Wage and hour claims asserted under the Private Attorneys General Act of 2004 (“PAGA”) are often compared to class actions, but without the same gatekeeping principles. Under PAGA, a single employee can potentially represent hundreds or thousands of other employees for a garden variety of wage and hour allegations, even if the representative did not experience the same violations—and even if the representative only ever experienced one violation. PAGA’s lack of standards, combined with the persnickety character of the Labor Code, are a recipe for “sue first, ask questions later” lawsuits and difficult decisions to fight or fold.
The difficulty is further compounded by PAGA’s peculiar remedy. In a PAGA action, the plaintiff only obtains civil penalties, designed to equate to penalties that the State of California might have assessed itself in a prosecution. For this reason, California courts have historically regarded PAGA lawsuits as immune from arbitration agreements signed by employees. The U.S. Supreme Court stepped in and ruled otherwise under the Federal Arbitration Act. In Viking River Cruises v. Moriana (2022) 142 S.Ct. 1906, the U.S. Supreme Court issued two employer-friendly rulings. First, a plaintiff-employee’s “individual PAGA claims”[1] can be compelled to binding arbitration on an individual basis. Second, interpreting California law, the plaintiff-employee loses standing and cannot pursue the “non-individual PAGA claims,”[2] resulting in a dismissal of the...
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