Even after the Supreme Court’s favorable decision in Epic Systems Corp. v. Lewis (“Epic”), California courts will not compel a PAGA claim to arbitration.

In Collie v. The Icee Co., a former employee of The Icee Company, Tauran Collie, alleged a single cause of action under California’s Private Attorney General Act (“PAGA”) against her former employer. The Icee Company attempted to compel Collie’s claim to arbitration based on a broadly worded pre-dispute arbitration agreement that Collie signed when he began his employment.

The Icee Company argued that two decisions which held that PAGA claims could not be compelled to arbitration, Betancourt and Iskanian, were no longer good law after the United States Supreme Court’s decision in Epic, which held that class action waivers in arbitration agreements must be enforced and individual arbitration must be compelled if the agreement contains such a provision.

The Court of Appeal was not persuaded that Epic should change the court’s analysis of PAGA claims. It held that “Epic does not address ‘the unique nature of a PAGA claim’—that is, the ‘PAGA litigant’s status as ‘the proxy or agent’ of the state’ and his or her ‘substantive role in enforcing our labor laws on behalf of state law enforcement agencies.’”  Thus, Epic does not undermine Iskanian’s or Betancourt’s characterization of PAGA claims as law enforcement actions in which plaintiffs step into the shoes of the state.” And because Collie had yet to step into those shoes, he could not have agreed to arbitrate on behalf of the state when he signed the arbitration agreement. The Court simply held that because the state did not agree to arbitrate its PAGA claim, “Icee cannot enforce a contractual provision to bind a nonparty [the state].”

PAGA’s unique nature has, at least for the time being, immunized PAGA claims for arbitration, and it appears that will be the case for the foreseeable future, much to the chagrin of California employers.

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Photo of Philippe A. Lebel Philippe A. Lebel

Philippe (Phil) A. Lebel represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, defamation, trade secrets, and breach of contract litigation, in both the single-plaintiff and class- and/or representative-action context, at both the trial and…

Philippe (Phil) A. Lebel represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, defamation, trade secrets, and breach of contract litigation, in both the single-plaintiff and class- and/or representative-action context, at both the trial and appellate level, and before administrative agencies.

In addition to his litigation work, Phil regularly advises clients regarding compliance with federal, state and local employment laws, and assists a variety of companies and financial firms in evaluating labor and employment issues in connection with corporate transactions. Phil also has experience assisting employers with sensitive employee investigations and trainings.  Phil also represents employers in connection with labor law matters, such as labor arbitrations and proceedings before the National Labor Relations Board.

Phil has assisted clients in a wide array of sectors including in the biotech, education, entertainment, financial services, fitness, healthcare, high-tech, legal services, manufacturing, media, professional services, sports, and staffing industries, among others.

Phil regularly speaks on emerging issues for employers and has been published or quoted in Law360, the Daily JournalThe Hollywood ReporterBusiness Insurance, and SHRM.org regarding a variety of labor and employment law topics.

During college, Phil worked on political campaigns in Atlanta, Georgia and Birmingham, Alabama, and was an intern with the National Gay and Lesbian Task Force and the Gay and Lesbian Victory Fund. Phil is a former member of the Board of Directors of the AIDS Legal Referral Panel.

Photo of Cole Lewis Cole Lewis

Cole Lewis is an associate in the Labor & Employment Department.

Cole graduated from UCLA School of Law, where he worked as a law clerk for Public Counsel of Los Angeles and advocated for benefit recipients in the Department of Public Social Services.

Cole Lewis is an associate in the Labor & Employment Department.

Cole graduated from UCLA School of Law, where he worked as a law clerk for Public Counsel of Los Angeles and advocated for benefit recipients in the Department of Public Social Services. He has also previously worked as a summer associate in Proskauer’s Labor & Employment Department.

Prior to law school, Cole received his Bachelor’s degree in Journalism at Indiana University, where he graduated cum laude.