Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 193 Additionally, sending an employee’s individual PAGA claims to arbitration does not sever those claims from the employee’s representative claims in court. Rather, the PAGA claim remains a single, unitary action that should be subject to the mandatory stay provisions of California Civil Procedure Code section 1281.4.943 Ultimately, Adolph is a nuanced decision that leaves important questions unanswered. For example, the decision does not discuss the potential impact of a decision in arbitration that dismisses the “individual” PAGA claim without a finding that the plaintiff is an “aggrieved employee.” Nevertheless, the Adolph decision affirms that employers are not defenseless in litigating PAGA actions. First, employers can defend against individual PAGA claims in arbitration with the assurance that, if they prevail, the plaintiff will be unable to pursue representative PAGA claims. This should allow employers the ability to demonstrate that the plaintiff is not an “aggrieved employee,” without having to face the burden and expense of responding to overbroad discovery requesting information as to every non-exempt employee. Furthermore, even if the individual defense in arbitration is unsuccessful, employers retain the ability to challenge a plaintiff’s representative claims on substantive or procedural (e.g., manageability) grounds, or both. Second, as noted above, the Court specifically held that ordering an employee’s individual claims to arbitration does not sever a PAGA action. California Code of Civil Procedure section 1281.4 allows trial courts to use their discretion in issuing a stay only as to severable proceedings. Otherwise, a stay is mandatory. Thus, representative PAGA claims should be stayed pending the outcome of individual arbitration. The fight over PAGA claims is far from over, with other important decisions still pending from the California Supreme Court and talk of proposed ballot measures that would make wholesale changes to the PAGA framework. H. Unconscionability Analysis Following Iskanian and Concepcion During the time between the U.S. Supreme Court’s Concepcion decision in 2012 and the California Supreme Court’s Iskanian decision in June 2014, many California courts continued to use unconscionability theories to invalidate arbitration agreements.944 These decisions found that, while the FAA preempted a rule that class action 943 Adolph, 14 Cal.5th at 1125 (“Section 1281.4 does not contemplate that the compelled arbitration of an issue in controversy in the action is a separate action. The statute makes clear that the cause remains one action, parts of which may be stayed pending completion of the arbitration.”). 944 See Natalini v. Import Motors, Inc., 213 Cal. App. 4th 587 (2013); see also Ramirez v. Charter Commc'ns, Inc., 75 Cal. App. 5th 365, 386 (2022), review granted, Ramirez v. Charter Commc'ns, 510 P.3d 404 (Cal. 2022) (finding that reduced limitations period to bring claim, provision granting award of attorneys fees to prevailing party in in moving to compel, lack of mutuality, and limitation on discovery substantively unconscionable); Ali v. Daylight Transport, LLC, 59 Cal. App. 5th 462 (2020) (arbitration agreement found both procedurally unconscionable as contract of adhesion, and substantively unconscionable for shortening statutes of limitation, requiring parties to split arbitration fees, and allowing only the defendant to seek provisional remedies in court); Sabia v. Orange Cnty. Metro Realty, 227 Cal. App. 4th 11 (2014) (finding one-way arbitration clause in favor of employer substantively unconscionable because it “effectively requires plaintiffs to arbitrate their claims while leaving [employer] free to sue in court for any claims it might have”); Carmona v. Lincoln Millennium Car Wash, 226 Cal. App. 4th 74 (2014) (failure to translate portion of arbitration agreement found to be both procedurally unconscionable, and portion of arbitration agreement that permitted only the employer to bring claims in court for breach of confidentiality rendered that portion substantively unconscionable); Samaniego v. Empire Today, LLC, 205 Cal. App. 4th 1138 (2012) (holding that the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion does not prevent courts from rejecting arbitration agreements that the court finds unconscionable). Cf. Davis v. Nordstrom, Inc., 755 F.3d 1089 (9th Cir. 2014) (employer’s unilateral change to arbitration agreement that included a class-action wavier
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