The California Supreme Court just made it much easier for corporations to enforce arbitration agreements against consumers and employees. The Court ruled that claims for unpaid wages can be sent to arbitration rather than first going to the state labor board. Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal. 4th 1109 (Sonic II). The state labor board offers an administrative procedure which typically faster, cheaper, and easier for employees.

The Court took the unusual step of reviewing and then reversing its prior decision handed down in 2011. Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659 (Sonic I). Sonic I favored employees. In Sonic I the Court held that it violated public policy and was unconscionable for an employer to require an employee, as a condition of employment, (a) to waive the right to file and pursue unpaid wage claims with the state labor board and (b) to force the employee to engage in arbitration.

However, the Court had to reconsider Sonic I in light of a ruling from the U.S. Supreme Court in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __ [131 S.Ct. 1740] (Concepcion) that strengthened enforcement of arbitration agreements.

The end result is that employees will be forced to arbitrate wage disputes.Sonic II will have a ripple effect, making it much easier for corporations to force all kinds of disputes into arbitration.