The recent Adolph v. Uber Technologies decision by the California Supreme Court has rejuvenated a ballot initiative that some lawyers view as the prime opportunity to overturn the state's Private Attorneys General Act.
Employers often seek to force their employees to sign arbitration agreements - to ensure that IF any legal disputes arise between them and their employees, those claims would be resolved and decided outside of court. This means an arbitrator (usually a retired judge) will determine the fate of that former employees' case - not a jury of the harmed employees' peers. Because an arbitrator may not award as much as a jury, employers often press to have any claims decided through arbitration.
PAGA claims, however, concern a class of aggrieved employees. Because arbitration is not made for or suitable for hundreds or thousands of employees' claims, it has been hotly contested and fought against for decades. In fact, almost ten years ago, the California Supreme Court determined that PAGA claims were not covered by an employee's arbitration agreement. Meaning all PAGA claims (generally those relating to an employers' violation of the California wage/hour Labor Codes), must be brought before the superior court, not an arbitrator. Now, after compelling arbitration, trial courts appear to have discretion to stay the non-individual claims pending the outcome of the arbitration.
Considering the Adolph decision, employers should now evaluate the pros and cons of addressing individual PAGA claims through arbitration while handling the collective PAGA claims in court. Moreover, the Court hinted that employers aiming to further restrict PAGA's eligibility criteria to counter purported misuses might find it more effective to approach the state legislature, which has the authority to modify the statute to curtail PAGA enforcement if deemed necessary.