Stand And Deliver: PAGA Plaintiffs May Still Litigate Representative Claims Not Compelled Into Arbitration

• Published date: 21 July 2023
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Employee Rights/ Labour Relations, Arbitration & Dispute Resolution
• Law Firm: K&L Gates
• Author: Penny Chen Fox and Neil A. Eddington

HIGHLIGHTS OF ADOLPH V. UBER TECH., INC.

• PAGA representatives retain standing to prosecute non-individual PAGA claims in court, even when their individual PAGA claims are compelled into arbitration.
• Courts may still stay non-individual PAGA claims pending resolution of the individual arbitration actions.
• An arbitrator's finding regarding whether an employee is "aggrieved," and therefore can pursue non-individual PAGA claims following a stay, is binding on the court.

BACKGROUND

Plaintiff Erik Adolph delivered food to customers through the Uber Eats platform as an independent contractor. As a condition of providing services, Adolph agreed to individually arbitrate work-related claims against Uber, including those under the Private Attorneys General Act (PAGA).¹

In October 2019, Adolph filed suit against Uber, alleging that Uber misclassified him and other delivery drivers as independent contractors. Several months later, he asserted a claim under PAGA based on the same theory.

Uber moved to compel Adolph into individual arbitration. The trial court denied Uber's motion. On appeal, the Court of Appeal affirmed the trial court's denial, citing Iskanian v. CLS Transp., 59 Cal. 4th 348 (2014), for the proposition that Uber's arbitration agreement wholly waived PAGA in violation of California public policy. Uber appealed this decision to the California Supreme Court.

THE UNITED STATES SUPREME COURT DECIDES VIKING RIVER CRUISES

In June 2022, while Adolph's appeal was pending, the United States Supreme Court decided Viking River Cruises v. Moriana, 596 U.S. __, [142 S.Ct. 1906] (2022). There, the SCOTUS stated PAGA claims are divisible into individual and non-individual claims and that the individual PAGA claims could be compelled into individual arbitration under a private arbitration agreement between parties. Justice Alito's majority opinion further explained that a PAGA representative compelled into individual arbitration lacked standing to litigate the excised non-individual component. By this reasoning, the majority held non-individual PAGA claims should be dismissed. Applied to Adolph and Uber's dispute, Uber moved, under Viking River Cruises, to compel Adolph to arbitrate his individual PAGA claims, and dismiss the non-individual PAGA claims for lack of standing.

However, despite the majority opinion, this secondary issue'what to do with the outstanding non-individual claims that are not arbitrated'remained open to answer from the California Supreme...