In a recent ruling, the California Court of Appeals in Rodriguez v. Packers Sanitation Service, Ltd. allowed an employee who had signed a mandatory employment agreement to avoid having to arbitrate his PAGA claim.
The Court’s reasoning was that, by pleading his PAGA claim as a representative claim only – meaning, the employee’s lawsuit sought no PAGA penalties for himself but only for other “aggrieved employees” as a representative of the State of California – the employee’s lawsuit no longer contained an arbitrable claim. The Court based its decision on the U.S. Supreme Court’s decision in Viking River Cruises, which held that only an employee’s individual PAGA claim could be forced into arbitration, as well as the California’s Supreme Court’s subsequent, clarifying decision, Adolph v. Uber. We previously blogged about the Adolph and Viking River Cruises decisions here.
This creates a clear conflict with the California Court of Appeal decision in Leeper v. Shipt, Inc. The Court in Leeper held that the employee’s entire PAGA claim could be forced into arbitration because, in the Court’s view, all PAGA claims necessarily include a claim for individual penalties. Therefore, if an employee who has signed a mandatory arbitration agreement brings a PAGA claim, then the PAGA claim can be forced into arbitration no matter how creatively the employee and his lawyers may have tried to plead their PAGA lawsuit to try to avoid arbitration.
With a clear split of authority developing in the lower courts, the California Supreme Court will likely get involved to resolve the dispute and answer the question once-and-for-all.
You can read the Court’s opinion in Rodriguez here.
You can read the Court’s opinion in Leeper here.
