Iskanian Applies Only to the Man's Bread

Esparza v. KS Indus., LP, No. F072597 (D5 Aug. 2, 2017)

In the Iskanian case, the California Supreme Court held that claims brought under the Labor Code Private Attorney General Act are not arbitrable because, although they are litigated by private parties, the relief sought in them—civil penalties—belongs to the state, which never agreed to arbitrate. That includes PAGA “representative actions,” where an employee can seek penalties arising from her employer’s violations involving other employees. Given the US Supreme Court’s upholding of arbitration clause class action waivers in the Concepcion case, Iskanian has had the effect of pushing a lot of formerly class action employment litigation into the PAGA realm. 

Iskanian Applies to Threshold PAGA Issues Too.

Hernandez v. Ross Stores, Inc., No. E064026 (D4d2 Jan. 3, 2017)

Along the same lines as the recent Tanguilig case, this appeal addresses a motion to compel arbitration over an individual’s PAGA claim. As we’ve discussed many times, in the Iskanian case the Supreme Court held that because PAGA claims essentially belong to the state, they aren’t subject to arbitaration agreements between employer and employee. As the court explains here, that covers the whole claim, including whether plaintiff is an “aggrieved person” under PAGA and thus has standing to sue. There’s no basis to compel that determination to arbitration, even if it is technically predicate to the application of PAGA.

Affirmed.