Court of Appeal Recognizes It Is Bound By Iskanian, Until SCOTUS Resolves Validity Of PAGA Waivers.
Montano v. The Wet Seal Retail, Inc., B244107 (2/4 Jan. 7, 2015) (Epstein, Willhite, Manella) (published) is the latest case to follow the holding in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014), that waiver of the employee’s right to litigate Private Attorneys General Act (PAGA) (Lab. Code, section 2699) representative claims is unenforceable. In Montano, this had even greater consequence, because the paragraph containing the PAGA waiver provision stated if the waiver was found to be unenforceable for any reason by a court, then the entire arbitration agreement was void and unenforceable. Thus, because the PAGA waiver was not severable, the entire arbitration provision failed.
The Court of Appeal recognizes in footnote 5 “that several federal district courts in this state have found PAGA waivers to be enforceable under the FAA and Concepcion.” However, until SCOTUS rules on the issue, the Court of Appeal is “bound to follow the California Supreme Court’s decision in Iskanian that PAGA waivers are invalid under state law.” In Iskanian, the parties filed a petition for certiorari on September 22, 2014, No. 14-341. So stay tuned!