A California Court of Appeal decision handed employers a solid win by reinforcing the principle that employees may not be able to pursue California Labor Code Private Attorneys General Act (PAGA) penalty claims in court if an employer has already prevailed in arbitration. The decision in Rodriguez v. Lawrence Equipment Inc. said that an arbitrator’s finding in favor of an employer can serve to bar relitigation of the same wage and hour claims in a post-arbitration PAGA representative action. Below are key considerations from the decision and three proactive steps employers should consider taking in light of this positive decision.
The plaintiff alleged his employer committed wage and hour labor code violations and filed a class action lawsuit to recover both his own damages and PAGA penalties on behalf of California’s Labor and Workforce Development Agency.
The trial court ordered the plaintiff to arbitrate his individual wage and hour claims because he had previously executed an arbitration agreement with his employer. It stayed his claim pending the outcome of the arbitration.
Following a two-day arbitration, the arbitrator issued a ruling in favor of the employer, ruling that the plaintiff had not experienced any labor code violations.
The plaintiff then attempted to relitigate his PAGA claims in court. However, the trial court found that he lacked standing to assert a PAGA claim given the arbitrator’s...
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