We may not have relief from high gas prices, workforce labor shortages, or high inflation, but, alas, Californians got some good news on limiting unwarranted, shakedown lawsuits. The Supreme Court limited a California labor law that allowed private lawsuits to be filed against employers from groups of workers who previously agreed to resolve disputes through individual arbitration.
PAGA — the California Private Attorneys General Act – attempted to supersede federal law by voiding pre-existing arbitration agreements with wage and hour class action lawsuits.
The case, Viking River Cruises, Inc. v. Moriana, was brought after Angie Moriana quit her job in 2017 as a sales agent in Los Angeles for Viking River Cruises and alleged she did not receive her last paycheck on time. She had agreed previously to settle claims via private arbitration but used PAGA to file a private suit against Viking alleging multiple violations on behalf of a large group of employees. But the Supreme Court ruled in favor of Viking, saying that employees are required to abide by their signed agreements to arbitrate disputes.
The Supreme Court’s 8-to-1 decision sends a strong message. Business owners have long complained that they had become the unwilling victims of a manufactured cottage industry by lawyers using the private right of action to profit off small businesses. A large part of the settlement goes to the attorneys, leaving employers forced to cut jobs and raise the prices of their products in...
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