{"id":5855,"date":"2022-06-22T11:55:10","date_gmt":"2022-06-22T15:55:10","guid":{"rendered":"https:\/\/employerdefensereport.com\/?p=5855"},"modified":"2026-03-20T11:51:38","modified_gmt":"2026-03-20T15:51:38","slug":"us-supreme-court-splits-the-baby-on-arbitrability-of-paga-claims","status":"publish","type":"post","link":"https:\/\/www.connmaciel.com\/employer-defense-report\/us-supreme-court-splits-the-baby-on-arbitrability-of-paga-claims\/","title":{"rendered":"US Supreme Court Splits the Baby on Arbitrability of PAGA Claims"},"content":{"rendered":"<p>By <a href=\"http:\/\/www.connmaciel.com\/megan-s-shaked\" target=\"_blank\" rel=\"noopener\">Megan S. Shaked<\/a> and <a href=\"http:\/\/www.connmaciel.com\/samuel-s-rose\" target=\"_blank\" rel=\"noopener\">Samuel S. Rose<\/a><\/p>\n<p>In the latest chapter in the enforceability of employment arbitration agreements in California, the United States Supreme Court in <a href=\"https:\/\/www.supremecourt.gov\/opinions\/21pdf\/20-1573_8p6h.pdf\"><em>Viking River Cruises, Inc. v. Moriana<\/em><\/a> (Viking River) weighed in on whether the Federal Arbitration Act (FAA) preempts California Supreme Court precedent set in <em>Iskanian v. CLS Transportation<\/em> (2014) preventing the enforceability of California Private Attorneys General Act (PAGA) waivers. <a href=\"http:\/\/employerdefensereport.connmaciel.stagingarea.org\/wp-content\/uploads\/sites\/2\/2022\/06\/shutterstock_1917179498.png\"><img loading=\"lazy\" decoding=\"async\" title=\"Shutterstock 1917179498 300x100\" class=\" wp-image-5861 alignright\" src=\"http:\/\/employerdefensereport.connmaciel.stagingarea.org\/wp-content\/uploads\/sites\/2\/2022\/06\/shutterstock_1917179498-300x100.png\" alt=\"Shutterstock 1917179498 300x100\" width=\"500\" height=\"167\" srcset=\"https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2022\/06\/shutterstock_1917179498-300x100.png 300w, https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2022\/06\/shutterstock_1917179498-1024x342.png 1024w, https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2022\/06\/shutterstock_1917179498-768x257.png 768w, https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2022\/06\/shutterstock_1917179498-1536x513.png 1536w, https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2022\/06\/shutterstock_1917179498-2048x684.png 2048w, https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2022\/06\/shutterstock_1917179498-1680x561.png 1680w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/a><\/p>\n<p>In <em>Iskanian<\/em>, the California Supreme Court held, in part, that the FAA does not preempt state law prohibiting waiver of PAGA representative actions in employment agreements.\u00a0 Specifically, the California Supreme Court determined that \u201can arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy.\u201d<\/p>\n<p style=\"text-align: left;\">Now with the <em>Viking <\/em>decision, rather than treating a PAGA waiver as simply unenforceable in its entirety, the US Supreme Court, relying on a severability clause in the arbitration agreement at issue, decided that <!--more-->the <em>individual<\/em> PAGA claims could be treated differently from the <em>representative<\/em> PAGA claims and that the individual PAGA claims could be compelled to arbitration.\u00a0 Specifically, the US Supreme Court held that the FAA \u201cpreempts the rule of <em>Iskanian<\/em> insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.\u201d<\/p>\n<p><strong>The Underlying Dispute in <em>Viking<\/em><\/strong><\/p>\n<p>In <em>Viking<\/em>, the employee filed, among other claims, a PAGA action against her former employer alleging various California Labor Code violations.\u00a0 The former employee, Moriana, had signed an employment contract with her employer, Viking, that contained a mandatory arbitration agreement.\u00a0 The arbitration agreement contained a Class Action Waiver providing that the parties could not bring any dispute as a class, collective, or representative action under PAGA.\u00a0 The arbitration agreement also contained a severability clause specifying that if the waiver was found invalid, such a dispute would presumptively be litigated in court and that any portion of the waiver that remained valid would be enforced in arbitration.<\/p>\n<p>When Viking moved to compel arbitration of Moriana\u2019s individual PAGA claim and dismiss her remaining PAGA claims (the <em>representative<\/em> PAGA claims), the California trial court denied the motion and the Court of Appeal affirmed the decision based on California\u2019s precedent under <em>Iskanian. <\/em><\/p>\n<p><strong>United States Supreme Court Held the Arbitration Agreement to be Enforceable in Part<\/strong><\/p>\n<p>The United States Supreme Court reversed the judgment of the California Court of Appeal, instead deciding that Viking was entitled to compel arbitration of Moriana\u2019s individual PAGA claim.\u00a0 The Court reasoned that although the arbitration agreement was invalid to the extent it included a \u201cwholesale waiver\u201d of all PAGA claims (consistent with <em>Iskanian<\/em>), the severability clause providing that any \u201c\u2018portion\u2019 of the waiver that remained valid\u201d must still be enforced in arbitration.\u00a0 The Court further reasoned that the rule of <em>Iskanian<\/em> that PAGA actions cannot be divided into individual and non-individual PAGA claims is inconsistent with the purpose of the FAA and that forcing parties into a judicial forum is inconsistent with parties ability to agree to arbitrate their own claims.<\/p>\n<p>The United States Supreme Court took the analysis one step further, finding that because PAGA \u201cprovides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding,\u201d Moriana no longer had standing to continue to maintain her non-individual claims in court and her remaining claims should be dismissed.<\/p>\n<p><strong>Takeaways for Employers<\/strong><\/p>\n<p>It is time once again for employers to review their arbitration agreements and consider whether any changes may be warranted.<\/p>\n<p>We will continue to keep a close eye on this as the US Supreme Court decision is likely not the end of the story. \u00a0In her concurring opinion, Justice Sotomayor all but provided a roadmap for next steps:<\/p>\n<blockquote><p>\u201c\u2026if this Court\u2019s understanding of state law is wrong, California courts, in an appropriate case, will have the last word. Alternatively, if this Court\u2019s understanding is right, the California Legislature is free to modify the scope of statutory standing under PAGA within state and federal constitutional limits.\u201d<\/p><\/blockquote>\n<p style=\"text-align: center;\">*****<\/p>\n<h6 style=\"text-align: center;\">Conn Maciel Carey LLP<\/h6>\n<h6 style=\"text-align: center;\"><a href=\"http:\/\/www.connmaciel.com\/disclaimer\">Disclaimer<\/a><\/h6>\n<p style=\"text-align: center;\">Attorney Advertising<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Megan S. Shaked and Samuel S. Rose In the latest chapter in the enforceability of employment arbitration agreements in California, the United States Supreme Court in Viking River Cruises, Inc. v. Moriana (Viking River) weighed in&hellip;<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[813],"tags":[842,851,908],"class_list":["post-5855","post","type-post","status-publish","format-standard","hentry","category-wage-hour-compliance","tag-california-compliance","tag-class-action-defense","tag-pay-practices"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>US Supreme Court Splits the Baby on Arbitrability of PAGA Claims - Employer Defense Report<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.connmaciel.com\/employer-defense-report\/us-supreme-court-splits-the-baby-on-arbitrability-of-paga-claims\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Supreme Court Splits the Baby on Arbitrability of PAGA Claims - Employer Defense Report\" \/>\n<meta property=\"og:description\" content=\"By Megan S. 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