PAGA’s Exclusion from Arbitration Agreements Ending?

Holden Law Group CA employment law

Holden Law Group CA employment law

It’s the holidays! And, the United States Supreme Court may be giving California employers a gift that they have long deserved. It will not arrive by Christmas, but the possibility that it will come in 2022 should bring a little extra holiday cheer.

Yesterday the Supreme Court agreed to review the Moriana v. Viking River Cruises, Inc. case. Moriana was employed by Viking River Cruises and sued the company seeking the recovery of penalties under California’s Private Attorney General Act (PAGA). Moriana had signed an arbitration agreement, but the trial and appellate courts both denied the employer’s attempt to compel the arbitration. The courts ruled that because PAGA claims are essentially claims of the State of California and merely pursued by individual employees, PAGA claims cannot be compelled to arbitration. These rulings are consistent with California’s historic aversion to arbitration as a method of resolving employment disputes. They are also contrary to the respect and favoritism for arbitration recognized by the Supreme Court under federal law. On more than one occasion the Supreme Court has overruled California’s attempts to limit the use of arbitration.

Will they do it again? We can only hope, and in the meantime, enjoy the holidays!