Duran v. EmployBridge Holding Co., 92 Cal. App. 5th 59 (2023)

In 2014, the California Supreme Court determined that Private Attorneys General Act (“PAGA”) claims are immune from arbitration in Iskanian v. CLS Transp. Los Angeles, LLC – which, unsurprisingly, led to an avalanche of PAGA claims being filed as plaintiffs’ lawyers scrambled to make their cases arbitration-proof (at least as to those pesky PAGA claims).  In response to Iskanian, some employers immediately and dutifully revised their arbitration agreements to exclude PAGA claims.  Then in June 2022, the United States Supreme Court in Viking River Cruises v. Moriana held that the Federal Arbitration Act preempts Iskanian’s holding that PAGA actions could not be divided into individual and representative claims brought on behalf of other allegedly “aggrieved employees.”  Now in this opinion, the Court of Appeal has decided that a law-abiding employer that relied to its detriment upon Iskanian and included a broad PAGA carve out in its arbitration agreement could not compel to arbitration an employee’s individual PAGA claim – even though that claim would have otherwise been arbitrable but for the Iskanian-compliant carve out.