Following the ruling in AT&T Mobility LLC v. Concepcion, the California Supreme Court held in Sonic-Calabasas A., Inc. v Moreno (“Sonic II”) that an arbitration agreement containing the waiver of a Berman hearing in an adhesive employment contract signed as a condition of employment was not per se unconscionable. However, the court narrowed the ruling of AT&T Mobility and held that unconscionability was still a relevant defense to the enforcement of arbitration clauses. To do this, the court distinguished generally applicable state laws that did not undermine fundamental attributes of arbitration and those that did, and found that adhesive arbitration agreements that required the waiver of a Berman hearing had to provide for an available, reasonable determination of wage disputes. The holding leaves adhesive arbitration agreements in employment contracts open to inquiries by the courts as to their enforceability in contexts outside Berman hearing waivers. Practitioners in California would be wise to tailor their adhesive employment arbitration agreements to align with the procedures provided in Berman hearings as closely as possible, lest the agreements be found unconscionable. While this case initially seems like acquiescence by the California Supreme Court to the United States Supreme Court’s ruling in AT&T Mobility v. Concepcion, the California Supreme Court again refused to accept defeat with regards to unconscionability.
Ryan Cummins, If There's a Will, There's a Way: The California Supreme Court's Sidestep of the U.S. Supreme Court, 6 Y.B. Arb. & Mediation 349 (2014).