Many recent California court decisions addressing arbitration of Private Attorney General Act (“PAGA”) claims have focused on issues of federal preemption, public policy, and statutory intent. A recent California decision throws in a new variable – contractual intent – establishing that even arbitration agreements with technically proper language, may be unenforceable if the agreement’s terminology is outdated.
For years, California employers have looked to arbitration agreements as a tool to manage the volume and cost of PAGA litigation. But for nearly a decade, Iskanian v. CLS Transportation Los Angeles, LLC (2014), was treated as a hard stop on compelling any part of a PAGA claim to arbitration.
In 2022, the U.S. Supreme Court disrupted that framework in Viking River Cruises, Inc. v. Moriana creating a path—at least in theory—for employers to compel arbitration of an employee’s individual PAGA component and attempt to resolve threshold issues quickly (including whether the named plaintiff is an “aggrieved employee”). The California Supreme Court then weighed in with Adolph v. Uber Technologies, Inc. (2023) (CDF’s blog on Adolph can be found here) confirming that even when an individual claim is compelled to arbitration, the representative PAGA claim generally is not dismissed and may remain pending in court. Since then, California courts have seen an ongoing wave of arguments testing the outer boundaries of what can—...
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