Private Attorneys General Act Review – 2023 - Report - Page 19
part the trial court’s ruling. The defendant argued the recent decision of the United
States Supreme Court in Viking River Cruises, Inc. v. Moriana, et al., 142 S.Ct. 1906
(2022), rendered while defendant's appeal was pending before this court, requires the
plaintiffs' individual PAGA claims to be arbitrated and all remaining representative
claims dismissed for lack of standing. Id. at 1284. The plaintiffs contended the
agreement did not require arbitration of individual PAGA claims, and further, that plaintiff
Sherrod was not bound by the arbitration agreement because he entered it before
reaching the age of majority and disaffirmed it after reaching that age, and that plaintiffs
have standing to pursue representative PAGA claims in court even if their individual
claims are sent to arbitration. Id. at 1285. The Court of Appeal considered the California
Supreme Court’s decision in Kim v. Reins International California, Inc., 9 Cal.5th 73
(2020), in its review, which provided binding interpretation of the relevant portions of
PAGA controlling standing. Id. at 1286. The Court of Appeal interpreted Kim as
recognizing two standing requirements under PAGA, neither of which is affected in any
way by moving the individual component of a PAGA claim to arbitration. Id. The Court of
Appeal thereby determined that it must follow Kim and hold that the plaintiffs retain
standing to pursue representative PAGA claims in court even if their individual PAGA
claims are compelled to arbitration. Thus, the Court of Appeal stated that it must “follow
Kim and hold that the plaintiffs retain standing to pursue representative PAGA claims in
court even if their individual PAGA claims are compelled to arbitration." Id. at 1293.
Accordingly, the Court of Appeal vacated and remanded the action to the trial court to
render factual findings in the first instance on issues surrounding plaintiff Sherrod's
alleged disaffirmance of the arbitration agreement upon reaching the age of majority, to
compel plaintiff Piplack's individual PAGA claim to arbitration, and to deny the
defendant's motion to compel arbitration as to the plaintiffs'
representative PAGA claims. Id.
In Galarsa, et al. v. Dolgen California, LLC, 2023 Cal. App. Unpub. LEXIS 701 (Cal.
App. 5th Dist. Feb. 2, 2023), the plaintiff filed a state court class action seeking to
recover civil penalties under the Private Attorneys General Act of 2004 (PAGA) for
various California Labor Code violations. The defendant filed a motion to compel
arbitration of the plaintiff’s claims, and the trial court denied the motion. On the
defendant’s appeal, the California Court of Appeal affirmed the trial court's order. That
affirmance was vacated by the United States Supreme Court when it granted the
defendant’s petition for writ of certiorari and remanded the case for further consideration
in light of Viking River Cruises, Inc. v. Moriana, et al., 142 S. Ct. 1906 (2022).
Subsequently, the Court of Appeal concluded that Viking River and the Federal
Arbitration Act do not invalidate the rule of California law that a provision in an
arbitration agreement purporting to waive an employee's right to pursue representative
actions is not enforceable as to representative claims pursued under PAGA. Id. at *1.
The Court of Appeal also determined that the severability clause in the arbitration
agreement would allow for the unenforceable waiver provision to be stricken from the
arbitration agreement. The Court of Appeal ruled that the plaintiff’s individual PAGA
claims must be sent to arbitration in accordance with the principles established
by Viking River and the FAA, however, the non-individual PAGA claims seeking to
recover civil penalties for Labor Code violations may be pursued by the plaintiff in court.
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PAGA Litigation Review – 2023
