Under What Circumstances Could Predispute Arbitration Agreements Properly Subject PAGA Claims To Arbitration?
The arbitrability of PAGA claims continues to generate court opinions.
In Christman v. Apple American Group II, LLC, B271937 (2/4 10/4/17) (Manella, Epstein, Collins) (unpublished), the Court notes that Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014) "did not expressly address the circumstances -- if any -- under which predispute arbitration agreements might properly subject PAGA claims to arbitration." For example, if there is an opportunity for class arbitration, is it proper to submit the PAGA claims to arbitration?
Following Iskanian, however, two appellate courts have concluded "that because a PAGA plaintiff asserts that claim as an agent of the state, a predispute arbitration agreement the plaintiff has executed as an individual does not subject the claim to arbitration because the right underlying the claim is then subject to the state's control." Christman follows that reasoning in holding that plaintiff employee's PAGA claims are not arbitrable, in circumstances where the arbitration agreement relies on the FAA to govern its interpretation and enforcement, and the employer has abandoned its argument that the employee "may assert only individual claims in arbitration."
COMMENT: The Court acknowledges that its opinion it is at odds with Valdez v. Terminix Intern. Co. Ltd. Partnership (9th Cir. 2017), in which the federal court reasoned that "the plaintiff, as the state's representative, was free to agree to arbitration." The Christman court finds Valdez unpersuasive: first, because the PAGA claim is not a dispute between the employer and an employee, given California's interest; and second, because the predispute waiver is entered into by the plaintiff individually, at a time when she is not the state's representative.
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