When an arbitration agreement contained an unenforceable waiver of claims under California's Private Attorneys General Act ("PAGA") and the agreement further provided that the PAGA waiver was non-severable from the remainder of the arbitration agreement, a California court of appeal held that the arbitration agreement could not be enforced.
In Montano v. The Wet Seal Retail, Inc., the arbitration agreement signed by Montano contained a waiver of the right to "make claims with others as a representative or a member of a class or as a private attorney general." However, the agreement also provided that if the waiver is found to be unenforceable by a court or arbitrator, then the entire agreement is void and unenforceable. In light of the California Supreme Court's recent decision in Iskanian ( July 2014 FEB), the trial court in Montano held that the waiver of the right to assert a PAGA claims was unenforceable and therefore the entire arbitration agreement could not be enforced pursuant to the parties' non-severability agreement.
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