Supreme Court holds that mandatory pre-dispute arbitration agreements mandate arbitration and can block class-collective actions despite California law to contrary
Since at least 2019, it has been clear under Supreme Court precedent that mandatory pre-dispute arbitration agreements entered into with employees are binding and enforceable, even if it means the employee cannot bring a class- or collective-action as part of her claims. California attempted to work around that caselaw with an innovative state law (“PAGA” ) unlike any other in any state, which purported to say the state itself had the right to bring class- and collective-actions and that an individual can bring the state’s claim as, what PAGA calls, a Private Attorney General. PAGA then added that individuals could not waive that right (in for example an arbitration agreement). In Viking River Cruises, Inc. v. Moriana, the Supreme Court ruled that, no, such an individual, if she has signed an arbitration agreement, even a mandatory pre-dispute arbitration agreement, must submit her own claims to arbitration and, once she has done so, has no mechanism under PAGA for attempting to bring a class-collective action in court.
In so ruling, the Supreme Court held that federal law preempts Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014).
The Supreme Court’s opinion’s wording has led at least some commentators to speculate that the California legislature may attempt to re-draft PAGA in response to the Supreme Court’s Viking River Cruises decision.