PAGA and Arbitration: The Growing Conflict between State and Federal Court

In earlier posts, we have explored the question of whether arbitration agreements that are broad enough to include claims under California’s Private Attorneys General Act (Labor Code section 2698), or PAGA, should be enforced.  As of March 2017 there is a growing split between state and federal courts on this issue.  As a result, which court a case winds up in may very well determine how the court rules on this critical question. Continue reading “PAGA and Arbitration: The Growing Conflict between State and Federal Court”

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No Arbitration of PAGA Claims

PAGA continues to be an important tool for workers in California seeking to enforce their rights under the Labor Code.  Employers continue to try to force PAGA claims into arbitration, where they think that they have a decisive advantage.  Yet courts continue to block these efforts.  As a result, PAGA claims remain in court where they belong.

The latest case to hold that PAGA claims cannot be arbitrated is Hernandez v. Ross Stores, Inc. (2d DCA Pub. Order 1/3/17) E064026.  There, the plaintiff, a warehouse worker, sought to bring a PAGA-only action against the discount store giant for failure to pay wages, failure to properly itemize hours, and failure to pay overtime.  Ross attempted to compel Hernandez to arbitrate her individual claims, arguing that its arbitration agreement stated that it applied to “any disputes arising out of or relating to the employment relationship” between Ross and an employee.  Ross contended, based upon this language, that before Hernandez could bring a PAGA action, she had to arbitrate the “dispute” over whether she was an aggrieved employee.

Not surprisingly, this too-clever-by-half argument failed.  Both the trial court and Division Two of the Second District Court of Appeal held that Hernandez could not be compelled to arbitrate her PAGA claims.  The trial court grounded its analysis in the seminal case of Iskanian v. CLS Transportation (2014) 59 Cal.4th 348, which held that PAGA actions-whether seeking penalties for one employee or for a group of them-are fundamentally law enforcement actions designed to protect the public.  In PAGA cases, there are therefore no individual claims to arbitrate. Continue reading “No Arbitration of PAGA Claims”

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Is your California employer paying you on time? If not, it may face significant penalties under PAGA.

Employers in California have to pay their employees by a certain date.  That date depends on whether the payments are made every two weeks (bi-weekly), twice a month (bi-monthly), or otherwise.  If an employer does not make its payments on time, it can face significant liability under the Private Attorneys General Act, as described below. Continue reading “Is your California employer paying you on time? If not, it may face significant penalties under PAGA.”

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Can California Employers Combine Rest Breaks into One Break?

One common source of PAGA penalties occurs when employers fail to authorize and permit the rest breaks that are required under California law.   When this happens, workers can recover one hour of pay at their regular hourly rate for each day they are deprived of one or more rest breaks.  They can also seek penalties […]

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Perez v. U-Haul: Employers cannot compel arbitration of standing issue in PAGA cases

Some companies continue to try to force employees to arbitrate their individual PAGA claims before bringing their representative PAGA claims in court.  Two appellate decisions make it crystal clear that California courts have rejected these efforts, and that workers are not required to litigate PAGA claims in multiple forums.

By way of background, in Iskanian v. CLS Transportation, the California Supreme Court held that employers could not compel plaintiffs to arbitrate their representative PAGA claims.  In the wake of that case, some defendants began to argue that where workers had signed an arbitration agreement, they should be required to arbitrate their individual claims before proceeding with their representative claims in court. Continue reading “Perez v. U-Haul: Employers cannot compel arbitration of standing issue in PAGA cases”

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California Wage Statements and Exempt Employees

Gear-and-Gavel_dark-blueCalifornia Labor Code section 226 requires that an employer provide its employees with wage statements, sometimes known as pay stubs, when it pays their wages.  Section 226(a) provides a list of the specific information that must be included in wage statements.  Employers that ignore these requirements face liability both under section 226(e), and, through PAGA, under section 226.3.

One of the requirements of section 226(a) is that the employer state the total number of hours that an employee worked.  This requirement is important for most employees, because it is the most effective way to figure out whether you are paid for all hours worked.  But what about employees who are not paid by the hour, like salaried employees or employees who are paid on a commission basis? Continue reading “California Wage Statements and Exempt Employees”

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PAGA and Intervention: Replacing a Plaintiff Who Wants Out

One of the seminal cases in the world of California’s Private Attorneys General Act, or PAGA, is Iskanian v. CLS Transportation.  Iskanian wound its way up to the California Supreme Court, which ultimately held that arbitration agreements that attempt to limit a plaintiff’s right to bring PAGA actions are unenforceable.

Now Iskanian is back in the news.  After years of struggle, the plaintiff, Mr. Iskanian, decided that he did not want to proceed with the case.  (It is unclear why he reached that decision.)  In an interesting twist, he then filed a motion, representing himself, to dismiss his individual claims (which were being arbitrated) as well as his PAGA claims.  His attorneys then sought to replace him with Mr. Frost, another individual from the group of limousine drivers that Mr. Iskanian belonged to.   Continue reading “PAGA and Intervention: Replacing a Plaintiff Who Wants Out”

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New PAGA Rules Take Effect July 1, 2016

Governor Jerry Brown’s budget for 2016-17 contains several significant amendments to the procedural requirements of the Private Attorneys General Act, or PAGA.  These amendments apply to PAGA cases filed on or after July 1, 2016.  They are limited to cases alleging violations of the California Labor Code provisions listed in Labor Code section 2699.5. The amendments fall […]

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