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Management of PAGA Litigation after Iskanian

In Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014), the California Supreme Court ruled that claims to enforce civil penalties under the Private Attorneys General Act (PAGA), were not waivable, and refused to enforce a predispute agreement to arbitrate that purported to impose such a waiver. (Class action waivers must be enforced under AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011).) In the wage of Iskanian, the trial courts have routinely severed and retained PAGA claims, while ordering non PAGA claims to arbitration.

In Williams v. Superior Court (Pinkerton), Case No. B261007 (Cal. Ct. App. June 9, 2015), the employee’s complaint asserted a single representative PAGA claim. The trial court ordered the underlying dispute over whether there had been a Labor Code violation to arbitration. The Second District Court of Appeal reversed the order as contrary to Iskanian. “[W]e conclude that petitioner’s single cause of action under PAGA cannot be split into an arbitrable ‘individual claim’ and a nonarbitrable representative claim.”

Hence, employees who are willing to forego any individual recovery and be content with a percentage of the civil penalties under PAGA may avoid arbitration.