fate of PAGA’s inclusion in class action waivers at the hands of SCOTUS | Fox Rothschild LLP

I’m generally not a policy follower and often think in terms of concepts and not cases. However, I have to say that listening to the argument of the United States Supreme Court on the ongoing Viking River Cruises case was fascinating. If you have planned a road trip or a weekend walk, I highly recommend that you listen to it; the Podcast is about 80 minutes.

If you’ve been hiding under a rock of labor law, the question in this case is whether a class action waiver in an arbitration agreement can also include a waiver of PAGA claims. According to the law in force (Iskanian vs. CLS), the California Supreme Court essentially ruled that class action waivers cannot include class claims under PAGA because those claims belong to the state. In fact, a group of esteemed Fox Rothschild colleagues briefed and debated the Iskanian case years ago, and were on the right side of this argument (namely, that under US Supreme Court precedent California cannot undermine federal arbitration law by excluding PAGA from class action waivers). But alas, the Supreme Court of California decided otherwise.

In the years since Iskanian, PAGA claims have exploded at the rate of about 17 cases filed per day. But this case challenges that legal landscape, and the time may be right given the new conservative (and hopefully pro-employer) majority on the U.S. Supreme Court.

If litigation is any indicator, this trend of PAGA filings could be coming to an end for employers wise enough to have well-drafted arbitration agreements with class-action waivers in hand. Another reason to come back our blog posts on arbitration agreements.

A decision is expected by July 2022.

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