Litigation

Cal. Litig. 2023, Volume 35, Issue 3

THE SUPREME COURT’S FIVE ARBITRATION DECISIONS

Written by Paul Dubow*

Over the past few decades, the United States Supreme Court has issued many arbitration decisions, but rarely has there been more than two in a single session. This year, the Court outdid itself when it rendered five decisions that concerned arbitration.

The decision that substantially affected California jurisprudence, and perhaps the most controversial, was Viking River Cruises, Inc. v. Moriana (2022) __ U.S.__ [142 S.Ct. 1906], which determined the arbitrability of representative and individual claims filed pursuant to the Private Attorneys General Act (PAGA, Lab. Code, § 2699). PAGA authorizes any "aggrieved employee" to initiate an action against a former employer "on behalf of himself or herself and other current or former employees" to obtain civil penalties that previously could have been recovered only by the State in an enforcement action by the Labor Workforce Development Agency (LWDA). An employee who files such a representative claim under PAGA is entitled to 25% of the recovery.

Many California employers require their employees to sign arbitration agreements and often these agreements require the employee to waive the right to file class or representative claims. Consequently, employers regularly defend PAGA lawsuits by filing a motion to compel arbitration of the employee’s individual claim and a motion to dismiss the representative claim.

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