U.S. Supreme Court Rules Individual PAGA Claims May Be Compelled to Arbitration in Favorable Decision for California Employers
Last week, the U.S. Supreme Court issued a decision in Viking River Cruises, Inc. v. Moriana, ruling that California authority prohibiting mandatory arbitration of claims brought under the Private Attorneys General Act (PAGA) is preempted by the Federal Arbitration Act (FAA) and that such claims can be compelled to arbitration – a welcome victory for California employers.
Background
California’s Private Attorneys General Act (PAGA) authorizes employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Previously, claims brought under PAGA could dodge arbitration due to the California Supreme Court’s 2014 ruling in Iskanian v. CLS Transp. Los Angeles LLC, which found that PAGA claims were not subject to representative action waivers in arbitration agreements.