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Sunday, October 11, 2026

SCOTUS Invalidates CA Law Preventing Arbitration of Individual PAGA Claims When a Valid Arbitration Agreement Exists - Troutman Pepper

In its 12th case regarding arbitration in the last five years, the Roberts court fascination with the dispute resolution method continues. In the second of two decisions regarding arbitration this week, the Court reestablished the primacy of the Federal Arbitration Act (FAA). In reasoning similar to the line of decisions that have enforced class-action waivers, the Court enforced an arbitration agreement and required arbitration of an employee’s individual claims under the California Labor Code Private Attorneys General Act of 2004 (PAGA).

In Viking River Cruises v. Moriana, the Court held that the FAA preempts California law that invalidates contractual waivers of an employee’s right to assert representative claims under PAGA. PAGA provides that employees alleging an employer has violated one provision of the California Labor Code may also step into the shoes of the state attorney general and assert that the employer has also harmed others by violating different provisions of the California Labor Code (Representative PAGA Claims). In doing so, the Supreme Court overruled part of Iskanian v. CLS Transportation, an important California Supreme Court ruling. In that case, the California Supreme Court ruled that California law required that a contractual provision by which an employee waived his or her right to assert Representative PAGA Claims was unenforceable. The California Supreme Court’s ruling in Iskanian also held that agreements to separately litigate individual PAGA...



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