Earlier this month, the California Court of Appeal (2d Dist.) ruled that issue preclusion bars a derivative Private Attorneys General Act (PAGA) claim where the plaintiff litigates individual Labor Code claims in arbitration and loses. Rocha v. U-Haul Co. of Cal., 2023 WL 1462594 (Cal. Ct. App. Feb. 2, 2023) (certified for publication). Rocha, while at odds with a prior decision from the 4th Dist., has important implications for the closely watched Adolph v. Uber Technologies, Inc. case, in which the California Supreme Court is poised to rule on a critical question following last summer’s blockbuster U.S. Supreme Court decision in Viking River Cruises.
The plaintiffs in Rocha filed a lawsuit against their direct employer and multiple co-defendants, including their alleged joint employer, U-Haul. The complaint alleged whistleblower retaliation under Labor Code Section 1102.5 and other non-wage/hour claims. When the defendants moved to compel arbitration, the plaintiffs moved to amend their complaint to add a PAGA claim against U-Haul for the alleged Section 1102.5 violation. The trial court denied leave to amend on the grounds that the plaintiffs lacked standing and compelled arbitration. The arbitrator ruled against the plaintiffs on all claims, and the trial court confirmed the award.
On appeal, the court rejected the plaintiffs’ argument that the trial court abused its discretion by denying leave to amend to add the PAGA claim against U-Haul, finding that issue...
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