On July 17, 2023, the California Supreme Court ruled that an employee maintains standing to prosecute a representative lawsuit under the Private Attorneys General Act of 2004 (“PAGA”) even if the employee’s own individual PAGA claims are submitted to a separate arbitration. The ruling in Erik Adolph v. Uber Technologies, Inc., S274671, represents a major blow to California employers who had hoped to use employment-based arbitration agreements to keep PAGA litigation risks under control.
Originally enacted in 2004 with the lofty goal of enhancing California’s Labor Code enforcement objectives, PAGA is more often regarded as a recipe for “sue first, ask questions later” lawsuits and shakedown settlements—driven by the pursuit of attorneys’ fees rather than justice. PAGA permits any employee to sue an employer for Labor Code violations and recover steep civil penalties on behalf of all other employees. PAGA litigation usually moves forward with little regard for the severity of the violations or the merits of the plaintiff’s own claims. The potential exposure can be catastrophic.
An employer can break up a class action with a well-crafted arbitration agreement and a timely motion to compel arbitration—the end result finds the plaintiff-employee in individual arbitration while the remaining class action claims simply go away. But PAGA is not a class action, and California courts historically ruled that PAGA claims are immune from arbitration agreements, guaranteeing the...
CHESHIRE Police says that it has arrested a Warrington woman on suspicion of wasting police time after resources from two police forces were diverted to ‘false kidnap claims’. In the early hours o...