The California Private Attorneys General Act (PAGA) Gets the SCOTUS Treatment – Opinion

EDITOR’S NOTE: Jennifer Oliver O’Connell was asked to do coverage for the California Business and Industrial Alliance (CABIA) on their Rally at the Supreme Court on Wednesday, March 30th, in support of oral arguments on Viking River Cruises, Inc. v. Moriana. CABIA submitted an amicus brief supporting the petitioner on February 7, 2022.

Founded in 2007, the California Business and Industrial Alliance (CABIA) is a trade organization that seeks to fix California’s Private Attorneys General Act (PAGA). What is CABIA, or any California franchisee or business concerned about these issues? Because PAGA has been used as a blunt instrument to bludgeon small business, taking countless hours away from the business owner’s management of their company, costing them millions of dollars in attorneys fees, administrative “fixes,” and payouts, and squelching the employer’s ability to hire quality staff and manage their workforce and workforce relations as they see fit.

The most egregious use of PAGA by lawyers to gain their wealth is when they circumvent any arbitration agreements between employees and employers. California employees have filed suit against their employers using PAGA, even though they had these agreements.

This is the case Viking River Cruises, Inc. v. MorianaTo cut down on PAGA, the question is whether the Federal Arbitration Act or any other decisions to support it can be used for enforcement of these agreements. This will also prevent employees from making representative claims under PAGA.

The OnLabor Blog:

Oral arguments will be heard by the Supreme Court on March 30. Viking River Cruises, Inc. v. Moriana. The case focuses on whether California employers can force employees to waive their right to bring claims under the Private Attorney Generals Act, which allows California workers to sue their employers on behalf of the state for employment law violations. If the Supreme Court holds that courts must enforce employers’ attempts to bar PAGA claims, it will strip many workers who sign arbitration agreements of the ability to seek recourse for employment violations.

On March 2, plaintiff Angie Moriana filed a reply brief with the Supreme Court, arguing that the Court should not enforce employers’ efforts to bar employees’ PAGA claims. In her brief, Moriana argues that PAGA claims are not subject to contractual forfeiture because “California law prohibits contractual waivers of statutory protections enacted for public reasons,” and the Federal Arbitration Act does not preempt this.

Moriana has noted that her employment agreement, which she had with Viking River Cruises, didn’t require that she arbitrate PAGA claim claims. It included a waiver that PAGA claims could be brought in any other forum. She argues that nothing in the FAA’s text requires that courts enforce such comprehensive waivers of particular claims. The FAA is focused on “agreements to settle a controversy by arbitration,” not “agreements to strip contracting parties of the right to pursue state public-policy claims in all forums.”

Tuesday, just before the SCOTUS oral defenses in this case, was an informal gathering attended by business owners, whom CABIA supports and guides. I flew into Washington, D.C., for the Rally. As I heard the stories from employees who were with their company for less than 2 months, some even went on to say that they had lost their jobs. It takes two weeksThey filed frivolous PAGA lawsuits against them. They were unable to continue their businesses after this incident, which caused them severe financial losses.

CABIA hosts an informal meeting of CA Business owners, supporters and advocates ahead of the SCOTUS arguments. (Credit to Tom Manzo).

Pedro Gallegos was warned by the San Diego Police Department that he is a co-franchisee with Two Men and a Truck Movers.

“PAGA is a rite of passage for small business.”

It shouldn’t be. We hope that the oral arguments in front of SCOTUS will result in a favorable decision for the petitioners. This could be the solution to PAGA’s problems and help California workers.

More to come….

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