Judge: Ronald F. Frank, Case: 22TRCV00322, Date: 2023-01-25 Tentative Ruling

Case Number: 22TRCV00322    Hearing Date: January 25, 2023    Dept: 8

Tentative Ruling

HEARING DATE:                 January 25, 2023 

CASE NUMBER:                  22TRCV00302

CASE NAME:                        Xavier Chora, individually, and on behalf of aggrieved employees pursuant to the Private Attorneys General Act (“PAGA”) v. Controlled Contamination Services, LLC, et al.

MOVING PARTY:                Defendants, Controlled Contamination Services, LLC

RESPONDING PARTY:       Plaintiff, Xavier Chora

TRIAL DATE:                        None Set.

MOTION:                               (1) Motion to Compel Arbitration

Tentative Ruling:                    (1) Motion to Compel Arbitration is GRANTED as to Plaintiff’s individual PAGA claims. However, Plaintiff’s representative claims are STAYED pending California Supreme Court’s ruling in Adolph and resolution of the individual claim in arbitration.

I. BACKGROUND 

A. Factual 

¿ 

On April 27, 2022, Plaintiff, Xavier Chora, individually, and on behalf of aggrieved employees (“Plaintiff”) filed a Complaint against Controlled Contamination Services, LLC (“Defendant”) for Civil Penalties for violation of labor code § 2698 et seq.. The complaint is based on claims that Defendant failed to pay minimum and overtime wages, failed to provide meal periods and rest breaks, failed to timely pay wages during employment, failed to timely pay wages upon termination, failed to provide complete and accurate wage statements, and failed to reimburse business expenses.

Defendant asserts that Plaintiff’s employment with CCS began on March 7, 2019 and ended on February 1, 2021. (Declaration of Robin Fiddes (“Fiddes Decl.”) ¶3.) Defendant notes that on March 7, 2019, Plaintiff went through CCS’s onboarding process for a new employee. (Id. at ¶ 7.) Defendant claims that as part of this process, Plaintiff was provided Defendant’s ADR Policy, which he electronically signed on March 7, 2019. (Id. at ¶¶ 6,7.) The ADR Policy specifically provided the following:

This Policy is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. and

evidences a transaction involving commerce. This Policy applies to any dispute

arising out of or related to Employee's employment with Controlled Contamination

Services or one of its affiliates, subsidiaries or parent companies (“Company”) or

termination of employment. Except as otherwise provided in this Policy, this Policy

applies to any dispute that Company may have against Employee or that Employee

may have against: (1) Company; (2) its officers, directors, principals, shareholders,

members, owners, employees, or agents; (3) Company’s benefit plans or the plan’s

sponsors, fiduciaries, administrators, affiliates, or agents; and (4) all successors and

assigns of any of them.

(Id. at Ex. A at pp.1, 4). Defendant contends that the ADR Policy further provides that:

The Policy also applies, without limitation, to disputes arising out of or relating to

the employment relationship, trade secrets, unfair competition, compensation,

breaks and rest periods, termination, or harassment and claims arising under the

Uniform Trade Secrets Act, Civil Rights Act of 1964, Americans With Disabilities

Act, Age Discrimination in Employment Act, Family Medical Leave Act, Fair

Labor Standards Act, Employee Retirement Income Security Act (except for claims

for employee benefits under any benefit plan sponsored by the Company and

covered by the Employee Retirement Income Security Act of 1974 or funded by

insurance), Affordable Care Act, Genetic Information Non-Discrimination Act,

and state statutes, if any, addressing the same or similar subject matters, and all

other federal or state statutory and common law claims.

(Ibid.) Furthermore, Defendant asserts that the ADR Policy expressly provides that:

• A neutral arbitrator “shall be selected by mutual agreement between the

Company and the Employee” or following application “to a court of

competent jurisdiction with authority over the location where the arbitration

will be conducted,” (Id. at p.1, §3, p.4 §2)

• “In arbitration, the parties will have the right to conduct adequate civil

discovery, bring dispositive motions, and present witnesses and evidence as

needed to present their cases and defenses, and any disputes in this regard

shall be resolved by the Arbitrator,” (Id. at p.2, §5, p.5, §4)

• “The Arbitrator may award any party any remedy to which that party is

entitled under applicable law, but such remedies shall be limited to those

that would be available to a party in his or her individual capacity in a court

of law for the claims presented to and decided by the Arbitrator, and no

remedies that otherwise would be available to an individual in a court of law will be forfeited by virtue of this Policy,” (Id. at p.3, §6, p.6, §6)

• “The Arbitrator will issue a decision or award in writing, stating the essential findings of fact and conclusions of law.,” (Id.) and

• “[T]he Company will pay the Arbitrator’s and arbitration fees.”  (Id. at p.3, §6, p.6, §5)

Defendant further notes that Plaintiff did not elect to opt out of the ADR policy. Defendant claims there was an opt-out section, which permitted an employee to opt out and not be subject to that policy. Defendant contends that ADR policy provides the following:

If an employee wants to opt out he or she must notify the Company of the intention

to opt out by submitting a signed and dated statement on a “Dispute Resolution Policy

Opt Out Form” that can be obtained from and returned to the Company’s Human

Resources Department or by submitting to that Department a written statement signed

and dated by Employee (and containing Employee’s Company Identification

Number) stating that Employee is opting out of this Policy. In order to be effective,

the opt out notice must be provided within 30 days of Employee’s receipt of this

Policy.

(Id. at p. 3, §7.) Defendant notes that it never received an opt out form from Plaintiff. (Fiddes Decl., ¶ 8). Defendant now argues that by failing to opt out of the ADR Policy and continuing his employment beyond the 30-day period, Plaintiff manifested his acceptance of the terms of the ADR Policy. (Id. at Exhibit A at p.3, §8, p.6, §7.)

Lastly, Defendant puts forth that the ADR policy contained a clear, enforceable waiver of Plaintiff’s representative PAGA claim thereby requiring arbitration on an individual claim. Defendant contends that the ADR Policy also contains a clear waiver for class, collective, and representative actions. (Fiddes Decl., ¶ 7, Ex. A at p.2, §5, p.5, §4.) In particular, Defendant claims it states that “the Employee and the Company agree to bring any dispute in arbitration on an individual basis only, and not on a class, collective, or private attorney general basis.” (Id.) Defendant further notes, that with respect to representative actions, the ADR Policy specifically provides:

There will be no right or authority for any dispute to be brought, heard or arbitrated as a private attorney general action (“Private Attorney General Waiver”). The Private Attorney General Waiver does not apply to any claim you bring in arbitration as a private attorney general solely either on your own behalf or not on behalf of or regarding others.

(Id. at p.2 §5(c),p.5, §4(c).)

Defendant now filed this Motion to Compel Arbitration based on the above policy.

B. Procedural 

¿ 

             On September 28, 2022, Defendant filed this Motion to Compel Arbitration. On October 7, 2022, Plaintiff filed an opposition. On October 13, 2022, Defendant filed a reply brief.

II.  REQUEST FOR JUDICIAL NOTICE

Plaintiff requested this Court take judicial notice of nine (9) attachments. The requested documents for this court to take notice of are as follows:

1) Attached hereto as Exhibit 1 is a true and correct copy of the trial court’s order in

Derek Simmons v. Robert Half International, Inc., et al. (Case No. 22CV007918),

currently pending in Department 512 of the Alameda County Superior before the

Honorable Eumi Lee;

2) Attached hereto as Exhibit 2 is a true and correct copy of the trial court’s order in

Taylor v. In-N-Out Burgers (Case No. 21STCV18259), currently pending in

Department 52 of the Los Angeles County Superior before the Honorable Armen

Tamzarian;

3) Attached hereto as Exhibit 3 is a true and correct copy of the trial court’s order in

Maldonado v. FS Hotels LA, Inc. (Case No. 20STCV13849), currently pending in

Department 34 of the Los Angeles County Superior before the Honorable Michael

Paul Linfield;

4) Attached hereto as Exhibit 4 is a true and correct copy of the trial court’s order in

Gozzi v. Acadia Malibu, Inc. (Case No. 19STCV39861), currently pending in

Department 32 of the Los Angeles County Superior before the Honorable Daniel S.

Murphy;

5) Attached hereto as Exhibit 5 is a true and correct copy of the trial court’s order in

Singh v. West Covina Motor Group, LLC (Case No. 21STCV41713), currently

pending in Department 58 of the Los Angeles County Superior before the Honorable

Bruce G. Iwasaki;

6) Attached hereto as Exhibit 6 is a true and correct copy of the trial court’s order in

Adams v Pacific Villa, Inc., et al. (Case No. 20STCV37260), currently pending in

Department 20 of the Los Angeles County Superior Court before the Honorable

Kevin C. Brazile; and

7) Attached hereto as Exhibit 7 is a true and correct copy of the trial court’s order in

Mendoza v Laguna Cookie Company, Inc. (Case No. 30-2019-01107762-CU-OECXC), currently pending in Department CX104 of the Orange County Superior

Court, before the Honorable William Claster.

8) Attached hereto as Exhibit 8 is a true and correct copy of the trial court’s order in

Billy Grigsby v. West Coast Sand And Gravel, Inc., et al. (Case No. CV-21-005742),

currently pending in Department 24 of the County of Stanislaus, before the

Honorable Sonny S. Sandhu.

9) Attached hereto as Exhibit 9 is a true and correct copy of Court of Appeals order in

Eleni Gavriilogloi v Prime Healthcare Management, Inc., et al., (Court of Appeals

Case No. CIVDS1709515), Fourth Appellate District, before the Honorable

Ramirez, Slough, and Fields.  The Court notes that the Fourth District certified its decision for partial publication, which is now citable as 83 Cal.App.5^th 595. 

            Pursuant to California Evidence Code §§ 451, 452, and 453, this Court GRANTS Plaintiff’s request and takes judicial notice of the above. However, the Court is mindful that the Rules of Court eschew citation to unpublished appellate court decision, much less trial court decisions, unless they fit within the exceptions of Rule of Court 8.1115(b).  Moreover, published appellate decisions that precede Viking River are now on dubious footing in light of the SCOTUS decision that expressly addresses federal preemption.     

III. EVIDENTIARY OBJECTIONS

Plaintiff’s Objections to Defendant’s Evidence:

Sustain: None.

Overrule: 1-7.

ANALYSIS 

A. Legal Standard 

The Federal Arbitration Act (“FAA”) states that “[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (9 U.S.C. § 2.) California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-72.)

California law states that “[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….” (Code Civ. Proc, § 1281.2.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

Pursuant to Code of Civil Procedure §1281.2, generally, on a petition to compel arbitration, the court must grant the petition unless it finds either (1) no written agreement to arbitrate exists; (2)¿the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting¿rulings on common issues. 

When seeking to compel arbitration, the initial burden lies with the moving party to demonstrate the existence of a valid arbitration agreement by preponderance of evidence.  (Ruiz v. Moss Bros. Auto Group (2014) 232 Cal.App.4th 836, 841-42; Gamboa v. Northeast Community Clinic (2021), 72 Cal.App.5th 158, 164-65.)  It is sufficient for the moving party to produce a copy of the arbitration agreement or set forth the agreement’s provisions.  (Gamboa, 72 Cal.App.5th at 165.)  The burden then shifts to the opposing party to prove by a preponderance of evidence any defense to enforcement of the contract or the arbitration clause.  (Ruiz, 232 Cal.App.4th at 842; Gamboa, 72 Cal.App.5th at 165.)  Subsequently, the moving party must establish with the preponderance of admissible evidence a valid arbitration agreement between the parties.  (Ibid.)  The trial court then weighs all the evidence submitted and uses its discretion to make a final determination.  (Ibid.)  “California law, ‘like [federal law], reflects a strong policy favoring arbitration agreements and requires close judicial scrutiny of waiver claims.’”  (Wagner Const. Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 31.) 

If the court orders arbitration, then the court shall stay the action until arbitration is completed.  (See Code Civ. Proc., § 1281.4.) 

B. Discussion

Existence of Valid Arbitration Agreement  

¿ 

Defendant notes that the ADR Policy, by its specific terms, is governed by the Federal Arbitration Act (“FAA”). (Fiddes Decl., ¶ 7, Ex. A, p. 1, 4) Defendant further argues that the ADR Policy is enforceable under the FAA. As such, Defendant puts forth that that Plaintiff entered into a valid and enforceable arbitration agreement. First, Defendant notes that all parties were capable of contracting. Second, Defendant asserts there was mutual assent, noting that Plaintiff expressly agreed to binding arbitration when he affixed his electronic signature to the ADR policy at the time of his hire, and by continuing to be employed with Defendant after signing the ADR policy, further manifesting his agreement to be bound. (Fiddes Decl., ¶¶ 4-7, Ex. B; ¶ 8.) Third, Defendant argues that the ADR policy has a lawful objective, that is, the resolution of disputes through binding arbitration. Lastly, Defendant contends that the ADR Policy is supported by sufficient consideration.

Unconscionability

In response, Plaintiff argues that the arbitration agreement is both procedurally and substantively unconscionable.

The doctrine of unconscionability refers to “an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.”¿¿(Sonic-Calabasas A, Inc. v. Moreno (2013)¿57 Cal.4th 1109, 1133.) It consists of procedural and substantive components, “the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.”¿¿(Id.) Although both components of unconscionability must be present to invalidate an arbitration agreement, they need not be present in the same degree.¿(Armendariz v. Found. Health¿Psychcare¿Servs., Inc. (2000)¿24 Cal.4th 83, 114 (abrogated in-part on other grounds by¿Concepcion, 563 U.S. 333).)¿¿¿¿¿ 

¿ 

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.¿ [Citations.]¿ In other words, the more substantively unconscionable the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.”¿¿(Id.) “The party resisting arbitration bears the burden of proving unconscionability.”¿(Pinnacle Museum Tower¿Ass’n¿v. Pinnacle Market Dev.,¿55 Cal.4th 223, 247.)¿¿¿ 

1.                  Requirements under Armendariz 

The Supreme Court of California has held that, in addition to unconscionability, an arbitration agreement has to meet five additional minimum requirements: (1) ensuring that the employee does not bear any costs above that which he or she would have to pay in court; (2) providing for adequate discovery; (3) providing for all types of relief that would otherwise be available in a non-arbitration forum; (4) requiring a written arbitration award and adequate judicial review; and (5) providing for a neutral arbitrator. (Armendariz, at 103–13.) 

Here, the arbitration agreement meets each of the additional requirements under Armendariz. First, the company shall cover the arbitrator and administrative fee, which are the costs of the arbitration. (Fiddes Decl., ¶ 6-7, Ex. A, p. 3 §6, p. 6, § 5).) Second, it allows all reasonable discovery provided by law, with that determination to be made by the arbitrator. (Id. at p.2, §5, p.5, §4) Third, the arbitrator has the authority to provide any relief available in a court of law or equity. (Id. at p.3, §6, p.6, §6) Fourth, the arbitration decision shall be in writing and set for findings of fact and conclusions of law. (Ibid.) Finally, the ADR Policy provides that a neutral arbitrator “shall be selected by mutual agreement between the Company and the Employee” or following application “to a court of competent jurisdiction with authority over the location where the arbitration will be conducted.” (Id. at p.1, §3, p.4 §2) 

2.                  Procedural Unconscionability¿¿ 

¿¿ 

Procedural unconscionability “pertains to the making of the agreement.”¿ (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 795.)¿ Procedural unconscionability “focuses on two factors: ‘oppression’ and ‘surprise.’ ‘Oppression’ arises from an inequality of bargaining power which results in no real negotiation and ‘an absence of meaningful choice.’ ‘Surprise’ involves the extent to which the supposedly agreed-upon terms of the bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disputed terms.”¿ (Zullo v. Superior Court (2011) 197 Cal.App.4th 477, 484.)¿¿ 

¿ 

A contract of adhesion typically denotes a standardized contract imposed and drafted by the party of superior bargaining strength which relegates to the subscribing party only the opportunity to adhere to the contract or reject it. (Armendariz, supra, 24 Cal.4th at 113.)¿ The adhesive nature of a contract is one factor that the courts may consider in determining the degree of procedural unconscionability.¿ (Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 84 fn.4.)¿¿ 

            In his opposition brief, Plaintiff argues that the Arbitration Agreement was unconscionable because it deprived Plaintiff of a meaningful opportunity to negotiate the Arbitration Agreement as it was presented as a condition of employment. In its reply brief, Defendant asserts that Plaintiff’s contention that the ADR Policy was provided on a “take it or leave it” basis is false. Plaintiff claims that the “arbitration agreement does not contain an “opt-out” provision. However, Defendant asserts that the agreement clearly offered an opt out agreement, including a stand-alone section entitled “An Employee’s Right to Opt Out of Arbitration” which Defendant claims outlines in detain the steps an employee must take to opt out of the ADR Policy.” (Fiddes Decl., Ex. A, p. 3, §7.)

¿¿ 

            There is thus a factual dispute between the parties over the existence of the opt-out provision.  Defendant has carried its burden of proof on this factual dispute which in the Court’s view dramatically reduces the procedural unconscionability of what is otherwise a contract of adhesion.  By giving the employee time and two alternative mechanism of advising her or his new employer of intention to opt out of mandatory arbitration, the lack of bargaining over the arbitration provision is minimized.  Thus, the Court finds that the arbitration agreement is procedurally unconscionable but only to a slight degree.

¿ 

2.                  Substantive Unconscionability¿¿ 

¿ 

An agreement is substantively unconscionable if it imposes terms that are “overly harsh,” “unduly oppressive,” “unreasonably favorable,” or “so one-sided as to ‘shock the conscience.’”¿ (Sanchez v. Valencia Holding Co., LLC¿(2015) 61 Cal.4th 899, 910-911¿(Sanchez).)¿ “All of¿these formulations point to the central idea that unconscionability doctrine is concerned not with ‘a simple old-fashioned bad bargain’ [citation], but with terms that are ‘unreasonably favorable to the more powerful party.’ [Citation.]”¿ (Id. at p. 911.)¿ “These include ‘terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, fine-print terms, or provisions that seek to negate the reasonable expectations of the¿nondrafting¿party, or unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.’ ”¿ (Id. at p. 911.)¿¿ 

Here, Plaintiff argues that the arbitration agreement is substantively unconscionable. Plaintiff’s grounds for this argument are that the Defendant’s agreement contain a number of terms aimed at favoring the employer including: (1) depriving Plaintiff of Standing to bring PAGA claims; and (2) the policy failing to designate what rules apply.

First, Plaintiff asserts that it is well-settled that provisions which carve out an employee’s ability to bring a collective PAGA action are impermissible under California law. (citing to Armendariz, supra, 24 Cal.4th 83.) Including such a provision in an arbitration agreement is evidence of substantive unconscionability, and “it is irrelevant that [the employee] ha[s] not brought a PAGA action.” (Najarro v. Superior Court, (2021) 70 Cal. App. 5th 871, 883; see also Subcontracting Concepts (CT), LLC v. De Melo, (2019) 34 Cal.App.5th 201, 212) (noting, in finding that PAGA waiver demonstrated substantive unconscionability, that the “question in determining unconscionability … does not involve comparing the terms of the arbitration clause with the nonarbitration claims” being pursued). Based on this, Plaintiff argues that the Agreement’s inclusion of a collective PAGA waiver forcing Plaintiff to sever his individual PAGA claims from his ability to represent other aggrieved employees is substantively unconscionable.

In reply, Defendant argues that this argument is unsupported and rely upon cases like Iskanian, which were rejected by the United States Supreme Court in Viking River to the extent it prohibits arbitration of an employee’s individual PAGA claims separate and apart from the nonindividual claims they allege on behalf of other allegedly aggrieved employees. (Viking River, 142 S.Ct. at 1924.) 

Second, Plaintiff assets that the element of surprise is clear when a contracting party is not aware of the terms to which they supposedly consent. Plaintiff cites to Carbajal, where the court noted that defendant failed to explain “how requiring an employee to sign an arbitration agreement without disclosing all of its terms does not amount to both oppression and surprise.” (Carbajal, 245 Cal. App. 4th at 246.) Plaintiff argues that Defendant failed to provide a copy of the applicable arbitration rules, whatever they were supposed to be, to Plaintiff, which amounted to procedural unconscionability. In reply, Defendant does not deny this argument, but instead, argues that a failure to designate the arbitration rules, alone, does not prevent enforcement of the parties’ agreement. (Baltazar v. Forever 21, Inc., 62 Cal. 4th 1237, 1246 (2016) (where the challenge is not to unconscionability of particular element of the underlying arbitration rules, but instead based on a “failure to attach” rules, enforcement is not unconscionable).)

Based on the foregoing, the Court finds that the arbitration agreement exhibits a moderate degree of substantive unconscionability. The Court finds that the arbitration agreement is not permeated by unconscionability.  The slight degree of procedural unconscionability and moderate degree of substantive unconscionability are not enough to invalidate the arbitration agreement.

Plaintiff’s Standing to Assert a Representative PAGA Claim

Here, the parties dispute the applicability of Viking River. Defendant asserts that Plaintiff’s individual PAGA claims are arbitrable under the FAA and in light of the Supreme Court’s decision in Viking River. Defendant also asserts that the FAA preempts all conflicting state law intended to frustrate the purpose of the FAA (e.g., laws that apply stricter requirements to arbitration agreements than contracts generally). (Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906, 1917; Preston v. Ferrer (2008) 552 U.S. 346, 353 (“The FAA’s displacement of conflicting state law is now well-established, and has been repeatedly reaffirmed”); Perry v. Thomas (1987) 482 U.S. 483, 492-93, fn. 9).) Based on Viking River, Defendant asserts that: (1)  Plaintiff’s individual PAGA claim be split from his representative PAGA claim and compelled to arbitration; and (2) that Viking River compels the grant of individual arbitration of Plaintiff’s PAGA claim.

In opposition, Plaintiff asserts that Stare Decisis obligates this Court to follow California Law. Plaintiff relies on the California Supreme Court case Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, where the Court held that employment agreements that compelled the waiver of an employee’s right to bring representative PAGA claims in a judicial or arbitral forum were impermissible and unenforceable, and also invalidated arbitration agreements that purported to require separate arbitration or litigation of individual PAGA claims and non-individual, i.e., representative, PAGA claims. (Id. at 383-384.) 

However, the United States Supreme Court case Viking River preempts Iskanian’s indivisibility rule insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. (Viking River, supra, 142 S.Ct. at 1924.)  If an arbitration agreement contains a “waiver of PAGA claims” and a severability clause, then the employer is “entitled to enforce the agreement insofar as it mandate[s] arbitration of [the employee’s] individual PAGA claim.” (Viking River, supra, 142 S.Ct.. at 1925.) Under Iskanian, arbitration of the individual claims would be precluded, but now under Viking River, the claims are severable.  

The United States Supreme Court in Viking River held that a plaintiff loses standing to assert a representative PAGA claim once plaintiff’s own individual claims are compelled to arbitration. (Viking River, supra, 142 S.Ct. at p. 1925.) However, the California Supreme Court has held that a plaintiff retains standing even after their individual claims are settled. (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 80.) Only an “aggrieved employee” has standing to sue under PAGA. (Lab. Code, § 2699, subd. (a).) An “aggrieved employee” is defined as someone “who was employed by the alleged violator” and “against whom one or more of the alleged violations was committed.” (Id., subd. (c).) This does not require an employee to actually maintain a claim against the employer to have standing. “The remedy for a Labor Code violation, through settlement or other means, is distinct from the fact of the violation itself.” (Kim, supra, 9 Cal.5th at 84.) “The Legislature defined PAGA standing in terms of violations, not injury. [Plaintiff] became an aggrieved employee, and had PAGA standing, when one or more Labor Code violations were committed against [her]. (See § 2699(c).) Settlement [would] not nullify these violations.” (Ibid.) By the same logic, arbitration of the individual claims would also not nullify those violations. 

The Court notes that the California Supreme Court has granted review in Adolph v. Uber Technologies, Case No. S274671, on July 20, 2022, and on August 1, 2022, set the issue to be briefed as: “Whether an aggrieved employee who has been compelled to arbitrate claims under the Private Attorneys General Act (PAGA) that are ‘premised on Labor Code violations actually sustained by’ the aggrieved employee…maintains statutory standing to pursue ‘PAGA claims arising out of events involving other employees’ in court or in any other forum the parties agree is arbitrable.”¿ 

This Court will defer its ruling only as to the issue of dismissal of the remaining representative claims pending the California Supreme Court’s decision in Adolph.¿If Plaintiff retains standing to assert the representative PAGA claims, those claims are stayed pending the arbitration of the individual claims.  

IV. CONCLUSION

            For the foregoing reasons, this Court GRANTS Defendant’s Motion to Compel Arbitration of Plaintiff’s individual PAGA claims. However, Plaintiff’s representative claims are STAYED pending California Supreme Court’s ruling in Adolph and resolution of arbitration.