DDWK Prevails on Important Employment Law Matter: Court of Appeal Rules that Federal Arbitration Act Applies to Local Paratransit Operations, Gives Effect to Class Action Waiver, and Compels Former Employee to Arbitrate Wage-and-Hour Claims

In a significant victory for employers that is potentially applicable to all California businesses, on July 15, 2022, the California Court of Appeal issued a published decision in Evenskaas v. California Transit Inc., ruling that a former employee paratransit driver’s class action lawsuit could not proceed, reversing a decision by a Los Angeles trial court. In the appeal prosecuted and won by Brad Lebow and Kevin DeSantis, partners in Dunn DeSantis Walt & Kendrick’s San Diego office, the appellate court rejected plaintiff’s argument that because he drove only within Los Angeles County, his lawsuit was governed exclusively by California law. Instead, the appellate court ruled that California Transit’s business affects interstate commerce because: (1) California Transit provides federally-mandated paratransit services; and (2) transportation services in general fundamentally involve interstate commerce. As such, the plaintiff’s claims were governed by the Federal Arbitration Act and the class action waiver he signed with California Transit, which would have been invalid under California law, was enforceable to bar his class action claims. As a result, the appellate court held that the plaintiff’s class claims are to be dismissed and that the plaintiff must arbitrate his individual claims.

The effect of this published decision on business operations for other California companies – especially those involved in transportation – could be significant. California businesses now have additional reason to argue that class action waivers executed by their employees must be given effect by California courts, in reliance on this precedential decision. And while the ultimate reach of the Evanskaas decision will not be known for some time, the potential for it to restrict plaintiff’s lawyers from pursuing class action claims that can jeopardize a business’s existence should give businesses and business owners renewed hope that risks of class actions can be mitigated by effective class action waivers.

Dunn DeSantis Walt & Kendrick’s attorneys have over 35 years of experience assisting clients in the transportation industry, including corporate and business structuring, contract drafting and negotiation, EDD audits and regulatory issues, business disputes, employment law guidance, and defense of class action lawsuits including misclassification claims, wage-and-hour issues, as well as PAGA actions.

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