The U.S. Supreme Court, in its most recent arbitration decision, has ruled that the Federal Arbitration Act (FAA) preempts an interpretation of California law that prohibits enforcement of individual arbitration agreements under California’s Private Attorneys General Act (PAGA). As a result of the High Court’s ruling, an employee who has entered into a valid arbitration agreement to resolve his or her complaints does not have standing to bring a PAGA lawsuit on behalf of other employees.
While the opinion in Viking River Cruises, Inc. v. Moriana is specific to PAGA claims, it does illustrate the Supreme Court’s ongoing endorsement of arbitration as an alternative to court litigation wherever arbitration can be legally applied. We should also note that this is not the first time that the High Court has reversed an interpretation of California law by the state courts that frowns on arbitration.
Members of the Center for Workplace Compliance (CWC) can read more here.