The United States Supreme Court has agreed to take a closer look at the enforceability of arbitration agreements that bar representative claims brought under PAGA, a California law that allows individual employees to police labor code violations.
In Private Attorneys General Act (“PAGA”) cases, employees stand in the shoes of the state, representing allegedly “aggrieved employees” asserting California Labor Code violations against their employer. However, the Supreme Court could soon reign in the thousands of PAGA suits brought by employees every year, by allowing employers to enforce arbitration agreements with their employees that prohibit them from litigating PAGA claims on a representative basis.
The U.S. Supreme Court in AT&T Mobility LLC v. Concepcion and Epic Systems Corp. v. Lewis, previously held that arbitration agreements with class action waivers are enforceable. However, the California Supreme Court, in Iskanian v. CLS Transportation Los Angeles LLC, carved out PAGA claims and held that arbitration agreements cannot include representative PAGA waivers.
The result of these seemingly contradictory holdings has been that bilateral arbitration – between an employer and individual employee – has not been allowed to flourish in California, as the Supreme Court intended, according to Viking River Cruises, Inc. (“Viking”) in its petition to the Court for certiorari.
The Viking case stems from a 2018 PAGA lawsuit filed in state court by an employee, Angie Moriana....
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