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California Court PAGA decision allows employees to sue bosses twice

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The U.S. Supreme Court amended that rule in 2022, with its decision on the Viking River Cruises v. Moriana suit. This decision gave precedence to the Federal Arbitration Act (FAA) deciding that individual PAGA claims could in fact be compelled to arbitration. However, the ruling maintained that pre-dispute, wholesale PAGA waivers by employers were still unenforceable, and representative PAGA claims would still have to be decided in civil court.

This was a win for employers, Saad says, as it meant plaintiffs could not have an individual PAGA claim in arbitration and a representative, non-individual claim in the courts as well. But this latest California decision on Adolph meant that they can.

Takeaway for employers: review arbitration agreements, focus on compliance

There are several things employers should be considering in light of this latest decision, Saad says.

If PAGA claims are included in arbitration agreements, employers should prepare to defend civil actions in two separate arenas: individual claims in arbitration, and representative claims in civil court. This added complexity should also be addressed with legal counsel, by closely examining arbitration agreements with the Viking and Adolph rulings in mind.

Also, examine the cost effectiveness of including PAGA claims in arbitration agreements, said Saad.

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