Actions in California Even in Absence of Actual Violation