There’s still value in taking employee cases to arbitration even if the employee can later pursue the claim in court on behalf of other aggrieved employees, says Michael Afar of Seyfarth Shaw in his take on the California Supreme Court’s decision last week in Adolph v. Uber.
Under the closely watched ruling, an employee who’s compelled to arbitrate his employment-related claim doesn’t forfeit his standing to represent others in a lawsuit against the employer under California’s Private Attorneys General Act (PAGA).
The decision raises employer concerns over whether it makes sense to compel a matter to arbitration if the employee can still turn around and sue the company on behalf of others.
But there’s a silver lining to the decision, Afar says; to the extent the employee is found not to be aggrieved under the state’s labor code, the employer has effectively dismantled the case before it can get to the courts.
“If you can get some adjudication on the merits against the employee in arbitration, and the arbitrator finds they were not harmed, not aggrieved, under the labor code, then they no longer have standing to pursue the representative claim under PAGA in state court,” Afar told Legal Dive. “That’s a big sword in favor of employers that the California Supreme Court has allowed to go forward.”
The decision is unique to California, but several other states are considering laws that are similar to the Private Attorneys General Act. The law...
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