California Court of Appeal Provides Guidance on Individual PAGA Claim Waivers

From Lexology, Jaime Walter discusses a recent case in which a California court provided guidance on the enforceability of an arbitration agreement with respect to Private Attorneys General Act (PAGA) claims. Jaime writes:

In its discussion of Mr. Navas’s assertion that the arbitration agreement was substantively unconscionable because it required employees to renounce their rights to bring PAGA actions, the appellate court analyzed the impact of the recent United States Supreme Court decision in Viking River Cruises v. Moriana. The Navas court explained that while Viking River Cruises made clear that employers and employees may agree to arbitrate individual PAGA claims, the standards for obtaining a waiver under California law remain in effect.

Here, the appellate court found the arbitration clause to be substantively unconscionable because it contained an improper waiver of the employee’s representative PAGA claim and an ambiguous and one-sided provision in which FVF unilaterally declared a right to forfeit an employee’s individual PAGA claim. The court noted how the agreement failed to first: (1) explain âto the Spanish-speaking employee what is an individual PAGA claim,â and (2) obtain “the employee’s consent to waive the right to file an individual PAGA claim in court”âas opposed to simply an acknowledgment of the purported waiver.

In addition, Jaime provided advice for employers who want to include PAGA claims in arbitration agreements:

  • Clearly distinguish between individual and representative PAGA claims, making clear that the agreement to arbitrate applies to the individual PAGA claim and that there is no waiver of the ability to bring a representative PAGA action.
  • Make clear that the employee actually agrees to the waiver, rather than merely acknowledging that there is one.

Source: California Court of Appeal Provides Guidance on Individual PAGA Claim Waivers – Lexology

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