Wage and Hour Case Notes

• Jurisdiction: California,United States,Federal
• Author: Lauren Teukolsky
• Citation: Vol. 37 No. 4
• Publication year: 2023

WAGE AND HOUR CASE NOTES

AUTHOR^*

Lauren Teukolsky

PAGA PLAINTIFF DOES NOT LOSE STANDING TO PURSUE PAGA CLAIM ON BEHALF OF OTHERS ONCE THE INDIVIDUAL COMPONENT OF HER PAGA CLAIM IS SENT TO ARBITRATION

Galarsa v. Dolgen California, LLC, 88 Cal. App. 5th 639 (2023), as modified on denial of reh'g (Feb. 24, 2023), review filed (Mar. 13, 2023)

In Galarsa, the Court of Appeal analyzed the United States Supreme Court's decision in Viking River Cruises, Inc. v. Moriana, 142 S.Ct. 1906 (2022), to determine how to apply it in the case before it. As the Galarsa Court recounted, in Viking River, the U.S. Supreme Court held that employers may not use arbitration agreements to require employees to waive their right to bring claims under California's Private Attorneys General Act (PAGA), affirming the primary rule announced in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014).

However, employers are permitted to require a PAGA claim to be split into an individual component (based on Labor Code violations the plaintiff personally suffered) and a non-individual component (based on Labor Code violations suffered by others), and can further require the individual component to proceed in arbitration. To the extent Iskanian prohibited splitting a PAGA claim in this manner, it is preempted by the Federal Arbitration Act.

In Part IV of Viking, the Court held that once the individual component of a PAGA claim is sent to arbitration, the plaintiff loses standing to pursue the PAGA claim on behalf of others, and the claim must be dismissed. Part IV was based entirely on state law and did not involve any federal questions. In concurrence, Justice Sotomayor said that if the Court's interpretation of PAGA standing was incorrect, California courts would have the "last word."

Turning back to the case before it, the Court of Appeal in Galarsa took up Justice Sotomayor's invitation. It is the first post-Viking published opinion by a California Court of Appeals to hold that the Supreme Court's interpretation of PAGA standing is wrong. Galarsa holds that a PAGA plaintiff does not lose standing to pursue the PAGA claim on behalf of others (which the Court calls "Type O") when the individual component of the PAGA claim ("Type A") is sent to arbitration.

To reach its conclusion, the Galarsa Court relied on Kim v. Reins Int'l. California, Inc., 9 Cal. 5th 73 (2020), which held that a PAGA plaintiff whose individual Labor Code claims were settled, and who was arguably no longer an "aggrieved employee," nonetheless maintained standing to bring a PAGA claim on behalf of others. Per Kim, only two factual predicates must be satisfied for PAGA standing: (1) the plaintiff was an...