In a significant development in July, the California Supreme Court issued a much-anticipated Private Attorneys General Act (PAGA) decision in the case of Adolph v. Uber Technologies, Inc. The decision marks a clear departure from the United States Supreme Court’s 2022 ruling in the case of Viking River Cruises v. Moriana.
Unlike the federal court’s stance, the state’s highest court held that non-individual PAGA standing does not cease to exist after a plaintiff is compelled to arbitrate his or her individual PAGA claims. This remarkable shift towards a more plaintiff-friendly standpoint not only answers a long-standing question in California law but also could potentially stimulate a surge in PAGA lawsuits in the future.
The main question arising from this development is what the implications might be for corporations based in California. Prior legal standing for PAGA claims hinged on the plaintiff’s current employment status, a factor which has now been rendered moot by the Supreme Court’s ruling.
According to the analysis provided by Jenner & Block, this decision could potentially encourage plaintiffs to seek redress even after their individual PAGA claims are sent to arbitration. Businesses, in the meantime, will likely have to adapt to this new legal landscape by considering changes to their arbitration strategies.
While the ruling is specific to California law, it provides an interesting precedent other states may consider in the future. Legal professionals in the corporate sector should keep an eye on further developments and the potential ripple effects this ruling can have in other jurisdictions.