This week, California’s Supreme Court heard oral argument in Adolph v. Uber Technologies Inc., No. S274671, a case in which the Court is poised to decide whether it will, in effect, overrule part of a recent U.S. Supreme Court decision limiting workers’ rights under California’s Private Attorneys General Act (PAGA). PAGA permits a worker to sue an employer on behalf of themselves and all other “aggrieved employees” for alleged violations of state labor law protections such as meal and rest periods, minimum wage and overtime.
The U.S. Supreme Court recently ruled in Viking River Cruises Inc. v. Moriana, No. 20-1573, that PAGA violates the rights of employers under the Federal Arbitration Act (FAA) to the extent PAGA permits an employee who is contractually required to arbitrate employment-related disputes to bypass arbitration and pursue their claims against their employer. As for the claims of other employees, the Supreme Court majority concluded that such claims would have to be dismissed because the employee sent to arbitration would no longer have standing to pursue that litigation.
Notably, Supreme Court Justice Sonya Sotomayor wrote a separate concurring opinion, stating that standing under PAGA was a matter of state (not federal) law, and “California courts, in an appropriate case, will have the last word.” The Adolph case appears to be that case.
The High Court’s Viking River decision is now before the California Supreme Court via the Adolph case.The state’s highest court is expected to decide whether PAGA is still available to plaintiffs subject to arbitration after the arbitration is decided, notwithstanding the Viking River decision.
In rendering its decision in Adolph, the California Supreme Court must consider the state court precedent—that PAGA is available as a remedy to any worker alleging state labor law claims—against the U.S. Supreme Court’s Viking River opinion limiting access to PAGA by excluding workers subject to a federally protected arbitration requirement for disputes between the individual and their employer.
No matter what the California Supreme Court decides, it is poised to make history. Observers of the oral argument in Adolph report that we should expect the state court to narrow the application of the U.S. Supreme Court’s Viking River decision, while others believe the High Court’s 8-1 majority opinion will be honored and those workers subject to arbitration will not have standing to bring a PAGA case at any time because it would violate the Federal Arbitration Act.
The Adolph case was argued on May 9 and a decision should issue within 90 days.
Editorial Note: Manatt filed an amicus brief for the Civil Justice Association of California in Adolph supporting the decision of the U.S. Supreme Court that after an employee arbitrates individual claims, the remaining non-individual claims must be dismissed for lack of standing. Manatt did not address the rights of other similarly-situated workers not subject to arbitration to bring a PAGA action. Indeed, we are as interested in the outcome of Adolph as you are.
To see Manatt’s prior commentary on this case, click here, here and here.