American Lawyer senior writer Alison Frankel reports on a recent California appellate court ruling that “just made a high-stakes debate at the state Supreme Court over mandatory arbitration and California’s Private Attorney General [AG] Act more interesting than ever.” According to Frankel, an intermediate appellate court determined that a mandatory arbitration clause in an employment agreement “does not bar a suit under the California private AG law because private agreements can’t waive the state’s rights.” Currently pending before California’s high court, and apparently attracting a flood of amicus briefs, is a case asking whether employers can avoid litigation under the private AG Act by means of mandatory arbitration clauses.

California employers have evidently been adopting these clauses to bar their employees from litigating representative actions following the U.S. Supreme Court’s 2011 ruling in AT&T Mobility v. Concepcion, which held that the Federal Arbitration Act preempted a state contract law deeming class-action waivers in arbitration agreements unenforceable. Courts throughout the country have apparently split over whether Concepcion precludes private AG actions brought by employees who signed mandatory arbitration agreements. Frankel opines, “The California Supreme Court’s ruling could also affect the future of private state AG or qui tam actions on behalf of the state as an alternative way to hold defendants accountable to groups of employees or consumers who would otherwise be permitted only to arbitrate individual claims.” See Thomson Reuters News & Insights, June 5, 2013.