The U.S. Supreme Court’s decision in Viking River Cruises v. Moriana, 142 S. Ct. 1906 (2022), in June 2022 delivered a victory for California employers facing claims brought pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA), as we previously reported. Since then, the California state and federal courts have seen an influx of motions to compel arbitration of individual PAGA claims and to dismiss (or in the alternative stay) the non-individual PAGA claims.The first aspect of the Viking River decision – that individual PAGA claims can be compelled to arbitration – has been consistently followed by lower courts. And, despite various creative arguments by plaintiffs trying to distinguish Viking River’s holding from the specific facts and agreements in their cases, the vast majority of courts have granted motions to compel arbitration of individual PAGA claims. However, the second aspect of the Viking River decision – that the remaining non-individual PAGA claims should be dismissed because they now lack a PAGA plaintiff to pursue them – has been met with mixed results.
Over the past nine months, many federal courts have followed the guidance from Viking River and have dismissed the non-individual PAGA claims after compelling the individual PAGA claims to arbitration. Likewise, some state courts have also followed suit, dismissing the non-individual PAGA claims.
Most state courts, however, are staying, rather than dismissing, the non-individual PAGA claims after compelling the individual PAGA claims to arbitration. The stay is usually granted for one of two reasons (with some courts citing both reasons as grounds for a stay): (1) stay the non-individual PAGA claims pending arbitration of the individual PAGA claims; or (2) stay the non-individual PAGA claims pending the California Supreme Court’s anticipated decision in Adolph v. Uber Technologies, Inc., No. S274671 (Cal. Aug. 2022).
For those courts that stay the non-individual PAGA claims pending arbitration of the individual PAGA claim, the purpose of the stay is to allow the arbitrator to decide if the plaintiff can prove any Labor Code violations. In other words, the arbitrator is tasked with determining if the plaintiff is an “aggrieved employee,” defined in the PAGA statute as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” If the arbitrator finds for the employer, then the plaintiff would lack standing to pursue the non-individual PAGA claims because only “aggrieved employees” have standing to bring PAGA claims. This very issue was recently addressed by the California Court of Appeal in Rocha v. U-Haul Co. of California, 88 Cal. App. 5th 65, 76 (2023). Specifically, the Rocha court concluded that the arbitrator’s finding that the plaintiffs “did not suffer a section 1102.5 violation as alleged in the operative complaint precludes them from qualifying as ‘aggrieved employees’ based on that same alleged violation.” Rocha’s holding provides further support to courts for staying the non-individual PAGA claims pending the arbitration of a plaintiff’s individual PAGA claims.
And for those courts that stay the non-individual PAGA claims pending the decision in Adolph, the expectation is that Adolph will shed light on PAGA standing. But, while Adolph is expected to address the issue raised in Viking River head-on (i.e. whether non-individual PAGA claims should be dismissed for lack of standing once the individual PAGA claims are compelled to arbitration), it may not address the issue of whether trial courts should stay the remaining non-individual PAGA claims pending arbitration of the individual PAGA claims. Only time will tell.
In the interim before Adolph is heard and decided, we can expect to continue to see many state courts staying the non-individual PAGA claims when individual PAGA claims have been compelled to arbitration. And, while Adolph may give some clarity as to how courts should move forward, it may also leave some questions unanswered or create new questions, as seems to be the trend with the continuously developing case law surrounding PAGA over the past two decades.We’ll continue to keep a close eye and report on this developing trend.
 Courts have generally found the arbitration agreements to be enforceable, even without an explicit severability provision in the arbitration agreement.See, e.g., Valencia v. Bruce’s Prime Ribs & Spirits, Los Angeles Superior Court, Case No. 22STCV26952 (order dated Feb. 6, 2023) (finding that the agreement “impliedly allows the severance of unenforceable portions of the agreement”).
See, e.g., Rainey v. A Place for Rover, Inc., No. 2:22-CV-01810-RGK-E, 2022 WL 16942840 (C.D. Cal. Sept. 1, 2022); Radcliff v. San Diego Gas & Elec. Co., No. 20-CV-1555-H-MSB, 2022 WL 4229305 (S.D. Cal. Sept. 12, 2022); Garcia v. LQ Mgmt., LLC, No. 2:20-CV-06306-FLA-JC (C.D. Cal. Sept. 12, 2022); Johnson v. Lowe’s Home Centers, No. 221CV00087TLNJDP, 2022 WL 4387796 (E.D. Cal. Sept. 22, 2022); Callahan v. Paychex N. Am. Inc., Case No. 21-CV-05670-CRB, 2022 WL 11902205 (N.D. Cal. Oct. 20, 2022)).
See, e.g., Acosta v. Mad Engine Holdings LLC, San Diego Superior Court, Case No. 37-2022-000000095-CU-OE-CTL (order dated July 29, 2022); Jackson v. Wash Multifamily Laundry Systems, LLC, Los Angeles Superior Court, Case No. 22TRCV00039 (order dated Sept. 22, 2022); Huff v. Interior Specialists, Inc., San Diego Superior Court, Case No. 37-2021-00016138-CU-OE-CTL (order dated Oct. 21, 2022); Gutierrez v. Panera, LLC, Los Angeles Superior Court, Case No. 22TRCV00424 (order dated Jan. 10, 2023).Recently, however, some California Courts of Appeal have weighed in on this issue, finding that a dismissal of non-individual PAGA claims when the individual PAGA claims are compelled to arbitration is improper.See, e.g., Piplack v. In-N-Out Burgers, 88 Cal. App. 5th 1281 (2023) (holding that “plaintiffs retain standing to pursue representative PAGA claims in court even if their individual PAGA claims are compelled to arbitration,” but not addressing whether the representative claims should be stayed pending arbitration of the individual PAGA claims).
 As previously reported, the high court is set to address the question of whether an employee who has been compelled to arbitrate individual claims maintains statutory standing to pursue “PAGA claims arising out of events involving other employees.” In other words, Adolph is expected to address the second aspect of Viking River described above (although it is possible the high court will address more than that). The matter has been fully briefed, along with several amicus curiae briefs. Oral argument is expected to be set within the next few months.
See, e.g., Gozzi v. Acadia, Los Angeles Superior Court, Case No. 19STCV39861 (order dated July 13, 2022); Adams v. Pacific Villa, Inc., Los Angeles Superior Court, Case No. 20STCV37260 (order dated July 27, 2022); Mendoza v. Laguna Cookie Company, Orange County Superior Court, Case No. 19-1107762 (order dated Aug. 12, 2022); Garcia v. St. Paul’s Episcopal Home, Inc., San Diego Superior Court, Case No. 37-2022-22641 (order dated Jan. 27, 2023).
 Cal. Lab. Code, § 2698 et seq.
 For example, in Hailey v. Specialty Restaurants Corp., Orange County Superior Court, Case No. 30-2022-01255938 (order dated Sept. 30, 2022), the court reasoned: “[T]he arbitrator may decide that Plaintiff hasn’t suffered any of the Labor Code violations complained of, meaning Plaintiff lacks PAGA standing regardless of what happens in Adolph. For these reasons, the proper course is to deny the request to dismiss the claims without prejudice to that request being renewed upon conclusion of Plaintiff’s individual arbitration.”
See, e.g., Flores v. Amwest, Inc., Los Angeles Superior Court, Case No. 21STCV16066 (order dated Oct. 4, 2022); Kunsman v. Patriot Environmental Services, Sacramento County Superior Court, Case No. 34-2021-310042 (order dated Oct. 25, 2022); Castro v. Clay Lacy Aviation, Inc., Los Angeles Superior Court, Case No. 21VECV00304 (order dated Nov. 17, 2022); Mendoza v. Streamline Finishes, Inc., Orange County Superior Court, Case No. 30-2021-01207462-CU-OE-CXC (order dated Dec. 1, 2022); Lopez v. P.R. Perneky Management Corp., Los Angeles Superior Court, Case No. 22AHCV00578 (order datedFeb. 2, 2023) (staying the representative PAGA claims, finding it “reasonable to expect further judicial clarification on the standing issue”).