California employers enthusiastically obtained the choice by america Supreme Court docket in Viking River Cruises v. Moriana, 142 S. Ct. 1906 (2022). That case held the Federal Arbitration Act permits employers to compel staff to arbitrate the person a part of their declare underneath the California Labor Code Personal Attorneys Normal Act (“PAGA”). Some employers hoped that Viking River Cruises would considerably rein in PAGA litigation.
PAGA authorizes aggrieved California staff to file lawsuits to recuperate civil penalties on behalf of themselves, different staff, and the State of California for violations of California’s Labor Code. PAGA penalties can rapidly accumulate given the various attainable Labor Code violations and the truth that the default penalty is $100 per worker per pay interval for an preliminary Labor Code violation, and $200 per worker per pay interval for every subsequent violation.
In Viking River Cruises, the Court docket additionally concluded that an worker would lack standing to pursue a consultant PAGA declare after his or her particular person PAGA declare was resolved by way of arbitration. Nonetheless, as a result of the Court docket’s conclusion interpreted California legislation, this a part of the choice isn’t binding on California courts. The California Supreme Court docket is poised to determine in Adolph v. Uber Applied sciences Inc. whether or not it agrees with america Supreme Court docket on that problem. Whereas a call by the California Supreme Court docket in Adolph stays pending, a number of California courts of attraction have declined to observe the conclusion by america Supreme Court docket relating to PAGA standing.
For instance, in Galarsa v. Dolgen California, LLC, 88 Cal. App. fifth 639 (2023) (assessment granted), the California Court docket of Enchantment, Fifth District, held {that a} plaintiff who has been ordered to arbitrate her particular person PAGA declare can however preserve a courtroom motion to pursue a consultant PAGA declare searching for civil penalties for alleged Labor Code violations suffered by different staff. In Piplack v. In-N-Out Burgers, 88 Cal. App. fifth 1281 (2023) and Nickson v. Shemran, Inc., 90 Cal. App. fifth 121 (2023), the California Court docket of Enchantment, Fourth District, reached the identical conclusion.
Not like these disappointing (for California employers) selections, the latest resolution by the Court docket of Enchantment, Second District in Rocha v. U-Haul Co. of California, 88 Cal. App. fifth 65 (2023), supplies hope for employers. In that case, the appeals courtroom held that problem preclusion bars a consultant PAGA declare when the plaintiff litigates particular person Labor Code claims in arbitration and loses. Given {that a} plaintiff should have personally skilled a violation of not less than a single provision of the Labor Code to convey a consultant PAGA declare, Rocha emphasizes the essential hurdle particular person PAGA litigants face in arbitration. It is also essential to notice that the choice in Rocha is opposite to that by the California Court docket of Enchantment, Fourth District, in Gavriiloglou v. Prime Healthcare Administration, Inc., 83 Cal.App.fifth 595 (2022), which held that an arbitration award within the employer’s favor didn’t deprive the plaintiff worker of standing to pursue a consultant PAGA declare.
In sum, Viking River Cruises has not been the game-changer some California employers hoped. Though California employers could proceed to hope the California Supreme Court docket decides Adolph v. Uber Applied sciences Inc. of their favor, that appears unlikely, significantly if the California courts of attraction selections mentioned above rejecting america Supreme Court docket’s conclusion relating to PAGA standing are predictive.
