Arbitration, PAGA: 4th Dist. Div. 2 Holds That Losing Non-PAGA Claims In Arbitration Does Not Preclude Litigation Of PAGA Claims

Modified Opinion Addresses Viking River Cruises v. Moriana.

        In a partially published and modified opinion, the Court of Appeal holds that an employee's loss of Labor Code violation claims in arbitration does not preclude her from bringing a PAGA claim that the trial court had stayed. The basis for this ruling is that the plaintiff was acting in different capacities, bringing Labor Code claims on her own behalf in arbitration, and acting in a different and representative capacity in the PAGA action. The PAGA action, which seeks civil penalties as a remedy, "is fundamentally a law enforcement action designed to protect the public and not to benefit private parties." Eleni Gavriiloglou v. Prime Healthcare Management, Inc., No. E076832 (4/2  9/20/22) (Ramirez, Slough, Fields).

        COMMENT: The original opinion did not address Viking River Cruises v. Moriana, the subject of our 6/19/22 post. The modified opinion seems to suggest that in Viking River, SCOTUS didn't really understand California law: "It . . .  held that the Federal Arbitration Act preempts a state-law rule that precludes the arbitration of an individual PAGA claim separately from a representative PAGA claim. .... In Prime’s view, Viking River 'explicitly recognizes an individual claim under PAGA . . . .' This is mere wordplay. What the Supreme Court called, as shorthand, an 'individual PAGA claim' is not actually a PAGA claim at all. It would exist even if PAGA had never been enacted. It is what we are calling, more accurately, an individual Labor Code claim."

        We note one difference between Gavriiloglou case and Viking River. In Gavriiloglou, the issue in the published part of the opinion is whether the arbitrator's award denying non-PAGA claims precluded the PAGA claims, and the court held that it did not. In Viking River, the issue was different. SCOTUS held that the employee could be compelled to arbitrate PAGA individual claims (which Justice Ramirez now says are really better described as Labor Code claims).

         Look forward to ongoing confusion about standing to bring representative PAGA claims in California in cases where there are mandatory arbitration provisions. 

 

Comments

[Marc Alexander]

Ryan, thanks for your comment. Readers can view our post on Rocha here:

https://www.calmediation.org/2023/03/paga-issue-preclusion-arbitrators-ruling-in-favor-of-corporation-did-not-preclude-employees-from-sui.html

[Ryan McCoy]

Interestingly, the Second District Court of Appeal, Division 1, found the opposite in Thomas Rocha v. U-Haul Co. of California, B322599 (Feb 2, 2023).

https://casetext.com/case/rocha-v-u-haul-co-of-cal

I enjoy your blog.