Following a remand from the California Supreme Court, the California Court of Appeal vacated its prior decision refusing to enforce a class waiver in a dispute over wages and remanded the case to the trial court with instructions to apply the multi-factor test set forth in Gentry.

In McLeod v. Ralphs Grocery Co., Nos. B187844, B187854, 2008 WL 921155 (Cal. Ct. App. Apr. 7, 2008), McLeod and other employees of Ralphs Grocery filed two class actions alleging violations of the California law governing the right to overtime pay. In response, Ralphs Grocery filed a motion to compel arbitration pursuant to the employees' arbitration agreements, all of which contained a class action waiver.

The trial court denied the motion to compel on the ground that the class waiver rendered the arbitration agreement unenforceable under California law. That ruling was upheld on appeal, and Ralphs Grocery appealed to the California Supreme Court which remanded the case with instructions to vacate the prior opinion and reconsider the case in light of Gentry v. Superior Court, 165 P.3d 556 (Cal. 2007).

In Gentry, the California Supreme Court held that class waivers are not categorically unenforceable in cases concerning overtime pay. Instead, the Court set forth a multi-factor test for determining their enforceability.

On remand, the court of appeal determined that the trial court should apply the Gentry test in the first instance. Accordingly, the court of appeal remanded the case to the trial court with instructions to apply Gentry to the facts of this case.