In a landmark 8-1 ruling, the U.S. Supreme Court, in Viking River Cruises, Inc. v. Moriana (No. 20-1573, June 15, 2022), provided California employers with much needed relief from the onslaught of wage-hour claims brought under the California Labor Code Private Attorneys General Act of 2004, Cal. Labor Code sections 2698 et seq. (the “PAGA”). The Court emphasized the preemptive effect of the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (the “FAA”), finding that the FAA preempts a rule of California law that invalidates arbitration agreements containing waivers of the right to assert representative PAGA claims. The Court overruled the California Supreme Court’s rule to the contrary in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348, 380 (2014). The immediate impact of Viking River is to authorize motions by California employers utilizing mandatory arbitration agreements with class action waivers to dismiss PAGA claims brought in court or, alternatively, to compel arbitration of them.

PAGA authorizes “aggrieved employees” to act as private attorneys general to enforce California’s wage and hour law. PAGA has resulted in a proliferation of private lawsuits brought by such private attorneys general on behalf of themselves and other current or former employees to obtain civil penalties that previously could have been recovered only by the State in an enforcement action brought by California’s Labor and Workforce Development Agency (the “LWDA”).

In reversing the...

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