Unlike The Arbitration Agreement In Iskanian, The Agreement Here Did Not Include A Waiver Of The Right To Bring A PAGA Representative Claim.

     The Court in Eaton v. Big League Dreams Manteca, LLC, C079374 (Third District 11/2/16) (Renner, Nicholson, Murray) (unpublished) addresses an issue that some may have thought was settled after Iskanian:  whether PAGA representative claims can be the subject of mandatory arbitration.  Relying on Iskanian, the trial court in Eaton concluded that PAGA representative claims cannot be arbitrated.  However, the Court of Appeal concludes that the issue is not settled – without settling it.

     “On the one hand. . . on the other hand,” says the Court of Appeal.  On the one hand, it is plausible that PAGA representative claims cannot be arbitrated, because Iskanian treats PAGA claims as a dispute between the State of California and the employer – and the State never signed an arbitration agreement.  But on the other hand, in Iskanian, the arbitration clause included a waiver of representative PAGA claims – something the court would not countenance.  So perhaps arbitration claims can be arbitrated if they are not waived, because arbitration would provide a forum for deciding the substantive rights.

     Instead of deciding the issue, the Court of Appeal concludes that other issues must be addressed first:  the trial court “must determine whether the parties’ arbitration agreement encompasses representative PAGA claims and whether incorporation of the AAA Employment Rules constitutes clear and unmistakable evidence of their intent to delegate questions of arbitrability to the arbitrator.”  If the answer is yes, then the case gets stayed and the arbitrator must determine the scope of the arbitrator’s jurisdiction to decide the PAGA claims.

      If the arbitrator concludes that there is a lack of arbitral jurisdiction because PAGA claims are really between the State and the employer, does the can then get kicked back to the trial judge?

     BONUS TRIVIA from Wikipedia article (“Kick the Can”):  “Play scholar Rodney Carlisle notes that: ‘As outdoor and unstructured play of children continues to dwindle, the game of Kick the Can is becoming less and less known to each generation… At one point in time, teenagers played Kick the Can with younger children, and the game and its variations were passed on from child to child. Past generations remember this game fondly, and it was enough of a cultural phenomenon that it was a central player in a 1962 episode of The Twilight Zone and was incorporated later in the 1983 film of the same name.’"