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The California Supreme Court Issues Ruling on PAGA Standing

by Melissa Whitehead | | July 17, 2023

The California Supreme Court has now issued its long-awaited ruling in Adolph v. Uber Technologies, Inc. (Read the full opinion here.) We previously posted about the significance of this anticipated ruling here and here. Adolph is the California Supreme Court’s response to the United States Supreme Court’s ruling in Viking River Cruises v. Moriana (which we wrote about here). In Viking, the Court ruled that if an employee’s individual PAGA claims are pursued in arbitration, then the employee will likely lack standing to pursue the representative PAGA claims. At the time, Justice Sotomayor noted in her concurrence, “Of course, if this Court’s understanding of state law is wrong, California courts … will have the last word.” Since then, employers have waited for that final word and it now seems we have it.

In Adolph, California’s highest court disagreed with Viking and held that where an employee files a PAGA action comprised of individual and representative claims, an order compelling the individual claims to arbitration will not strip that employee of standing to pursue the representative claims in court. In other words, employers may still enforce agreements requiring employees to arbitrate individual claims, but doing so will not necessarily keep them out of the courtroom if their complaints include PAGA claims.

Employers with PAGA waivers in their arbitration agreements likely will need to revise those agreements (again!). It is also important for employers to work with experienced employment law counsel to draft enforceable arbitration agreements.

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