Private Attorneys General Act Review – 2025

emphasized that an employer has no due process right to present the testimony of an “unlimited number of individual employees” or “each allegedly aggrieved employee.” Id. The Supreme Court concluded by noting that trial courts have “numerous tools” to manage complex cases and suggested that the “extent of liability” in a PAGA case can be determined by surveys or statistical methods that estimate the number of aggrieved employees. Id. at 606. The Supreme Court emphasized that the burden of proof in a PAGA case remains with plaintiffs who should endeavor to be “prudent in their approach to PAGA claims” and that, if “a plaintiff alleges widespread violations of the Labor Code . . . but cannot prove them in an efficient manner, it does not seem unreasonable for the punishment assessed to be minimal.” Id. at 607. The Estrada opinion strikes a blow to employers facing PAGA claims by removing lack of manageability as a ground for dismissal. While the California Supreme Court encouraged PAGA plaintiffs to be prudent to their approach to their PAGA theories, in practice, such prudence is uncommon. On the bright side, however, the decision leaves open an employer’s ability to seek dismissal on due process grounds. 2. Decisions Regarding The PAGA And Arbitration In Viking River Cruises, Inc. v. Moriana, et al. , 596 U.S. 639 (2022), the U.S. Supreme Court held that individual PAGA claims are arbitrable. In dicta , the Supreme Court expressed its view that, after a plaintiff ’ s individual PAGA claims are compelled to arbitration, the plaintiff then lacks standing to pursue representative PAGA claims in court. The California Supreme Court took up this standing issue in Adolph, et al. v. Uber Technologies, Inc. 14 Cal.5th 1104 (2023), and disagreed. It held that once a PAGA plaintiff ’ s individual claims are compelled to arbitration, the plaintiff retains standing to maintain non-individual PAGA claims in court so long as they are an “aggrieved employee.” Id. at 1105. The California Supreme Court clarified several additional points about the PAGA in Adolph . First, even though individual PAGA claims may be pending in arbitration and non-individual PAGA claims pending in court, the claims all remain one action, and the court action may be stayed pending completion of arbitration. Second, if the plaintiff loses in arbitration, at that juncture, the plaintiff no longer has standing to maintain non-individual PAGA claims. Third, if the plaintiff prevails in arbitration or settles their individual claims, they continue to possess standing to return to court to pursue non-individual PAGA claims on behalf of others. Since Viking River, employers have sought to compel individual PAGA claims to arbitration with mixed results, as outcomes often hinge on the language of the applicable arbitration agreement. Reflecting continued judicial hostility to arbitration, some courts have denied motions to compel arbitration of individual PAGA claims, citing ambiguity in arbitration agreement language or the absence of a severability clause. Although the initial flurry of decisions on this topic is now dying down a bit, for employers who have yet to do so, it is critical to update arbitration agreement language to ensure that the right to arbitration is preserved and consistent with the post- Viking River PAGA lexicon. This is exemplified by several decisions in PAGA cases this past year. In Leeper, et al. v. Shipt, Inc., 2024 Cal. App. LEXIS 839 (Cal. App. 2d Dist. Dec. 30 2024), the defendants appealed the trial court’s decision denying their motion to compel arbitration in a lawsuit brought by the plaintiff under the Private Attorneys General Act (PAGA). The plaintiff, a former Shipt worker, alleged that Shipt misclassified her and others as independent contractors in violation of state wage & hour laws. The trial court ruled that since the plaintiff only sought non-individual civil penalties, there were no individual claims to arbitrate. On appeal, the California Court of Appeal reversed. It reasoned that every PAGA action inherently includes an individual claim, alongside the representative claim. The Court of Appeal opined that the statutory language of the PAGA states that a PAGA action is one brought both on behalf of the plaintiff (the individual claim) and on behalf of others (the representative claim). The Court of Appeal thereby reversed the trial court’s ruling and ordered it to compel arbitration for the plaintiff’s individual claim and stay the litigation of the representative claim following arbitration. In Haluska, et al. v. Costar Realty Information, Inc., 2024 Cal. App. Unpub. LEXIS 8038 (Cal. App. 4th Dist. Dec. 19, 2024), for example, the plaintiff filed a class action and brought a PAGA claim against the defendant. The

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