Gig employers including Uber and Lyft hoping for clarity about whether a unique California labor law can force arbitration of labor law claims brought on the state’s behalf may get some answers before summer in the latest episode of a long-running dispute between the US and California supreme courts.
One of the six cases SCOTUS sent back to California last year is up for oral argument before a state appellate panel Tuesday afternoon. Moriana v. Viking River Cruises, in which the nation’s high court ruled courts can force workers to arbitrate individual claims, is returning to the California Court of Appeal, Second District which in September 2020 held plaintiff Angie Moriana had brought a representative claim that can’t be compelled to arbitration.
Moriana was a Viking sales representative who sued her former employer alleging state wage and hour violations. She’d agreed before hiring to submit any employment dispute to binding arbitration, but sued anyway under the California Private Attorneys General Act brought on the state’s behalf. The unique California law deputizes individuals to sue for labor violations and split the proceeds with the state in what companies say is a bounty bill.
Courts have held that arbitration can’t be forced absent a showing the state also consented to the agreement.
Employers rejoiced when the US Supreme Court sided with the cruise line and ruled that workers who signed arbitration agreements and then brought PAGA claims must arbitrate their individual claims.
But appellate justices last week were skeptical of employer arguments in driver Million Seifu’s lawsuit against Lyft Inc., and Johnathon Gregg’s lawsuit against Uber that those workers no longer had standing to represent other workers.
If the rulings, due within 90 days of oral arguments, follow the trend, justices would again side with workers. State appellate courts consistently have rejected employer arguments that PAGA claims, which are brought as if the individual is standing in the state’s shoes, must be arbitrated. The lead case on PAGA, Adolph v. Uber Technologies Inc., is fully briefed before the California Supreme Court with no oral arguments yet scheduled.
“This has been part of a battle between the California Supreme Court and US Supreme Court, literally it’s been going on for decades,” said
‘One Thing is Clear’
California has pushed against arbitration while the justices in Washington upheld the Federal Arbitration Act which broadly supports it. The California Supreme Court’s ruling in Adolph v. Uber is “not going to be the end of the debate. It’s going to be going on for at least several years because no matter what the California Supreme Court decides, there’s going to be requests, candidly by employment lawyers to get to the US Supreme Court, which will have the final word,” Neubauer said Monday.
“One thing is clear – the Federal Arbitration Act trumps PAGA. The question is how will the US Supreme Court interpret the Federal Arbitration Act,” Neubauer said.
Most recently, the state’s Court of Appeal for the Fourth District held March 7 that despite “the deep deference we afford the United States Supreme Court, even on purely state law questions where the United States Supreme Court’s opinions are only persuasive, not binding,” and that the panel must follow Kim v. Reins International California Inc. “and hold that plaintiffs retain standing to pursue representative PAGA claims in court even if their individual PAGA claims are compelled to arbitration.”
“We simply cannot reconcile the Viking decision’s standing analysis with the Kim decision,” the 3-0 court in Orange County said.
And California trial courts dismissed representative claims after moving individual claims into arbitration in just six of 75 decisions collected and analyzed by Lauren Teukolsky of the plaintiff-side firm Teukolsky Law APC. Bloomberg Law independently reviewed those decisions.
Catherine Fisk, University of California, Berkeley Law professor, and Christina Chung, UC Berkeley Center for Law and Work executive director, argue that the US Supreme Court “simply misunderstood California law on PAGA standing; California law is clear that a plaintiff may litigate a PAGA action as a representative of the state for the labor law violations suffered by others regardless of whether the plaintiff must arbitrate her own claim.”
The case is Moriana v. Viking River Cruises, Inc., Cal. Ct. App., 2d Dist., No. B297327, oral arguments 3/14/23.
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