Rex Heinke Discusses 9th Circuit Ruling in Arbitration Case

Rex Heinke, co-head of Akin Gump’s Supreme Court and appellate practice, was quoted by Law360 in the article “9th Circ. Warns Employers Not To Overreach On Arbitration.”

In a unanimous ruling on October 28, the 9th Circuit affirmed the denial of Ralphs Grocery Company’s motion to compel arbitration in an action by an employee asserting claims under California labor law on behalf of the plaintiff and a proposed class of other grocery employees. The court held that Ralphs’ arbitration policy was both procedurally and substantively unconscionable and rejected the company’s argument that the Federal Arbitration Act (FAA) preempted the application of the state’s unconscionability doctrine in this context.

In discussing the ruling, Heinke said, “The Ninth Circuit is saying that the FAA can’t be used to strike down every state law that might invalidate an arbitration agreement.” He added that, if a state law “is just hostile to arbitration as such then it is preempted by the FAA, but if the state law is designed to make sure arbitration is a fair proceeding, then the FAA is not going to preempt it.”

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