Seyfarth Synopsis: The Second Appellate District entered the fray and, like the Fourth and Fifth Districts in Galarsa and Piplack, held that an individual PAGA representative still maintains standing to pursue non-individual representative PAGA claims in court, even if the individual claims are compelled to arbitration.
In concluding that plaintiffs compelled to arbitrate their individual PAGA claims retain standing, the court reasoned that while the arbitration agreement required the plaintiff "to litigate a portion of his PAGA claim in an alternative forum governed by different procedures... PAGA does not require a plaintiff to resolve certain portions of his or her PAGA claim in a judicial—as opposed to an arbitral—forum." Thus, the employee is not stripped of standing "simply because he or she has been compelled to arbitrate his or her individual PAGA claim."
Unlike Galarsa and Piplack, the court expressly held that the representative claim in state court should be stayed pending the outcome of individual arbitration. This conclusion was based on the language of the arbitration agreement at issue: "To the extent that there are any claims to be litigated in a civil court of competent jurisdiction because a civil court of competent jurisdiction determines that the PAGA Waiver is unenforceable with respect to those claims, the [p]arties agree that litigation of those claims shall be stayed pending the outcome of any individual claims in arbitration."
Gregg is the third of a series of recent appellate decisions disagreeing with the U.S. Supreme Court's Viking River majority opinion to hold that plaintiffs do not lose representative standing once their individual PAGA claims are compelled to arbitration. However, the court enforced the language of the arbitration agreement which expressly provided that the representative claims were to remain stayed—a helpful tool to be considered in drafting arbitration agreements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.