July 18, 2023
Decided July 17, 2023
Adolph v. Uber Techs., S274671
The California Supreme Court held yesterday that an order requiring an employee to arbitrate PAGA claims brought on his or her own behalf does not, on its own, deprive the employee of standing to litigate non-individual PAGA claims on behalf of other employees.
Background: Erik Adolph, a driver who used Uber’s “Eats” platform, alleged that Uber misclassified drivers as independent contractors rather than employees. He filed a claim under the Private Attorneys General Act of 2004, California Labor Code section 2698 et seq. (“PAGA”), seeking civil penalties on behalf of himself and other drivers.
Uber moved to compel arbitration of Adolph’s PAGA claim on the ground that the parties signed an agreement requiring Adolph to individually arbitrate his claims against Uber. The trial court and Court of Appeal rejected that argument based on the California Supreme Court’s decision in Iskanian v. CLS Transp. Los Angeles, LLC (2014) 58 Cal.4th 380, which held that PAGA claims are not subject to arbitration. But while Uber’s petition for review was pending before the California Supreme Court, the U.S. Supreme Court issued its decision in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906, which held that the Federal Arbitration Act preempted Iskanian in relevant part and that individual PAGA claims could be compelled to arbitration.
Viking River also concluded, based on its analysis of California law, that a plaintiff lacks statutory standing to litigate his non-individual PAGA claims once his individual PAGA claim is compelled to arbitration. The California Supreme Court granted review to resolve this issue of state law and heard argument in May 2023.
Issue: Does an aggrieved employee who is compelled to arbitrate an individual PAGA claim lose statutory standing to litigate non-individual PAGA claims on behalf of other employees?
No. “Where a plaintiff has brought a PAGA action comprising individual and non-individual claims,” an order “compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate [non-individual PAGA] claims on behalf of other employees.”
“[W]here a plaintiff has filed a PAGA action comprised of individual and non-individual claims, an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate non-individual claims in court.”
Justice Liu, writing for the Court
Gibson Dunn Represented Defendant and Appellant: Uber Technologies, Inc.
What It Means:
The Court’s opinion is available here.
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