Agreements by which employees waive their right to bring representative actions under the Labor Code Private Attorneys General Act (PAGA) are barred by law, the California Supreme Court ruled on June 23, 2014. PAGA permits employees to sue employers for Labor Code violations on behalf of themselves and other employees.
In Iskanian v. CLS Transportation Los Angeles, LLC, the employee and employer agreed that “each will not assert class action or representative action claims against the other in arbitration or otherwise . . . [Each] shall only submit their own, individual claims in arbitration and will not seek to represent the interests of any other person.” Contrary to this written waiver, the employee later filed suit, including a representative PAGA claim.
The California Supreme Court concluded, first, “that an employee’s right to bring a PAGA action is unwaivable.” The court found the waiver to be “contrary to public policy and unenforceable as a matter of state law.” The court found, further, that the holding based on state law was not preempted by the Federal Arbitration Act.
Although the ruling was expected by many, it is another decision that fails to give employers relief from the continuing, costly tide of PAGA litigation.
The full opinion may be found here:[PDF]