Sixth District Reverses Arbitration Order as to PAGA Claims
In a putative class action, the Sixth District held that an arbitration agreement cannot be enforced against PAGA claims. Brown v. Superior Court (Morgan Tire & Auto, LLC), No. H037271, __ Cal. App. 4th __ (6th Dist. June 4, 2013).
The question presented in this case is whether the Federal Arbitration Act (9 U.S.C. §§ 1-16) (FAA) permits arbitration agreements to override the statutory right to bring representative claims under the Labor Code Private Attorneys General Act of 2004 (PAGA). (Lab. Code, § 2698 et seq.) We conclude that the FAA does not demand enforcement of such an agreement. A plaintiff suing for PAGA civil penalties is suing as a proxy for the State. A PAGA claim is necessarily a representative action intended to advance a predominately public purpose. When applied to the PAGA, a private agreement purporting to waive the right to take representative action is unenforceable because it wholly precludes the exercise of this unwaivable statutory right. AT&T Mobility LLC v. Concepcion (2011) 131 S.Ct. 1740 (Concepcion) does not require otherwise.
Slip Op. at 1-2.