California employers enthusiastically received the decision by the United States Supreme Court in Viking River Cruises v. Moriana, 142 S. Ct. 1906 (2022). That case held the Federal Arbitration Act allows employers to compel employees to arbitrate the individual part of their claim under the California Labor Code Private Attorneys General Act (“PAGA”). Some employers hoped that Viking River Cruises would substantially rein in PAGA litigation.
PAGA authorizes aggrieved California employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for violations of California’s Labor Code. PAGA penalties can quickly accumulate given the many possible Labor Code violations and the fact that the default penalty is $100 per employee per pay period for an initial Labor Code violation, and $200 per employee per pay period for each subsequent violation.
In Viking River Cruises, the Court also concluded that an employee would lack standing to pursue a representative PAGA claim after his or her individual PAGA claim was resolved through arbitration. However, because the Court’s conclusion interpreted California law, this part of the decision is not binding on California courts. The California Supreme Court is poised to decide in Adolph v. Uber Technologies Inc. whether it agrees with the United States Supreme Court on that issue. While a decision by the California Supreme Court in Adolph remains pending, several California...
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