Encouraged by rulings by the conservative justices on the U.S. Supreme Court, employers have been trying to limit the rights of California employees to bring their claims in court. A large percentage of employers in California now require their employees to sign arbitration agreements as a condition of employment. Under these agreements, the employees waive their right to bring a claim in court and instead must pursue their claims through private arbitration.
Private arbitration is generally less favorable for employees because it is expensive and it deprives the employees of their right to have a jury decide their claims. Also, in private arbitration, it is generally impossible for plaintiffs who have similar claims to litigate their claims together.
However, in an important decision called Iskanian v. CLS Transportation (2014) 59 Cal.4th 348, the California Supreme Court ruled that claims under the Labor Code Private Attorneys General Act (PAGA) are not subject to private arbitration, regardless of whether the employee signed an arbitration agreement. Furthermore, plaintiffs who bring claims under PAGA are allowed to litigate their claims together, which makes it more efficient and cost-effective to bring their claims.
Most violations of the California Labor Code can be addressed through a PAGA claim. The Iskanian decision guarantees that PAGA will be an important tool to protect California employees from illegal conduct by their employers.