WASHINGTON — In a victory for California employers, the Supreme Court on Wednesday sharply limited a state labor law that has authorized private lawsuits on behalf of groups of workers, even if they had agreed to resolve their disputes through individual arbitration.
In an 8-1 decision, the court ruled the Federal Arbitration Act preempts or overrides the state law.
California is the only state to authorize such private suits as a means of enforcing its labor laws. But by doing so, the state allows employees to escape the binding arbitration agreements they signed when they were hired, the court said.
