PAGA Claims Are Outside the Principles of the FAA and the Supreme Court Decisions Applying It

     The Private Attorney General Act of 2004 (PAGA), Labor Code sections 2698 through 2699.5, authorizes actions by aggrieved employees on their own behalf and on behalf of other employees to recover civil penalties from employers for Labor Code violations.  Brown v. Ralphs Grocer Co., 197 Cal.App.4th 489 (2011), does not require a plaintiff to arbitrate her individual PAGA claims pursuant to an arbitration agreement. 

      Employee Shelley Pickett brought a representative action under PAGA against her employer, asserting that employees operating cash registers had not been provided with seats, in violation of Labor Code section 1198, and a Wage Order.  The trial court denied the employer’s motion to compel arbitration.  The Court of Appeal, with two concurring opinions, followed Brown v. Ralphs Grocer Co., sided with the trial court judge, and affirmed the order denying defendant’s motion to compel arbitration.  Pickett v. 99 Cents Only Stores, Case No. B246394 (2nd Dist. Div. 5 Oct. 15, 2013) (Mosk, J., author, with two concurrences) (unpublished).

     Following the reasoning in Brown v. Ralphs Grocer Co., a plaintiff does not bring a PAGA claim as an individual claim, but rather as the proxy or agent of the state’s labor law enforcement agencies – who are not parties to an arbitration agreement.  Brown has been criticized, but it has not been overruled.  Whether arbitration agreements can override the statutory right to bring representative claims under PAGA is an issue currently awaiting review in Iskanian v. CLS Transportation Los Angeles, LLC, 206 Cal.App.4th 949 (review granted Sept. 19, 2012, S204032).  For my earlier blog post on Brown, click here; for my earlier post on Iskanian, click here.