PAGA Plaintiffs Can Continue Representative Claims in Court Despite Arbitration of Individual Claims

The Private Attorneys General Act (PAGA) grants aggrieved employees in California the right to bring lawsuits against employers and former employers and obtain civil penalties on their behalf or on behalf of other employees and the State of California for Labor Code violations. This law allows employees to act as “private attorneys general.” It is vital for employees to understand the standing of plaintiffs under PAGA. One crucial thing you need to understand is whether PAGA plaintiffs still have the right to proceed with representative claims in court even after individual claims are required to be resolved through arbitration. So, do PAGA plaintiffs maintain the right to proceed with representative claims in court even after individual claims have been compelled to arbitration? Yes, aggrieved employees maintain the right to pursue representative claims in court even after their individual claims have been compelled to arbitration. This answer was given by the state’s Supreme Court last year in a PAGA claim against Uber Techs., Inc.

About the Case

For purposes of this article, the PAGA plaintiff in this case will be referred to as E.A.

The PAGA plaintiff in this case, E.A., worked as a driver for Uber. One of the conditions of E.A.’s employment was that he had to accept an agreement that included an arbitration provision. An arbitration clause in an employment agreement stipulates that any disagreement that arises between an employee and their employer will be resolved through arbitration and not in court. Signing an agreement containing an arbitration provision means an employee gives up their right to seek a trial before a jury. Instead of taking your case to court, you must engage a third party called an arbitrator, whose job is to listen to both sides of the story and make a binding decision. Upon signing the agreement, not only was E.A. required to arbitrate, on an individual basis, work-related claims that might arise, but the agreement also included a provision that purported to waive his ability to bring PAGA claims on behalf of other employers.

E.A. sued Uber, alleging that he and some of his colleagues had been misclassified as independent contractors instead of employees. The company filed a motion to compel arbitration for E.A.’s individual claims, and the trial court approved the motion. The court also dismissed the class action claims that the employee had filed. The employee adjusted his complaint to focus only on a PAGA claim for civil penalties and sought a preliminary injunction to prevent arbitration from proceeding. The court granted the injunction, resulting in Uber filing an appeal. Even after an appellate court agreed with the trial court’s decision, the company tried appealing again, resulting in the case proceeding to the California Supreme Court.

Ultimately, the California Supreme Court concluded that PAGA plaintiffs maintain their right to pursue representative claims even if their individual claims are required to be resolved through arbitration. According to the court, taking this right away from PAGA plaintiffs would be inconsistent with the Act’s purpose.

Contact a California Employment Lawyer

Contact a California employment lawyer if you have questions or need help with an employment law-related matter.