U.S. Supreme Court may invalidate California’s PAGA

California’s Private Attorneys General Act of 2004 (PAGA) allows employees to file lawsuits as “private attorneys general” over California Labor Code violations. In other words, a current or former employee may go to court on behalf of herself and other employees to rectify a violation of the Labor Code, with the opportunity for group damages and attorneys’ fees.

Many private employers have tried to avoid PAGA suits by requiring employees to sign individual employment contracts that require binding arbitration of their disputes and disallowing PAGA class actions.

A recent case before the U.S. Supreme Court could present a mortal challenge to PAGA.

Background

The issue in the Supreme Court case, Moriana v. Viking River Cruises, Inc., is whether the PAGA process overrides employment contracts that allow only individual claims. The Court will now decide whether PAGA violates federal labor policy favoring arbitration and individualized claims.

On one side of the issue are business interests intent on forcing employees into arbitration instead of court and preventing class action claims in arbitration. On the other side is California’s unique effort to enforce its labor laws through private attorneys general—always aided by plaintiffs’ lawyers, who are among PAGA’s chief beneficiaries.

PAGA