Following the United States Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana (2022) U.S. 639 and the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc. (2023) 14 Cal. 5th 1104, when faced with employee arbitration agreements, California trial courts have regularly compelled plaintiffs to arbitrate their individual Private Attorneys General Act (“PAGA”) claims first, while staying their representative, non-individual PAGA claims.
In an attempt to avoid arbitrating the named plaintiffs’ individual PAGA claims – and knowing that the representative, non-individual claims would be dismissed if the employers prevailed in an individual arbitration – more than a few plaintiff’s counsel have tried to circumvent Adolph by asserting that their clients were not bringing individual claims at all, but were only bringing claims on behalf of others.
In response, employers have argued that, based on the clear statutory language, every PAGA action necessarily includes an individual PAGA action such that those individual claims have to be arbitrated first.
The U.S. Supreme Court’s June 15, 2022 decision in Viking River Cruises v. Moriana could have a tremendous impact upon pending and future litigation, as well as employment practices in the state.
For some California employers, it will impact pending Private Attorneys General Act (“PAGA”) litigation where the named plaintiff has an arbitration agreement with a class and representative action waiver.
In a recent post addressing the U.S. Supreme Court oral argument in Viking River Cruises v. Moriana, we mentioned that employers in California will want to consider the “pros and cons” of arbitration agreements should an employer-friendly decision be issued in that case, rather than rush to implement them.
In response, more than a few people have asked the same or similar questions -- What are the “cons” of arbitration agreements? Why wouldn’t an employer want to use arbitration agreements, particularly if they will foreclose Private Attorney General Act (“PAGA”) actions in California?
There are “cons” to these agreements -- and they are not insignificant.
Blog Editors
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