Enforceability of PAGA Waivers in Arbitration Agreements – The Battle Continues
The battle over whether employees may waive the right to pursue claims under California’s Private Attorneys General Act (PAGA) in arbitration continues. The Supreme Court of the United States recently requested a response from ex-Bridgestone Retail Operations LLC employees to Bridgestone’s January 5, 2015 petition for a writ of certiorari challenging the California Supreme Court’s refusal to enforce an arbitration agreement waiving PAGA claims.
Readers likely recall the Supreme Court previously denied a petition filed by CLS Transportation Los Angeles, following a significant decision by the California Supreme Court in the case of Iskanian v. CLS Transportation Los Angeles LLC (2014) 59 Cal.4th 348, in which the California Supreme Court held that because PAGA claims are brought on behalf of the state, employees cannot waive the right to bring such claims in any forum as a matter of public policy. Id. at 360. Following the California Supreme Court’s decision, CLS Transportation filed a petition with the Supreme Court of the United States, arguing that since PAGA claims are similar to class action claims, California’s attempt to prohibit waivers of PAGA claims is preempted by the Federal Arbitration Act (FAA) under AT&T Mobility LLC v. Concepcion (2011) 131 S.Ct. 1740. The Supreme Court decided not to take up the issue.
Unlike CLS Transportation’s petition, Bridgestone’s petition focuses not only on the similarities between PAGA and class action claims, but also on the fact that the FAA applies to all claims arising out of an employment relationship, and does not contain any exception for claims deemed to be brought on behalf of the state. While it remains to be seen whether the Supreme Court will grant review of Bridgestone’s petition, the request for a response from the plaintiff-respondents is encouraging. Stay tuned for further updates.