Calif. Court Clarifies PAGA Arbitration Rules

The California Private Attorneys General Act (PAGA) allows employees within the state to sue employers for labor code violations on behalf of themselves and other employees. A significant case, Christina Leeper v. Shipt, Inc., is expected to go to the California Supreme Court. The issue is whether a plaintiff can avoid arbitration by making only representative PAGA claims, not individual ones. Initially, the trial court allowed this, which some legal experts say undermines the U.S. Supreme Court’s 2022 decision in Viking River Cruises v. Moriana which held that individual PAGA claims could be sent to arbitration under the Federal Arbitration Act. On Dec. 30, a California Court of Appeal reversed the trial court’s decision, ordering individual PAGA claims to arbitration and pausing the representative PAGA action during arbitration. The appeals court highlighted that every representative PAGA action includes an individual claim that can be arbitrated. This decision is important as it stops plaintiffs from avoiding arbitration through strategic pleading. The plaintiff is expected to seek review by the California Supreme Court.