The Ninth Circuit issued a surprising decision (disagreeing with the view of many California district courts), holding that the California Supreme Court’s Iskanian v CLS Transportation decision is not preempted by the Federal Arbitration Act (FAA). In Iskanian, the California Supreme Court held that while class action waiver provisions in arbitration agreements are enforceable, a PAGA representative action waiver is not enforceable because employees have an unwaivable statutory right to bring a representative PAGA claim against their employers. The California Supreme Court reasoned that a PAGA plaintiff essentially stands in the shoes of the state in bringing the claim and acts in large part to collect penalties on behalf of the state. In this way, the intent of the statute would be frustrated if employees could be required to waive the right to pursue a representative PAGA action. The Court further held that the FAA does not require that California enforce a PAGA waiver in an arbitration agreement.
Home > State Law Articles > California > Human Resources (CA) > Ninth Circuit Upholds California Rule on Unenforceability of PAGA Representative Action Waivers