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In the months since the California Supreme Court filed its landmark decision in Iskanian v. CLS Transportation Los Angeles, many analysts have characterized the decision as good news for the business community, focusing on the court’s partial retreat from its long-standing hostility to many arbitration agreements and its willingness to approve a class action waiver.

In fact, the decision is a mixed bag for business. It seems clear agreements to arbitrate between California businesses and their customers and employees will be more likely to be enforced than ever before in the months and years ahead. Certainly, waivers of the right to file class actions will become even more commonplace than they already are. But on the other hand, potentially high-dollar value claims under PAGA—the Private Attorney General Act—may well become more common. And Iskanian does little to discourage claims that arbitration agreements are unconscionable because they set up a procedure which unreasonably favors one side.

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