Also,There Was No Basis Here For Sending The PAGA Representative Claims To Arbitration Rather Than Court
In Jones v. J.C. Penney Corporation, Inc., Case No. B246674 (2/4 Sept. 5, 2014) (Edmon, Willhite, Manella) (unpublished), plaintiff brought a representative claim under the Labor Code Private Attorneys General Act of 2004 (PAGA), alleging employer J.C. Penney did not permit her and others to sit at work, even when it would not interfere with performance of their duties, and did not provide employees with suitable seats. The Court of Appeal has affirmed the trial court’s order denying a petition to compel arbitration, on the grounds that Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014) holds that employee waivers of the right to bring representative PAGA claims are unenforceable.
The unenforceability of a waiver of the representative PAGA claims left as a remaining issue whether plaintiff’s claims were to proceed in litigation or arbitration.
In connection with that issue, J.C. Penney conceded that the employee could not arbitrate PAGA claims unless the Labor & Workforce Development Agency (LWDA) also signed the arbitration agreement. This concession makes sense, because the California courts view PAGA claims as public disputes between an employer and the state, though initiated by the employee as a type of “qui tam” dispute in which a 75% of the civil penalties will go to the state, and 25% will go to the aggrieved employee. As the LWDA was not about to sign an arbitration agreement, there was no basis for arbitrating the PAGA claims, leaving them to be litigated.
J.C. Penney also urged that the Court of Appeal “stay this appeal until the high court can receive and rule on an anticipated petition for writ of certiorari in Iskanian.” The Court of Appeal did not follow that suggestion. However, if a writ is to be anticipated in Iskanian, then we have hardly heard the last word about the arbitrability of PAGA claims in the face of a waiver of the right to bring a representative action.