PAGA Claims Survive In Court

Claims under the Private Attorneys General Act, Labor Code § 2698 et seq. (PAGA), survive as representative action in Los Angeles Superior Court, despite U-Haul's petition to compel arbitration. As a condition of employment with U-Haul, the plaintiffs had signed an agreement to arbitrate governed by the Federal Arbitration Act. Nevertheless, they brought suit in LASC alleging a number of violations under the California Labor Code. In the meantime, the California Supreme Court issued an opinion in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal. 4th 348. In Iskanian, the California Supreme Court made clear that “claims brought pursuant to PAGA are not arbitrable in any manner whatsoever, as it is against public policy. Following the outcome of Iskanian, the plaintiffs successfully amended their complaint to remove all causes of action, except for those under PAGA and they were allowed to proceed in court as a representative action. In Perez v. U-Haul Co. Of California, the Second Appellate District, Division Seven of the California Court of Appeal expanded the reach of Iskanian to foreclose arbitration of whether an employee an "aggrieved employee" as a preliminary issue to determine standing under PAGA. To read the opinion, click here.