High court will review arbitration exemption under novel Calif. law - Reuters
A general view of the Supreme Court building in Washington, U.S. October 4, 2021. REUTERS/Jonathan Ernst
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(Reuters) - The U.S. Supreme Court on Wednesday agreed to decide whether California workers who sign arbitration agreements are barred from suing their employers in court on behalf of the state, potentially teeing up a ruling that could curtail employment litigation in the largest U.S. state.
The justices granted certiorari to Viking River Cruises Inc, which says a unique California law that allows workers to step into the state's shoes does not create a loophole to the requirement that arbitration agreements be enforced under the Federal Arbitration Act (FAA). Viking River is represented by former U.S. solicitor general Paul Clement of Kirkland & Ellis.
A Supreme Court ruling in favor of the company would keep many of the thousands of lawsuits accusing California employers of violating wage laws out of court altogether.
More than half of non-union, private-sector workers in the U.S. have signed agreements requiring legal claims to be brought in arbitration, according to the left-leaning Economic Policy Institute.
California's law, the Private Attorney General Act has given many of those workers a way around the FAA, allowing plaintiffs to keep some claims in court even when others are sent to arbitration. PAGA allows workers to sue for violations of wage laws on the state's behalf and keep 25% of any money they win.
The California Supreme Court in the 2014 case Iskanian v. CLS Transportation Los Angeles LLC said that because PAGA plaintiffs are representing the state, employers cannot require those claims to be arbitrated.
Worker advocates and other supporters of PAGA say the law is crucial to protecting workers' rights because state agencies only have the resources to pursue a fraction of cases in which employers engage in wage theft and other violations.
But business groups say PAGA has improperly interfered with parties' agreements to arbitrate, depriving workers and companies of the relative speed and low cost of arbitration.
The U.S. Chamber of Commerce in a June amicus brief urged the Supreme Court to take up Viking River's case, saying the number of PAGA lawsuits has skyrocketed since the Iskanian decision seven years ago.
The U.S. Supreme Court had denied several cert petitions filed by businesses on the PAGA question in recent years. But this year, the justices signaled their interest in the issue by calling for the plaintiffs in Viking River's case and five others to file response briefs.
The case is Viking River Cruises Inc v. Moriana, U.S. Supreme Court, No. 20-1573.
For Viking River: Paul Clement of Kirkland & Ellis
For Moriana: Kevin Barnes of Law Offices of Kevin T. Barnes
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source: https://www.reuters.com/legal/government/high-court-will-review-arbitration-exemption-under-novel-calif-law-2021-12-15/
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