In a bid to reexamine California’s worker-protection law, rideshare companies are asking the Supreme Court to reconsider the state’s Private Attorneys General Act (PAGA). The crux of the matter is an arbitration agreement which, under the PAGA, has been seen as unenforceable by state courts.
PAGA, enacted 20 years ago, enables workers to file lawsuits on behalf of other employees and themselves against their employers for any violations of the California labor code. These lawsuits are known as representative actions, wherein the state receives most of the money awarded from the lawsuit, with remaining funds distributed among affected workers. Kalvis Golde of SCOTUSblog details a specific case involving a driver, Johnathon Gregg, who signed up to drive with Uber in California in 2016.
In setting up his account, Gregg didn’t opt out of Uber’s arbitration agreement, which asked drivers to waive their right to initiate PAGA lawsuits, preferring disputes with Uber to be solved through arbitration. Two years later, he argued in a California state court that Uber had violated state law by classifying him and other drivers as independent contractors, not employees.
Despite Uber’s attempt to enforce the arbitration agreement, state courts sided with Gregg, following a previous decision by the California Supreme Court that nullified mandatory arbitration agreements, requiring workers to waive their PAGA rights. Uber is now asking the justices to review this ruling.
A relevant development to the case is the Supreme Court’s 2022 decision in Viking River Cruises v. Moriana, deeming the PAGA inconsistent with the Federal Arbitration Act’s requirement for courts to enforce arbitration agreements. The majority found that an arbitration clause must be enforced against an employee’s right to bring a PAGA claim.
After this ruling, the Supreme Court returned Gregg’s case to the California courts. A state appeals court granted Uber’s request to have the question of whether Gregg should be classified as an employee or an independent contractor decided by an arbitrator. However, it rejected Uber’s request to dismiss the representative claims as well, leading to the current petition.
In Uber Technologies, Inc. v. Gregg, Uber is now asking the justices to reverse the state court’s ruling, arguing that Viking River’s core principle was the Federal Arbitration Act’s honoring of agreements to arbitrate in separate, individual proceedings. Uber states that California courts may not eva de the federal mandate by reinterpreting PAGA.
In an analogous case, Lyft Inc. v. Seifu, Lyft is approaching the justices to review and reverse a decision by another California appeals court. This ruling asserts that a driver can maintain a representative action under PAGA, while an arbitrator decides their individual claim to reclassifi cation as an employee.
The legal implications of these petitions are complex, and their outcomes could have far-reaching implications for the balance between state worker protection laws and federal arbitration requirements.