Appellee brought suit in California Superior Court against his
former employer and appellants, two of its employees, alleging
breach of contract and related causes of action arising from a
dispute over commissions on securities sales. After appellee
refused to arbitrate, appellants filed a petition to compel
arbitration under §§ 2 and 4 of the Federal Arbitration Act, which
respectively provide that contractual arbitration provisions are
valid and enforceable and mandate their judicial enforcement. The
demand for arbitration was based on a provision in a form appellee
executed in connection with his employment application, whereby he
agreed to arbitrate any dispute with his employer. Appellee opposed
arbitration on the ground that his suit was authorized by
California Labor Code § 229, which provides that wage collection
actions may be maintained without regard to the existence of any
private agreement to arbitrate. The court refused to compel
arbitration, characterizing as "controlling authority"
Merrill
Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U.
S. 117, which upheld § 229 in the face of a Supremacy
Clause preemption challenge premised on an arbitration requirement
in a New York Stock Exchange rule, which was promulgated pursuant
to § 6 of the Securities Exchange Act of 1934 (1934 Act). The State
Court of Appeals affirmed. Both lower courts refused to consider
appellee's argument that appellants lacked "standing" to enforce
the arbitration agreement, since they were not parties to it.
Held:
1. Under the Supremacy Clause, § 2 of the Federal Arbitration
Act preempts § 229 of the California Labor Code. In enacting § 2,
Congress declared a national policy favoring arbitration and
withdrew the States' power to require a judicial forum for the
resolution of claims that contracting parties agreed to resolve by
arbitration.
Ware is distinguishable on the ground that
the language and policies of the 1934 Act and the regulations
promulgated thereunder evidenced no clear federal intent to require
arbitration. The oblique reference to the Federal Arbitration Act
in footnote 15 of
Ware cannot fairly be read as a
definitive holding that that Act does not preempt § 229, since the
footnote was concerned with federally created rights, and did not
address the issue of federal preemption of state-created rights.
Pp.
482 U. S.
489-491.
Page 482 U. S. 484
2. Appellee's contention that resolving in appellants' favor the
question of their "standing" to enforce the agreement to arbitrate
is a prerequisite under Article III of the Constitution to their
maintenance of this appeal is rejected. Appellee's "standing"
argument -- which this Court does not reach because the lower
courts did not address it -- simply presents the straightforward
contract interpretation issue whether the arbitration provision
inures to appellants' benefit and may be construed to cover the
present dispute. That issue may be resolved on remand, and its
status as an alternative ground for denying arbitration does not
prevent this Court from reviewing the lower courts' holdings on the
preemption question. P.
482 U. S.
492.
Reversed and remanded.
MARSHALL, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and BRENNAN, WHITE, BLACKMUN, POWELL, and SCALIA,
JJ., joined. STEVENS, J.,
post p.
482 U. S. 493,
and O'CONNOR, J.,
post p.
482 U. S. 494,
filed dissenting opinions.
JUSTICE MARSHALL delivered the opinion of the Court.
In this appeal, we decide whether § 2 of the Federal Arbitration
Act, 9 U.S.C. § 1
et seq., which mandates enforcement of
arbitration agreements, preempts § 229 of the California Labor
Code, which provides that actions for the collection of wages may
be maintained "without regard to the existence of any private
agreement to arbitrate." Cal.Lab.Code Ann. § 229 (West 1971).
I
Appellee, Kenneth Morgan Thomas, brought this action in
California Superior Court against his former employer, Kidder,
Peabody & Co. (Kidder, Peabody), and two of its employees,
appellants Barclay Perry and James Johnston. His complaint arose
from a dispute over commissions on the sale of securities. Thomas
alleged breach of contract, conversion, civil conspiracy to commit
conversion, and breach of
Page 482 U. S. 485
fiduciary duty, for which he sought compensatory and punitive
damages. After Thomas refused to submit the dispute to arbitration,
the defendants sought to stay further proceedings in the Superior
Court. Perry and Johnston filed a petition in the Superior Court to
compel arbitration; Kidder, Peabody invoked diversity jurisdiction
and filed a similar petition in Federal District Court. Both
petitions sought arbitration under the authority of §§ 2 and 4 of
the Federal Arbitration Act. [
Footnote 1]
The demands for arbitration were based on a provision found in a
Uniform Application for Securities Industry Registration form,
which Thomas completed and executed in connection with his
application for employment with Kidder, Peabody. That provision
states:
"I agree to arbitrate any dispute, claim or controversy that may
arise between me and my firm, or a customer, or any other person,
that is required to be arbitrated under the rules, constitutions or
by-laws of the organizations with which I register. . . ."
App. 33a. Rule 347 of the New York Stock Exchange, Inc. (1975),
with which Thomas registered, provides that
"[a]ny controversy between a registered representative and any
member or member organization arising out of the employment or
termination of employment of such registered representative by and
with such member or member organization shall be settled by
arbitration, at the instance of any such party. . . ."
App. 34a.
Page 482 U. S. 486
Kidder, Peabody sought arbitration as a member organization of
the New York Stock Exchange (NYSE). Perry and Johnston relied on
Thomas' allegation that they had acted in the course and scope of
their employment, and argued that, as agents and employees of
Kidder, Peabody, they were beneficiaries of the arbitration
agreement.
Thomas opposed both petitions on the ground that § 229 of the
California Labor Code authorized him to maintain an action for
wages, defined to include commissions, [
Footnote 2] despite the existence of an agreement to
arbitrate. He relied principally on this Court's decision in
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware,
414 U. S. 117
(1973), which had also considered the validity of § 229 in the face
of a preemption challenge under the Supremacy Clause, U.S.Const.,
Art. VI, cl. 2. Thomas maintained that the decision in
Ware stood for the proposition that the State's interest
in protecting wage earners outweighs the federal interest in
uniform dispute resolution.
The Superior Court denied appellants' petition to compel
arbitration. [
Footnote 3]
Thomas v. Kidder Peabody & Co., Civ. Action No.
C529105 (Los Angeles County, Apr. 23, 1985) (reprinted at App.
128a-129a). The court characterized
Ware as "controlling
authority" which held that, "in accordance with California Labor
Code Section 229, actions to collect wages may be pursued without
regard to private arbitration agreements."
Id. at 129a. It
further concluded that, since Thomas' claims for conversion, civil
conspiracy, and breach of fiduciary duty were ancillary to his
claim for breach of
Page 482 U. S. 487
contract and differed only in terms of the remedies sought, they
should also be tried and not severed for arbitration.
Id.
at 128a-129a. The Superior Court did not address Thomas' contention
that Perry and Johnston were "not parties" to the arbitration
agreement,
id. at 78a, and therefore lacked a contractual
basis for asserting the right to arbitrate, an argument Thomas
characterizes as one of "standing." [
Footnote 4]
Before the California Court of Appeal, appellants argued that
Ware resolved only the narrow issue whether § 229 was
preempted by Rule 347's provision for arbitration, given the
promulgation of that Rule by the NYSE pursuant to § 6 of the
Securities Exchange Act of 1934 (1934 Act), 48 Stat. 885, as
amended, 15 U.S.C. § 78f, and the authority of the Securities and
Exchange Commission (SEC) to review and modify the NYSE Rules
pursuant to § 19 of the 1934 Act, 15 U.S.C. § 78s. [
Footnote 5]
See 414 U.S. at
414 U. S. 135.
It was appellants' contention that, despite an indirect reference
to the Federal Arbitration
Page 482 U. S. 488
Act in footnote 15 of the
Ware opinion, the preemptive
effect of § 2 of the Act was not at issue in that case.
In an unpublished opinion, the Court of Appeal affirmed.
Thomas v. Perry, 2d Civ. No. B014485 (2d Dist., Div. 5,
Apr. 10, 1986) (reprinted at App. 139a-142a). It read
Ware's single reference to the Federal Arbitration Act to
imply that the Court had refused to hold § 229 preempted by that
Act and the litigants' agreement to arbitrate disputes pursuant to
Rule 347. Thus, the Court of Appeal held that a claim for unpaid
wages brought under § 229 was not subject to compulsory
arbitration, notwithstanding the existence of an arbitration
agreement. App. 140a-141a. Like the Superior Court, the Court of
Appeal also rejected appellants' argument, based on this Court's
decision in
Dean Witter Reynolds Inc. v. Byrd,
470 U. S. 213
(1985), that the ancillary claims for conversion, civil conspiracy,
and breach of fiduciary duty were severable from the
breach-of-contract claim, and should be arbitrated. App. 142a.
Finally, the Court of Appeal refused to consider Thomas' argument
that Perry and Johnston lacked "standing" to enforce the
arbitration agreement. The court concluded that Thomas had raised
this argument for the first time on appeal. [
Footnote 6]
Id. at 140a, n. 1.
Page 482 U. S. 489
The California Supreme Court denied appellants' petition for
review.
Id. at 144a. We noted probable jurisdiction,
[
Footnote 7] 479 U.S. 982
(1986), and now reverse.
II
"Section 2 is a congressional declaration of a liberal federal
policy favoring arbitration agreements, notwithstanding any state
substantive or procedural policies to the contrary. The effect of
the section is to create a body of federal substantive law of
arbitrability, applicable to any arbitration agreement within the
coverage of the Act."
Moses H. Cone Memorial Hospital v. Mercury Construction
Corp., 460 U. S. 1,
460 U. S. 24
(1983). Enacted pursuant to the Commerce Clause, U.S.Const., Art.
I, § 8, cl. 3, this body of substantive law is enforceable in both
state and federal courts.
Southland Corp. v. Keating,
465 U. S. 1,
465 U. S. 11-12
(1984) (§ 2 held to preempt a provision of the California Franchise
Investment Law that California courts had interpreted to require
judicial consideration of claims arising under that law). As we
stated in
Keating,
"[i]n enacting § 2 of the federal Act, Congress declared a
national policy favoring arbitration, and withdrew the power of the
states to require a judicial forum for the resolution of claims
which the contracting parties agreed to resolve by
arbitration."
Id. at
465 U. S. 10.
"Congress intended to foreclose state legislative attempts to
undercut the enforceability of arbitration agreements."
Id. at
465 U. S. 16
(footnote omitted). Section 2, therefore, embodies a clear federal
policy of requiring arbitration unless the agreement to arbitrate
is not part of a contract evidencing interstate commerce or is
revocable "upon such grounds as exist at law or in equity for the
revocation of any contract." 9 U.S.C. § 2. "We see nothing in the
Act indicating that the broad principle of enforceability
Page 482 U. S. 490
is subject to any additional limitations under state law."
Keating, supra, at
465 U. S. 11.
In
Ware, which also involved a dispute between a
securities broker and his former employer, we rejected a Supremacy
Clause challenge to § 229 premised in part on the contention that,
because the 1934 Act had empowered the NYSE to promulgate rules and
had given the SEC authority to review and modify these rules, a
private agreement to be bound by the arbitration provisions of NYSE
Rule 347 was enforceable as a matter of federal substantive law,
and preempted state laws requiring resolution of the dispute in
court. But the federal substantive law invoked in
Ware
emanated from a specific federal regulatory statute governing the
securities industry -- the 1934 Act. We examined the language and
policies of the 1934 Act and found "no Commission rule or
regulation that specifie[d] arbitration as the favored means of
resolving employer-employee disputes," 414 U.S. at
414 U. S. 135,
or that revealed a necessity for "nationwide uniformity of an
exchange's housekeeping affairs."
Id. at
414 U. S. 136.
The fact that NYSE Rule 347 was outside the scope of the SEC's
authority of review militated against finding a clear federal
intent to require arbitration.
Id. at
414 U. S.
135-136. Absent such a finding, we could not conclude
that enforcement of California's § 229 would interfere with the
federal regulatory scheme.
Id. at
414 U. S.
139-140.
By contrast, the present appeal addresses the preemptive effect
of the Federal Arbitration Act, a statute that embodies Congress'
intent to provide for the enforcement of arbitration agreements
within the full reach of the Commerce Clause. Its general
applicability reflects that "[t]he preeminent concern of Congress
in passing the Act was to enforce private agreements into which
parties had entered. . . ."
Byrd, 470 U.S. at
470 U. S. 221.
We have accordingly held that these agreements must be "rigorously
enforce[d]."
Ibid.; see Shearson/American Express Inc. v.
McMahon, ante at
482 U. S. 226;
Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473
Page 482 U. S. 491
U.S. 614,
473 U. S.
625-626 (1985). This clear federal policy places § 2 of
the Act in unmistakable conflict with California's § 229
requirement that litigants be provided a judicial forum for
resolving wage disputes. Therefore, under the Supremacy Clause, the
state statute must give way.
The oblique reference to the Federal Arbitration Act in footnote
15 of the
Ware decision, 414 U.S. at
414 U. S. 135,
cannot fairly be read as a definitive holding to the contrary.
There, the Court noted a number of decisions as having "endorsed
the suitability of arbitration to resolve
federally
created rights."
Ibid. (emphasis added). Footnote 15
did not address the issue of federal preemption of
state-created rights. Rather, the import of the footnote
was that the reasoning -- and perhaps result -- in
Ware
might have been different if the 1934 Act "itself ha[d] provided
for arbitration."
Ibid. [
Footnote 8]
Page 482 U. S. 492
Our holding that § 2 of the Federal Arbitration Act preempts §
229 of the California Labor Code obviates any need to consider
whether our decision in
Byrd, supra, at
470 U. S. 221,
would have required severance of Thomas' ancillary claims for
conversion, civil conspiracy, and breach of fiduciary duty from his
breach-of-contract claim. We likewise decline to reach Thomas'
contention that Perry and Johnston lack "standing" to enforce the
agreement to arbitrate any of these claims, since the courts below
did not address this alternative argument for refusing to compel
arbitration. However, we do reject Thomas' contention that
resolving these questions in appellants' favor is a prerequisite to
their having standing under Article III of the Constitution to
maintain the present appeal before this Court. As we perceive it,
Thomas' "standing" argument simply presents a straightforward issue
of contract interpretation: whether the arbitration provision
inures to the benefit of appellants and may be construed, in light
of the circumstances surrounding the litigants' agreement, to cover
the dispute that has arisen between them. This issue may be
resolved on remand; its status as an alternative ground for denying
arbitration does not prevent us from reviewing the ground
exclusively relied upon by the courts below. [
Footnote 9]
Page 482 U. S. 493
The judgment of the California Court of Appeal is reversed, and
the case is remanded for further proceedings not inconsistent with
this opinion.
It is so ordered.
[
Footnote 1]
Section 2 provides, in relevant part:
"A written provision in . . . a contract evidencing a
transaction involving commerce to settle by arbitration a
controversy thereafter arising out of such contract or transaction,
or the refusal to perform the whole or any part thereof, . . .
shall be valid, irrevocable and enforceable, save upon such grounds
as exist at law or in equity for the revocation of any
contract."
9 U.S.C. § 2.
Section 4 mandates judicial enforcement of arbitration
agreements where a party has failed, neglected, or refused to
arbitrate. 9 U.S.C. § 4.
[
Footnote 2]
Section 200(a) of the California Labor Code defines "wages" to
include amounts earned on a "commission basis." Cal.Lab.Code Ann. §
200(a) (West 1971). The California Superior Court and the
California Court of Appeal held below that the commissions at issue
in this case fall within the statutory definition. App. 128a,
140a.
[
Footnote 3]
The Federal District Court gave this ruling preclusive effect
and entered a final order dismissing Kidder, Peabody's petition in
the parallel proceeding.
Kidder, Peabody & Co. v.
Thomas, Civ. Action No. 851257RJK (CD Cal., Sept. 29, 1986)
(reprinted at App. 245a);
id. at 235a.
[
Footnote 4]
Having concluded that this Court's decision in
Merrill
Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U.
S. 117 (1973), was dispositive, the California Superior
Court also did not address Thomas' alternative argument that the
arbitration agreement in this case constitutes an unconscionable,
unenforceable contract of adhesion because
"(a) the selection of arbitrators is made by the New York Stock
Exchange, and is presumptively biased in favor of management; and
(b) the denial of meaningful . . . discovery is unduly oppressive
and frustrates an employee's claim for relief."
App. 74a.
[
Footnote 5]
The Court of Appeal rejected appellants' contention that
amendments to the 1934 Act since this Court's decision in
Ware removed the theoretical underpinnings of that
decision by expanding the scope of the SEC's authority under § 19
to review and modify NYSE rules.
See 15 U.S.C. § 78s(c).
Appellants continue to make this argument, in their appeal before
this Court, as an alternative basis for distinguishing
Ware. Brief for Appellants 17-20 (citing S.Rep. No. 94-75,
pp. 22-38 (1975);
Drayer v. Krasner, 572 F.2d 348, 356-359
(CA2),
cert. denied, 436 U.S. 948 (1978)). However,
because we rest our decision exclusively on the Federal Arbitration
Act, we decline to consider the preemptive effect of the amended
1934 Act as it relates to Thomas' agreement to be bound by NYSE
Rule 347.
[
Footnote 6]
Objecting to appellants' request for a formal Statement of
Decision from the Superior Court following summary denial of their
motion to compel, Thomas argued that appellants had "no standing"
to seek an order compelling arbitration. App. 120a. Perry and
Johnston replied that their "standing" to seek arbitration inhered
in their status as agents and employees of Kidder, Peabody, and as
beneficiaries of the agreement between Kidder, Peabody and Thomas.
Id. at 124a. In response, Thomas simply argued that Perry
and Johnston had submitted no supporting evidence to show they had
acted as agents for Kidder, Peabody.
Id. at 132a. The
Superior Court did not amend a Proposed Statement of Decision,
see id. at 128a-129a, to address these arguments, and it
was formally adopted as the Statement of Decision from which Perry
and Johnston appealed.
Id. at 135a.
Having based its decision "squarely on
Ware," the Court
of Appeal also declined to reach Thomas' alternative ground for
supporting the Superior Court's decision not to compel arbitration:
his contention that the arbitration provision constitutes an
unconscionable, unenforceable contract of adhesion.
Id. at
141a, n. 3;
see n 4,
supra.
[
Footnote 7]
Jurisdiction over this appeal is provided by 28 U.S.C. §
1257(2).
See Southland Corp. v. Keating, 465 U. S.
1,
465 U. S. 6-8
(1984).
[
Footnote 8]
First among the decisions cited in footnote 15 was
Wilko v.
Swan, 346 U. S. 427
(1953), in which the Court resolved a conflict between the Federal
Securities Act of 1933 and the Federal Arbitration Act by holding
that the policies of the former prevailed, and that an arbitration
agreement, for which enforcement was sought under the latter, was
invalid. No federal preemption question was presented.
Only the unexplained citation to
Prima Paint Corp. v. Flood
& Conklin Mfg. Co., 388 U. S. 395
(1967), could be construed as a reference to principles of federal
preemption. However, that case provides no support for Thomas'
position. It arose as a diversity action in which one party to a
contract containing an arbitration clause asserted a right under
state law to judicial resolution of his claim of fraud in the
inducement of the contract. The Court held that, while § 2 of the
Federal Arbitration Act authorized judicial determination of a
claim that the arbitration clause itself had been procured through
fraud, a court could not decide whether fraud had induced the
making and performance of the contract generally, since this claim
fell within the broad scope of the agreement to arbitrate.
Id. at
388 U. S. 404.
The Court dismissed the argument that the asserted right to
judicial resolution adhered in state substantive law which a
federal court sitting in diversity was bound to follow under the
rule of
Erie R. Co. v. Tompkins, 304 U. S.
64 (1938). It reasoned instead that Congress had enacted
the substantive provisions of the Federal Arbitration Act pursuant,
in part, to its constitutional power to regulate interstate
commerce, 388 U.S. at
388 U. S.
404-405, a distinction which endows these provisions
with preemptive force under the Supremacy Clause.
[
Footnote 9]
We also decline to address Thomas' claim that the arbitration
agreement in this case constitutes an unconscionable, unenforceable
contract of adhesion. This issue was not decided below,
see nn.
4 and |
4 and S. 483fn6|>6,
supra, and may likewise be considered on remand.
We note, however, the choice-of-law issue that arises when
defenses such as Thomas' so-called "standing" and unconscionability
arguments are asserted. In instances such as these, the text of § 2
provides the touchstone for choosing between state law principles
and the principles of federal common law envisioned by the passage
of that statute: an agreement to arbitrate is valid, irrevocable,
and enforceable,
as a matter of federal law, see Moses H. Cone
Memorial Hospital v. Mercury Construction Corp., 460 U. S.
1,
460 U. S. 24
(1983), "save upon such grounds as exist at law or in equity for
the revocation of any contract." 9 U.S.C. § 2 (emphasis added).
Thus, state law, whether of legislative or judicial origin, is
applicable if that law arose to govern issues concerning the
validity, revocability, and enforceability of contracts generally.
A state law principle that takes its meaning precisely from the
fact that a contract to arbitrate is at issue does not comport with
this requirement of § 2.
See Prima Paint, supra, at
388 U. S. 404;
Southland Corp. v. Keating, 465 U.S. at
465 U. S. 16-17,
n. 11. A court may not, then, in assessing the rights of litigants
to enforce an arbitration agreement, construe that agreement in a
manner different from that in which it otherwise construes
nonarbitration agreements under state law. Nor may a court rely on
the uniqueness of an agreement to arbitrate as a basis for a state
law holding that enforcement would be unconscionable, for this
would enable the court to effect what we hold today the state
legislature cannot.
JUSTICE STEVENS, dissenting.
Despite the striking similarity between this case and
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware,
414 U. S. 117
(1973), the Court correctly concludes that the precise question now
presented was not decided in
Ware. Even though the
Arbitration Act had been on the books for almost 50 years in 1973,
apparently neither the Court nor the litigants even considered the
possibility that the Act had preempted state-created rights. It is
only in the last few years that the Court has effectively rewritten
the statute to give it a preemptive scope that Congress certainly
did not intend.
See Southland Corp. v. Keating,
465 U. S. 1,
465 U. S. 18-21
(1984) (STEVENS, J., concurring in part and dissenting in part).
The dicta in some of these recent cases are admittedly broad enough
to cover this case,
see ante at
482 U. S.
489-491, but since none of our prior holdings is on
point, the doctrine of
stare decisis is not controlling.
Cf. Shearson/American Express Inc. v. McMahon, ante at
482 U. S.
268-269 (STEVENS, J., concurring in part and dissenting
in part). Accordingly, because I share
Page 482 U. S. 494
JUSTICE O'CONNOR's opinion that the States' power to except
certain categories of disputes from arbitration should be preserved
unless Congress decides otherwise, I would affirm the judgment of
the California Court of Appeal.
JUSTICE O'CONNOR, dissenting.
The Court today holds that § 2 of the Federal Arbitration Act
(Act), 9 U.S.C. § 1
et seq., requires the arbitration of
appellee's claim for wages despite clear state policy to the
contrary. This Court held in
Southland Corp. v. Keating,
465 U. S. 1 (1984),
that the Act applies to state court as well as federal court
proceedings. Because I continue to believe that this holding
was
"unfaithful to congressional intent, unnecessary, and, in light
of the [Act's] antecedents and the intervening contraction of
federal power, inexplicable,"
id. at
465 U. S. 36
(O'CONNOR, J., dissenting), I respectfully dissent.
Even if I were not to adhere to my position that the Act is
inapplicable to state court proceedings, however, I would still
dissent. We have held that Congress can limit or preclude a waiver
of a judicial forum, and that Congress' intent to do so will be
deduced from a statute's text or legislative history, or "from an
inherent conflict between arbitration and the statute's underlying
purposes."
Shearson/American Express Inc. v. McMahon, ante
at
482 U. S. 227.
As JUSTICE STEVENS has observed, the Court has not explained why
state legislatures should not also be able to limit or preclude
waiver of a judicial forum:
"We should not refuse to exercise independent judgment
concerning the conditions under which an arbitration agreement,
generally enforceable under the Act, can be held invalid as
contrary to public policy simply because the source of the
substantive law to which the arbitration agreement attaches is a
State, rather than the Federal, Government. I find no evidence that
Congress intended such a double standard to apply, and I would not
lightly impute such an intent to the 1925 Congress
Page 482 U. S. 495
which enacted the Arbitration Act."
Southland Corp. v. Keating, supra, at
465 U. S. 21.
Under the standards we most recently applied in
Shearson/American Express Inc. v. McMahon, ante p.
482 U. S. 220,
there can be little doubt that the California Legislature intended
to preclude waiver of a judicial forum; it is clear, moreover, that
this intent reflects an important state policy. Section 229 of the
California Labor Code specifically provides that actions for the
collection of wages may be maintained in the state courts "without
regard to the existence of any private agreement to arbitrate."
Cal.Lab.Code Ann. § 229 (West 1971). The California Legislature
thereby intended
"to protect the worker from the exploitative employer who would
demand that a prospective employee sign away in advance his right
to resort to the judicial system for redress of an employment
grievance,"
and § 229 has "manifested itself as an important state policy
through interpretation by the California courts."
Merrill
Lynch, Pierce, Fenner & Smith v. Ware, 414 U.
S. 117,
414 U. S. 131,
414 U. S.
132-133 (1973).
In my view, therefore, even if the Act applies to state court
proceedings, California's policy choice to preclude waivers of a
judicial forum for wage claims is entitled to respect. Accordingly,
I would affirm the judgment of the California Court of Appeal.