California employers enthusiastically acquired the choice by the USA 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 workers to arbitrate the person a part of their declare beneath the California Labor Code Non-public Attorneys Common Act (“PAGA”). Some employers hoped that Viking River Cruises would considerably rein in PAGA litigation.
PAGA authorizes aggrieved California workers to file lawsuits to get better civil penalties on behalf of themselves, different workers, and the State of California for violations of California’s Labor Code. PAGA penalties can shortly accumulate given the numerous 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 regulation, this a part of the choice is just not 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 the USA Supreme Court docket on that difficulty. Whereas a call by the California Supreme Court docket in Adolph stays pending, a number of California courts of attraction have declined to comply with the conclusion by the USA Supreme Court docket concerning PAGA standing.
For instance, in Galarsa v. Dolgen California, LLC, 88 Cal. App. fifth 639 (2023) (evaluate granted), the California Court docket of Attraction, Fifth District, held {that a} plaintiff who has been ordered to arbitrate her particular person PAGA declare can however keep a courtroom motion to pursue a consultant PAGA declare looking for civil penalties for alleged Labor Code violations suffered by different workers. 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 Attraction, Fourth District, reached the identical conclusion.
Not like these disappointing (for California employers) choices, the latest choice by the Court docket of Attraction, Second District in Rocha v. U-Haul Co. of California, 88 Cal. App. fifth 65 (2023), gives hope for employers. In that case, the appeals courtroom held that difficulty preclusion bars a consultant PAGA declare when the plaintiff litigates particular person Labor Code claims in arbitration and loses. Given {that a} plaintiff will need to have personally skilled a violation of not less than a single provision of the Labor Code to deliver a consultant PAGA declare, Rocha emphasizes the vital hurdle particular person PAGA litigants face in arbitration. It is also vital to notice that the choice in Rocha is opposite to that by the California Court docket of Attraction, 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 might proceed to hope the California Supreme Court docket decides Adolph v. Uber Applied sciences Inc. of their favor, that appears unlikely, notably if the California courts of attraction choices mentioned above rejecting the USA Supreme Court docket’s conclusion concerning PAGA standing are predictive.
