192 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com should be “stayed” pending further clarity and guidance from the California Supreme Court or California Legislature.938 The California Supreme Court recently answered the question and confirmed its departure from Viking River. On July 17, 2023, the Court decided Adolph v. Uber Technologies, Inc.,939 which held that a plaintiff who has been compelled to arbitrate individual PAGA claims nevertheless retains standing to pursue representative PAGA claims on behalf of other employees. “Where a plaintiff has brought a PAGA action comprising individual and nonindividual claims, an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA.”940 The Court in Adolph relied heavily on the legislative purpose of PAGA in reaching its decision, as well as statutory language establishing (in the Court’s view) that a worker achieves PAGA standing “upon sustaining a Labor Code violation committed by his or her employer.” In rejecting Uber’s arguments advocating for a contrary outcome, the Court resolved several other points concerning the litigation of PAGA actions. For example, the Court made clear that the outcome of a PAGA plaintiff’s individual arbitration will be binding on issues of standing to the favor of the prevailing party. If a plaintiff establishes one or more individual Labor Code violations in arbitration, the plaintiff then continues to have standing to litigate his or her non-individual claims in court. If, however, a plaintiff is unable to establish an individual Labor Code violation in arbitration, the plaintiff loses standing and can no longer pursue a representative PAGA claim in court.941 This position is consistent with the California Court of Appeal’s prior ruling in Rocha v. U-Haul Co of California.942 938 See, e.g., Johnson v. Lowe's Home Centers, LLC, 2022 WL 4387796, at *4 (E.D. Cal. Sept. 22, 2022) (granting motion to compel arbitration of individual claims and dismissing remaining non-individual PAGA claims); Radcliff v. San Diego Gas & Elec. Co., 2022 WL 4229305, at *4 (S.D. Cal. Sept. 12, 2022) (granting motion to compel arbitration of individual claims, striking remaining non-individual PAGA claims, and refusing to stay PAGA claims pending Adolph v. Uber Technologies, Inc. decision). But see Shams v. Revature LLC, 2022 WL 3453068, at *3 (N.D. Cal. Aug. 17, 2022) (compelling individual claims to arbitration but refusing to follow Viking River on standing grounds). 939 14 Cal.5th 1104 (2023). 940 Id. at 1114. 941 Id. at 1123-24 (“If the arbitrator determines that Adolph is an aggrieved employee in the process of adjudicating his individual PAGA claim, that determination, if confirmed and reduced to a final judgment (Code Civ. Proc., § 1287.4), would be binding on the court, and Adolph would continue to have standing to litigate his nonindividual claims. If the arbitrator determines that Adolph is not an aggrieved employee and the court confirms that determination and reduces it to a final judgment, the court would give effect to that finding, and Adolph could no longer prosecute his non-individual claims due to lack of standing.”). 942 88 Cal.App.5th 65, 77 (2023) (“[U]nless and until there is a finding on the merits regarding the alleged violation, allegations of a Labor Code violation by an alleged employee or former employee are alone sufficient to establish PAGA standing”). Rocha disagreed with Gavriiloglou v. Prime Healthcare Mgmt., Inc., 83 Cal. App. 5th 595 (2022), which held that a plaintiff who is deemed to have not suffered any violation of the California Labor Code does not lose standing to pursue separate representative action claims under PAGA, despite no longer being an “aggrieved employee.” Adolph approved Rocha, so Gavriiloglou should be deemed abrogated.
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