3 minute read | July.20.2023
The California Supreme Court issued its long-awaited ruling in Adolph v. Uber Technologies, Inc. on July 17, 2023, holding that an employee can pursue a non-individual representative action under the Private Attorneys General Act (PAGA) on behalf of other employees even after the employee’s individual claim has been compelled to arbitration.
This ruling breaks from the U.S. Supreme Court’s ruling in Viking River Cruises, Inc. v. Moriana and clears the way for California employees to pursue PAGA actions on behalf of other employees in court even where they are compelled to arbitrate their individual claims.
The issue before the California Supreme Court in Adolph was whether an employee maintains standing under PAGA to pursue a representative PAGA claim “arising out of events involving other employees” where the employee had been compelled to arbitrate his individual PAGA claim. (An individual claim is the portion of a PAGA claim “premised on Labor Code violations actually sustained by” the employee.)
The U.S. Supreme Court held in Viking River last summer that:
The decision was considered a win for employers. Indeed, before Viking River, the California Supreme Court’s 2014 ruling in Iskanian v. CLS Transportation Los Angeles, LLC, prohibited employers from enforcing pre-dispute PAGA waivers in arbitration agreements. In Viking River, however, the U.S. Supreme Court left the California Supreme Court with the final word on interpreting PAGA standing to bring the non-individual, representative claims in court under state law.
In Adolph, Uber argued that since Viking River overruled Iskanian and permitted the court to compel arbitration of the plaintiff’s individual claim, the plaintiff’s remaining representative PAGA claim should be dismissed for lack of standing.
The plaintiff, however, countered that the only requirements for PAGA standing under California law, as stated in Kim v. Reins International California, Inc., is that the plaintiff be an “aggrieved employee.” The plaintiff argued that an “aggrieved employee” has standing to pursue a PAGA claim in court on behalf of other employees, regardless of whether the individual claim is compelled to arbitration.
Siding with the plaintiff, the Court concluded, “a plaintiff who files a PAGA action with individual and non-individual claims does not lose standing to litigate the non-individual claims in court simply because the individual claims have been ordered to arbitration.” The Court’s decision effectively nullifies the portion of Viking River holding that a plaintiff loses standing to bring a representative action in court after being compelled to arbitrate an individual claim.
Nonetheless, the ruling offered some glimmers of hope for employers:
In light of the Court’s decision, here are some actions employers can take:
Contact the Orrick employment team to learn more.