No Waiver Of PAGA Representative Claims (Yet)

This week, the U.S. Supreme Court denied certiorari in connection with the California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angleles, LLC.  Had the Court heard the Iskanian case, it was expected to find that representative claims under California’s Private Attorney General Act (PAGA) could be waived by an arbitration agreement, as has been approved with class action claims.  The U.S. Supreme Court, however, decided that it would not hear the dispute, leaving the holding in Iskanian to be good law, at least for now.

The U.S. Supreme Court’s decision to refrain from reaching a holding on this issue surprised observers for two reasons: (1) the Court has historically been skeptical of California decisions involving arbitration agreements, reversing several in recent years; and (2) numerous federal courts in California have rejected Iskanian’s holding that PAGA representative claims cannot be waived by an arbitration agreement, leaving a divergence of holdings on the issue.  Of the lower court cases, many are winding their way through the courts and could eventually find their way to the U.S. Supreme Court’s doorstep in the not-too-distant future.

For now, however, PAGA representative claims cannot be waived by an arbitration agreement, at least in California state courts.

- Dan Handman

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