As we reported (here), on June 15, 2022, a near unanimous U.S. Supreme Court held that the Federal Arbitration Act (“FAA”) preempted the California Supreme Court’s controversial decision in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014), which held that actions brought under the California Labor Code Private Attorneys General Act (“PAGA”) could not be divided into individual and representative claims through an agreement to arbitrate. See Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906, __ U.S. __ (2022). Not only did the Viking River majority opinion hold that individual PAGA claims could be compelled to arbitration on an individual basis (i.e., to recover penalties for violations allegedly suffered by the plaintiff alone), it also held that the residual “representative” component of any PAGA claim (i.e., the portion of the claim seeking penalties for Labor Code violations experienced by other employees) should be dismissed once the individual PAGA claim is compelled to arbitration. See id. at 1925 (“When an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit.”).
In the weeks and months following Viking River, plaintiffs’ lawyers and several courts seized on Justice Sotomayor’s concurring opinion in Viking River and held that the plaintiff whose individual PAGA claim is compelled to arbitration does not lose standing thereafter to continue to pursue representative penalties in court. See, e.g., Piplack v. In-N-Out Burgers (discussed here). And, on July 20, 2022, the California Supreme Court granted review in Adolph v. Uber Technologies, Inc., a case that will decide whether an aggrieved employee who has been compelled to arbitrate claims under the PAGA that are premised on Labor Code violations actually sustained by the aggrieved employee maintains statutory standing to pursue PAGA claims arising out of events involving other employees in court or another forum.
Following the California Supreme Court’s grant of review in Adolph, dozens of trial courts began staying motions to compel arbitration and/or requests to dismiss non-individual PAGA claims pending Adolph’s outcome. And, despite all briefing having been submitted for some time, it looked like a decision in Adolph was not going to be coming any time soon, at least until last week.
On April 19, 2023, the California Supreme Court set oral argument in Adolph for May 10, 2023. Thereafter, the California Supreme Court must issue its decision within 90 days of oral argument. Accordingly, employers will know the outcome of Adolph and the fate of PAGA representative action waivers by August 7, 2023—just a few months after Viking River’s one year anniversary.
Stay tuned for updates.