Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 187 conflicting rights and interests of the FAA and NLRA, the FAA wins. Rather, Epic suggests that there may not be any Section 7 right to pursue a collective or class action in the first place.915 There are a few instances, however, where class action waivers still would not apply. For instance, the FAA by its terms does not apply to certain employees, most notably transportation workers.916 Furthermore, agency-initiated actions by their nature are beyond the FAA’s scope. Thus, the Department of Labor and the Equal Employment Opportunity Commission are free to pursue relief under the statutes they enforce on behalf of groups of employees, regardless of whether those employees have entered into arbitration agreements containing class waivers. Additionally, the California Supreme Court’s ruling in Iskanian v. CLS Transportation Los Angeles, LLC917 that the right to pursue representative actions under the Private Attorneys General Act (“PAGA”) cannot be waived still remains good law.918 C. The Supreme Court Holds That Class Arbitration Must Be Expressly Agreed Upon In Lamps Plus, Inc. v. Varela, the U.S. Supreme Court ruled that arbitration proceedings may be conducted on a class basis only where there is an express agreement between the parties that authorizes class proceedings.919 Relying on its past decisions in Stolt-Nielsen, Concepcion, and Epic Systems, the Court made clear that class arbitration “fundamentally changes” the nature of “traditional individualized arbitration” envisioned by the Federal Arbitration Act in several ways, including making the process slower, more costly, and “more likely to generate procedural morass than final judgment.”920 In so ruling, the Court rejected the basis of the Ninth Circuit’s contrary ruling, which had found the arbitration agreement at issue to be ambiguous and, applying California state contract law that contractual ambiguities should be construed against the drafter, held that the agreement allowed for class arbitration. Relying on its prior class action arbitration decisions, the Court found that such an approach is “flatly inconsistent with the ‘foundational FAA principle that arbitration is a matter of consent.’”921 915 Id. at 1624-32. 916 See Rittman v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020) (Amazon delivery drivers held exempt from FAA pursuant to transportation worker exemption). 917 59 Cal. 4th 348 (2014). 918 See, e.g., Olson v. Lyft, 56 Cal. App. 5th 862 (2020) (holding that Epic Systems did not overrule Iskanian’s determination that PAGA claims cannot be compelled to arbitration). However, after denying multiple requests over the years, in December 2021 the U.S. Supreme Court granted certiorari in Viking River Cruises, Inc. v. Moriana, No. 20-1573 (Dec. 15, 2021) to decide whether the FAA requires enforcement of an arbitration agreement which provides that an employee cannot raise representative claims, including under PAGA. 919 139 S. Ct. 1407 (2019). 920 Id. at 1412. 921 Id. at 1418.
RkJQdWJsaXNoZXIy OTkwMTQ4