The Supreme Court final week dominated 8-1 (Viking River Cruises v. Moriana) that California’s Private Attorneys General Act (PAGA)—aka the trial lawyer enrichment act—doesn’t supersede class-action waivers. Now watch unions and trial legal professionals flip lemons into lemonade with a recipe from Justice
Sonia Sotomayor.
Viking worker
Angie Moriana
agreed when she was employed to arbitrate disputes individually. But after leaving the corporate she sued Viking below PAGA for failing to offer remaining wages inside 72 hours as required by state regulation. Ms. Moriana added to her criticism violations allegedly suffered by others.
PAGA is the bane of each employer in California. It lets employees stand in for the state Attorney General and sue employers over minor and unintentional labor violations. Workers who prevail hold 25% of the penalties towards employers—a lot of which matches to trial legal professionals—and the state will get 75%.
Viking moved to arbitrate Ms. Moriana’s particular person declare and dismiss these she filed on behalf of Viking employees. The U.S. Supreme Court in recent times has repeatedly affirmed that the Federal Arbitration Act broadly pre-empts inconsistent state legal guidelines, however California courts nonetheless dominated that Viking’s class-action waiver was unenforceable below PAGA.
At problem earlier than the Supreme Court was whether or not PAGA might prohibit class-action waivers in employer arbitration agreements. The three liberal Justices joined 5 conservatives (with Justice
Clarence Thomas
within the dissent) in a slender resolution that Viking might compel Ms. Moriana to arbitrate individually.
But the Court additionally urged her claims on behalf of different employees might theoretically be severed and litigated in court docket. The rub, as Justice
Samuel Alito
notes within the majority opinion, is that “PAGA provides no mechanism to enable a court to adjudicate” class-wide claims as soon as a person’s declare has gone to arbitration.
That means present state regulation doesn’t let employees sure by class-action waivers sue employers on behalf of different employees. But Justice Sotomayor in a concurrence invitations the state Legislature “to modify the scope of statutory standing under PAGA within state and federal constitutional limits.”
Translation: Democrats might amend state regulation to allow third events equivalent to unions to sue on behalf of employees. Trial legal professionals, unions and Democratic legislators pounced on her suggestion. Democratic state Sen.
Dave Cortese
stated he was “prepared to author legislation to respond” to the Court resolution.
Trial legal professional
Shannon Liss-Riordan,
who sues gig firms for a dwelling, advised the Legislature to “get busy.” Labor activist
Lorena Gonzalez
tweeted: “Well #CALeg- Justice Sotomayor just handed huge PAGA changes to you to modify the scope of statutory standing within state & federal constitutional limits in Viking River. We are here to help!” No doubt.
The Court’s Viking resolution could possibly be a pyrrhic victory for employers. It additionally appears to augur extra judicial pragmatism among the many three liberal Justices who joined the conservative majority on a slender ruling that lets unions and trial legal professionals reside to struggle one other day. And struggle they’ll.
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