Almost a year ago, SCOTUS held in Viking River Cruises, Inc. v. Moriana, that when an employer and employee have a valid arbitration agreement and the employee brings claims under the Private Attorney General’s Act (PAGA), the individual claims of the employee can be compelled into arbitration on an individual basis and the remaining representative actions of the PAGA claims are to be dismissed. Learn more about the Vikings decision here.
This decision in Vikings was seen as a win by California Employers given PAGA’s negative financial impact to business owners. It also allows employers to benefit from the agreement made with the employee to arbitrate disputes as planned. However, the law as interpreted in California provided that employee claims brought under PAGA, cannot be divided into individual and representative claims through an arbitration agreement. Individual claims can be arbitrated and the remaining PAGA claims will be heard by the Court.
While there have been decisions about how courts should address this conflict since Vikings, only one was granted review by the California Supreme Court back in July 2022– Adolph v. Uber Technologies, Inc. (“Adolph”). Since last July, many California courts were conflicted by Vikings.
How will courts rule on whether to compel a PAGA case to arbitration? While some decisions were made, they landed on both sides of the issue waiting for a date to be set in Adolph. More often than not, courts decided to stay cases until the California Supreme Court provided the lower courts more clarity by deciding Adolph. Chauvel & Glatt even experienced this firsthand when a case they were litigating on this very issue was stayed by the court.
So now what? Now, employers will not have to wait much longer to find out the fate of whether California will follow SCOUTS’ decision or California will go in a different direction. The Adolph case will finally be heard by the California Supreme Court on May 10, 2023. With the Court only having 90 days to tell us their decision, we will know by the end of summer what employers will face with this monumental PAGA decision. Chauvel & Glatt will keep you up to date on this important decision.
Making sure your business is California labor compliant is the first step to ensuring protection against PAGA lawsuits. To learn more about PAGA, how it can affect your business, how to get into compliance to avoid a PAGA lawsuit, contact the Employer Lawyers at Chauvel & Glatt.
The material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes. For information on your particular circumstances, please contact Chauvel & Glatt at 650-881-3021.