BUSINESS BRIEF:

QUARTERLY EMPLOYMENT LAW

UPDATES

The California Supreme Court Will Review the Arbitrability of PAGA Claims Involving Unpaid Wages

SUMMARY: The Plaintiff, an employee of a bank, had signed an agreement to arbitrate disputes with her employer. The employee filed suit in state court under California’s Private Attorneys General Act (“PAGA”) seeking penalties and underpaid wages under Labor Code section 558 on behalf of herself and other “aggrieved employees.” The trial court ordered the matter into arbitration. The appellate court reversed the trial court’s order holding that employees can only bring Labor Code section 558 claims under PAGA and PAGA claims cannot be forced into arbitration. 

QUESTION FOR THE SUPREME COURT: A different Court of Appeal decision in 2017 issued an opposite ruling.  The California Supreme Court will now decide whether a PAGA action seeking the recovery of individualized lost wages under Labor Code section 558 falls within the preemptive scope of the Federal Arbitration Act. The Court’s ruling could have a broad impact on the arbitration of all PAGA claims, not just claims involving Labor Code section 558.   Lawson v. Z.B., N.A. (S246711)

Please contact Phillip Maltin for further information about these cases pending before the California Supreme Court.

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