Justices Scrutinize California Worker Law’s Arbitration Limits

The U.S. Supreme Court heard arguments over whether a unique California law that allows employees to bring actions on behalf of the state overrides a federal preference for arbitration, as the justices weigh the power of actions asserting labor code violations.

The court appeared divided Wednesday on whether the Federal Arbitration Act, which governs pacts involving private dispute resolution, preempts California’s Private Attorneys General Act.

At stake is whether the thousands of cases brought under PAGA each year can allow employees to circumvent arbitration and force a slew of labor claims into court, including in myriad cases filed against gig ...