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Arbitration: PAGA

Arbitration, PAGA, Waiver: First District, Div. 3 Holds Employee's Waiver Of Representative PAGA Claims Is Ineffective

California Courts of Appeal Continue To Side With California Supreme Court Regarding Standing To Bring Representative PAGA Claims.

        Affirming the trial court's denial of an employer's motion to compel arbitration, the Court of Appeal holds that the employees' waiver of a right to bring representative PAGA claims is unenforceable. Nicole DeMarinis et al. v. Heritage Bank of Commerce, A167091 (1/3  1/8/24) (Fujisaki, Tucher, Petrou).

        Let's summarize the PAGA standing issue in California: Under Iskanian, California courts had not allowed employers to "split" PAGA claims between individual and representative claims, because Iskanian treated a PAGA claims as a dispute between the employer and the State, which did not waive the right to arbitrate, and not a dispute between an employer and an employee. However, the SCOTUS, in Viking River Cruises, Inc. v. Moriana, 596 U.S. ___ (2022) [142 S. Ct. 1906], held that precluding the splitting of PAGA causes of action into a representative and an individual cause of action was preempted by the Federal Arbitration Act, to the extent that this resulted in the inability to compel arbitration of individual PAGA claims in California. Once the individual cause was moved to arbitration, Justice Samuel Alito concluded, the employee had no standing to bring the PAGA representative action in court. Justice Sonia Sotomayor concurred, but added that California courts, which have the role of interpreting California law, might conclude instead that employees do have standing to bring PAGA representative actions. The California Supreme Court, in Adolph v. Uber Technologies, Inc., S274671 (Cal. Sup. Ct. 7/17/23) (Liu; Guerrero, Corrigan, Kruger, Groban, Jenkins, Evans), has had the last word, if not the final word, agreeing that employees have standing to bring representative PAGA claims. See our post dated 9/5/23.