Court of Appeal holds that questions of the viability of PAGA claims, which are not subject to arbitration, are for the Court and not the arbitrator

2021 case review: Contreras v. Superior Court

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In Contreras v. Superior Court the Court was called upon to decide whether the determination of Plaintiff’s standing to pursue Public Attorney General Act (often called “PAGA”) claims was for an arbitrator or the court. PAGA claims, brought by an aggrieved employee, are not subject to arbitration per California law. So the Court was ultimately deciding whether the arbitrator had the authority to determine his own authority to decide the matter. The defendant was a transportation service with an app that required the drivers to agree to terms of service when logging in for the first time. The agreement included an arbitration provision with a class action waiver. The plaintiffs, who were former drivers through the app, filed a PAGA suit against the defendant, alleging misclassification as independent contractors. The trial court granted the defendant’s motion to compel arbitration.

The appellate court reversed, affirming that the Federal Arbitration Act does not apply to PAGA claims because the state of California would have to consent to the arbitration of the claims and has not done so. The Court held that the determination of the viability of the PAGA claims and whether the action was subject to arbitration was a decision for the court, not the arbitrator. The court made clear it was in good company in holding that PAGA claims were not subject to arbitration, writing that “[w]e agree with the chorus that in California, a PAGA plaintiff may not be compelled to arbitrate whether he or she is an aggrieved employee.”