the plaintiff’s individual PAGA claim has been compelled to arbitration. These holdings are significant because they allow businesses to avoid class actions and representative PAGA claims while remaining in arbitration. Businesses still face real PAGA risk, however. First, the California Supreme Court has granted review of Adolph v Uber to consider the second holding of Viking River. The California Supreme Court could decide this statutory standing issue in a way that permits a representative PAGA claim brought on behalf of other employees to proceed in court, irrespective of whether the plaintiff is arbitrating her individual PAGA claim. Still, some employers can get around Adolph and receive the full benefits of Viking River. For some businesses, all of their employees have signed an arbitration agreement with a PAGA waiver. This means that even if the PAGA standing portion of Viking River is undone by Adolph, and trial courts retain jurisdiction over representative PAGA claims after the plaintiffs have been compelled to arbitrate their individual PAGA claims, there will be no one available to participate in those representative PAGA actions. This conclusion derives from executed waivers, not standing, which makes Adolph irrelevant. To secure a dismissal, businesses must make this argument when courts intend to stay a representative PAGA claim until Adolph is decided. If a court nevertheless stays the case, the employer has great settlement leverage. Second, if this approach is followed, an employer can face a flood of individual arbitrations, assuming opposing counsel has access to a meaningful percentage of the workforce. Because California law requires employers to pay all expenses unique to mandatory arbitration, employers face significant arbitration costs not present in court, such as filing fees and arbitrator fees. To minimise these risks, employers can add mass arbitration protections to their arbitration agreements, including a process to arbitrate a few test cases while the rest of the portfolio is stayed and no arbitration fees are incurred. What other trends do you see on the horizon for California employment law? There are many future developments that employers should watch, including the following: Based on current trends, the California Supreme Court could make it unlawful for employers to round employee time punches. It already barred rounding of employee meal period time punches in Donohue v AMN Servs., LLC, 11 Cal. 5th 58 (2021). And more recently, the California Court of Appeal in Camp v Home Depot USA, Inc, 2022 WL 13874360 (Cal. App. Oct. 24, 2022), held that if employers have captured the exact amount of time employee have worked, rounding is unlawful, even if it benefitted the employees overall. other compensation metric available: an employee’s base hourly wage. The Ferra holding was not obvious beforehand because the statute and Wage Orders that require premium pay do not say it must be given at the regular rate of pay; a different term is used. Several district courts and the California Court of Appeal agreed that premium pay is given at the base hourly wage, because if the legislature intended premium pay to be given at the regular rate of pay, it easily could have said so, as it did elsewhere in statutes for different types of compensation. The California Supreme Court can resolve this retroactivity problem when it announces new law by opining then whether the good faith dispute defence is available. Sometimes these legal changes may be obvious and employers will be penalised. But when legal changes are not foreseeable, penalties are unfair and no employer should have to spend money fighting over the good faith dispute defence or be forced to accept inflated settlements. What is the Private Attorney General Act and what is the significance of the US Supreme Court allowing individual PAGA claims to be arbitrated? PAGA is a California statute that authorises employees to file lawsuits to recover civil penalties on behalf of themselves, other employees and the State of California for violations of the California Labor Code. A major reason that PAGA lawsuits have often been filed is a line of cases beginning with the California Supreme Court in Iskanian v CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), which holds that PAGA claims cannot be waived or compelled to individual arbitration. But in Viking River Cruises, Inc v Moriana, 142 S. Ct. 1906 (2022), the US Supreme Court held that (1) a plaintiff’s individual PAGA claim can be compelled to arbitration and (2) as a matter of state law standing under the PAGA statute, a representative PAGA claim brought on behalf of other employees must be dismissed once 16 LAWYERMONTHLYDECEMBER 2022 The lack of a reliable selfhelp guide short of a California Supreme Court opinion leaves businesses having to constantly engage lawyers to anticipate forthcoming legal changes.
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