Duane Morris Private Attorneys General Act Review – 2024

of Appeal opined that PAGA plaintiffs with overlapping claims may have something significant to add to the settlement approval process because they can point out deficiencies in the settlement that the parties thereto may not have incentive to identify. The Court of Appeal remanded the case with instructions to the trial court to reconsider the motion to intervene and stay request and further noted that the trial court has broad discretion to coordinate the actions and to speak with the judges in the other PAGA cases to determine the best way to proceed. As addressed in further detail below, on November 29, 2023, the California Supreme Court granted review in Accurso pending consideration and disposition of related issues in Turrieta v. Lyft , Inc ., Case No. S271721. VI. Notable California State Court PAGA Rulings 1. Decisions Regarding PAGA And Arbitration The California Court of Appeal applied Viking River to reach opposite outcomes in Westmoreland, et al. v. Kindercare Education LLC , 90 Cal.App.5th 967 (Cal. App. 2023), and Gentry, et al. v. Robert Half International, Inc ., 2023 Cal. App. Unpub. LEXIS 5886 (Cal. App. Oct. 3, 2023). The difference in outcomes was based on problematic language in savings or severability clauses in the arbitration agreements at issue in both appeals. In Westmoreland , the Court of Appeal considered the meaning of a savings clause and concluded it mandated the plaintiff’s class and PAGA claims to be litigated in court. The savings clause contained two sentences. The first sentence provided that, if “any provision” of the arbitration agreement was determined to be unenforceable, the unenforceable provision would be severed and the remainder of the agreement unaffected. 90 Cal.App.5th at 971. The second sentence — a poison pill provision — provided that, if the waiver of class and collective claims clause (waiver clause) was deemed unenforceable, then the entire agreement was invalid and any class, collective, or representative action claim “must be filed in court.” Id . at 972. The waiver clause stated that class, collective, and representative claims were waived. This was in part unenforceable because the plaintiff’s non-individual PAGA claims could not be waived as a matter of law. The question thus was which sentence of the savings clause — the first or the second — was triggered. The employer argued that the only way the second sentence, i.e ., the poison pill provision, would apply was if the entirety of the waiver clause, and not just a portion of it, was deemed unenforceable. The Court of Appeal disagreed. It explained that, at the time the agreement was signed in 2016, it was clear that class action waivers were enforceable and thus there could never be any scenario where the entire waiver class was unenforceable. Accordingly, the Court of Appeal interpreted the second sentence of the savings clause to mean that, if a portion of the waiver clause was deemed unenforceable, then the entire agreement was invalid and any class, collective, or representative action claim “must be filed in court.” Id . at 981. In other words, one unenforceable part of the waiver clause voided the entire agreement and thus all of the plaintiff’s claims — class action claims included — remained viable in court. The arbitration agreement in Gentry provided in a covered claims clause that “no court or arbitrator shall determine any of my rights or claims on a class, collective, or representative basis,” that the employee retained the right to “bring claims in arbitration for myself as an individual,” and that the employee would not “initiate or prosecute any lawsuit in any way related to any claim covered by this agreement.” 2023 Cal. App. Unpub. LEXIS 5886, at *7-8. A severability clause provided that “[i]f any provision of the [covered claims clause] was determined to be void or unenforceable, then this Agreement shall be of no force or effect, because the parties intended to create an agreement to arbitrate individual disputes only.” Id . at *8. The Court of Appeal interpreted the covered claims clause language to impermissibly waive Gentry’s right to bring non-individual PAGA claims in any forum. Because of that impermissible provision, the Court of Appeal applied the severability clause, which it viewed as a poison pill provision, to invalidate the entirety of the agreement to arbitrate.

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