A U.S. Supreme Court decision recently weakened a unique California law allowing workers to join and sue their employer over labor law violations. However, the California State Supreme Court is considering reviving the law in a suit by another Uber driver in Adolph v. Uber Technologies.

The Case: Adolph v. Uber Technologies

The Court: Alameda County Superior Court

The Case No.: S274671

What is the PAGA:

The PAGA (Private Attorneys General Act) was enacted in 2004 to allow employees to sue their employers, individually or collectively, in the state's name for violating employment laws like those governing minimum wages, overtime, and meal and rest breaks. Successful PAGA suits result in the employees collecting 25% of the penalties provided by labor law, with the rest going to the state. Previously, PAGA allowed workers to sidestep standard provisions in employment contracts requiring all disputes to be heard individually by private arbitrators instead of the court. Limiting employee disputes to private arbitrators severely limits their opportunity for resolution, as arbitrators' decisions are virtually unappealable. According to studies, arbitrators usually favor employers, who are their regular customers.

How Was the PAGA Weakened by the U.S. Supreme Court?

On June 15th, however, the nation's high court, the U.S. Supreme Court, ruled that California's PAGA violates employers' right under federal law to take disputes to arbitration when doing so is a requirement included in the work contract. The nation's high court argued that when the contract is signed by both the employer and the employee, allowing an employee to take the issue to court circumscribes the freedom of parties to determine which issues are subject to arbitration and what rules apply to the arbitration.

How the California Supreme Court Could Restore the PAGA's Power:

However, the California Supreme Court is the highest authority on the meaning of California state law. And the California State Court will decide whether PAGA allows workers who have consented to take their disputes to arbitration, to file labor-law claims for other workers in the name of California state. (Justice Sonia Sotomayor suggested the alternative in a separate opinion in the same Supreme Court case). Proponents of PAGA are confident the court will allow workers forced into arbitration to maintain PAGA claims for their coworkers, turning to California court's unanimous 2020 ruling allowing an employee to proceed with a PAGA suit even after his employer had settled his individual claims as a basis for their argument. However, as a backup, state lawmakers are discussing a potential amendment to PAGA to authorize employees to sue on behalf of other workers. Uber and others who do not support PAGA insist that the court will surely consider the recent U.S. Supreme Court decision and require the dismissal of any suit of this type that reaches the court.

If you have questions about how to file a California employment law complaint, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.