California Supreme Court permits “representative” claims in court under PAGA even though “individual” claims under PAGA must be arbitrated c

Last year, the Supreme Court ruled, in Viking River Cruises, that a mandatory pre-dispute arbitration agreement barred the plaintiff from pursuing claims under California’s statue called “PAGA” (Private Attorneys General Act). PAGA is a statutory scheme that lets individuals pursue claims, often compared to class-/collective-actions, for labor code violations and recover remedies including penalties not only on their own behalf but as representatives of others and even as “private attorneys general” acting on behalf of the State of California. In a series of legal and legislative maneuvers, the California courts and legislatures had interpreted and revised PAGA to try to permit such claims to be filed in court, despite mandatory pre-dispute arbitration agreements. In response, in Viking River Cruises last year, the Supreme Court held, no, such agreements mandate arbitration, are enforceable and therefore block PAGA claims in court.

In this case, Adolph v. Uber Technologies, Inc., the California Supreme Court has seemingly turned Viking River Cruises on its head. The California Supreme Court recognized that Viking River Cruises blocks plaintiffs from asserting PAGA claims in court and requires them to pursue them in arbitration, but the California Supreme Court held it does so only for claims asserted on the plaintiff’s own behalf.

In short, if Adolph stands, states could arguably enact legislation like PAGA to permit individuals to pursue claims for their own benefit in arbitration and in addition pursue the same claims in court as representatives of their fellow workers.

The California Supreme Court noted that California courts can, in their discretion, stay the court proceeding to see if the plaintiff wins in arbitraiton: If so, his representative claim in court could then proceed, and if not, that claim would need to be dismissed.