In Viking River Cruises, US Supreme Court Sides With Employers: Individual PAGA Claims Are Arbitrable – For Now

In a victory for California employers, the U.S. Supreme Court held in Viking River Cruises, Inc. v. Moriana that the Federal Arbitration Act (FAA) requires enforcement of arbitration agreements that waive an worker’s proper to deliver a Non-public Attorneys Basic Act (PAGA) declare on a consultant foundation – requiring such claims be introduced on a person foundation in arbitration. The Court additional held that “PAGA provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate [individual arbitration] proceeding.” In consequence, an worker “lacks statutory standing to maintain her non-individual claims in court, and the correct course [i]s to dismiss her remaining claims.”

Details of the Case

Angie Moriana, a former gross sales consultant for Viking River Cruises, give up her job and filed a PAGA grievance in California state court docket. She claimed she had not acquired her closing paycheck inside 72 hours of her separation (what the Court characterised as her particular person declare) in addition to a big selection of different Labor Code violations different Viking staff allegedly suffered (i.e., non-individual claims).

Viking moved to compel arbitration of Moriana’s particular person declare and to dismiss her non-individual claims. The corporate argued that since Moriana had signed a compulsory arbitration settlement when she was employed, she was required to arbitrate her particular person claims. The necessary arbitration settlement additionally included a Class and Consultant Motion Waiver, pursuant to which Moriana had agreed she “could not bring any dispute as a class, collective, or representative action under PAGA.”

The trial court docket, counting on Iskanian v. CLS Transportation Los Angeles, denied Viking’s movement to compel, and a California court docket of attraction affirmed. In doing so the appellate court docket held that express waivers of PAGA standing are opposite to state coverage.

U.S. Supreme Court Determination

The Supreme Court granted certiorari and held the FAA preempts the California Supreme Court’s Iskanian holding.

First, the Supreme Court held that Viking may compel arbitration of Moriana’s particular person PAGA declare. The Court reasoned that as a result of Moriana had willingly consented to arbitrate her particular person claims, the FAA required arbitration of her particular person claims. Second, as to the non-individual claims, the Court reasoned that — based mostly on present PAGA standing necessities — a plaintiff couldn’t preserve a non-individual PAGA declare until the plaintiff additionally maintained a person PAGA declare in that motion. As a result of Moriana had agreed to arbitrate her particular person PAGA declare, she lacked standing to proceed in court docket, and the Supreme Court ordered her remaining non-individual PAGA claims dismissed.

Sensible Implications

This determination could dramatically change how events litigate PAGA lawsuits in California. Employers who wouldn’t have arbitration packages that embody class and consultant motion waivers could want to implement such packages. Employers who do have arbitration packages could think about confirming they embody consultant motion waivers that adjust to Viking. In addition, California employers presently litigating PAGA claims in court docket could possibly compel arbitration based mostly on beforehand signed arbitration agreements that comprise consultant motion waivers.

In her concurrence, Justice Sotomayor commented that in reaching its conclusion, the Court relied on the truth that California presently has “no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding.” The plaintiffs’ bar could depend on that time if it appeals to the California legislature for a repair.

Particular because of Summer season Associates Kyle Elkins and Sierra Horton for his or her worthwhile contributions to this GT Alert. Not admitted to the observe of regulation.

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