United States:
California Supreme Court Breaks From Federal Precedent On PAGA
11 September 2023
Jenner & Block
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The California Supreme Court issued a much-anticipated Private
Attorneys General Act (PAGA) decision in Adolph v. Uber
Technologies, Inc. in July, departing from the United States
Supreme Court's 2022 ruling in Viking River Cruises v.
Moriana and holding that non-individual PAGA standing does not
disappear after a plaintiff is compelled to arbitrate his or her
individual PAGA claims. This plaintiff-friendly decision
definitively answers this question of California law and may
encourage an increase in PAGA claims going forward.
PAGA permits an "aggrieved employee" to bring
representative claims on behalf of him or herself and other workers
subject to the same alleged violations of law. In Viking River
Cruises, the U.S. Supreme Court—acknowledging that
California courts would have the final say on California
law—held that if a plaintiff is compelled to arbitrate
individual claims because of an arbitration agreement, the
remaining non-individual claims must be dismissed for lack of
standing. While California state law provides PAGA actions cannot
be divided into individual and non-individual claims due to an
agreement to arbitrate individual claims, the U.S. Supreme Court
found that the Federal Arbitration Act (FAA) preempted that state
law.
The California Supreme Court disagreed, finding no conflict
between the FAA and California's PAGA framework. On that basis,
the Court held that a plaintiff does not lose standing in court
simply because he or she is compelled to arbitrate individual
claims.
The Court did not determine whether non-individual claims should
be stayed pending the outcome of arbitration of individual claims,
but it left open the possibility that courts "may" decide
to pause proceedings during that interim period. Nevertheless,
regardless of the new law stated in Adolph, the California
Court of Appeal's decision in Rocha v. U-Haul Co.
earlier this year still provides a useful tool for employers to end
a PAGA suit altogether once an employer can prevail against the
named plaintiff.
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