Employer Counseling & Litigation Prevention

On January 18^th, the California Supreme Court in Estrada v. Royalty Carpet Mills, Inc. ruled that defendants sued under the Private Attorney General Act (PAGA) may no longer strike unmanageable claims.  PAGA claims are brought by a single plaintiff who acts as a representative of their fellow employees to recover penalties for violations of the labor code.  Because these actions usually involve a large number of employees employers have argued that litigating some claims as to all the affected employees is not manageable and violates their due process rights.  Prior to this decision, there was a split of authority among the appellate courts as to whether manageability was a viable means to strike PAGA claims.  As is often the case, the California Supreme Court resolved this question in favor of employees.

The new paid sick leave requirements for California employers go into effect January 1, 2024.  The increase in paid sick leave that must be provided is the central element of the legislation.  As of January 1^st, employers must:

Today, the United States Supreme Court issued a significant decision allowing the arbitration of claims under the Private Attorney General Act (“PAGA”).  The Court’s decision in Viking River Cruises v. Moriana  provides that employers may now compel an employee’s individual PAGA claims to arbitration.  Under prior California precedent, PAGA claims could not be compelled to arbitration meaning that even with class action waivers, an individual employee could bring PAGA claims on behalf of all aggrieved employees and require a court to determine the outcome. Under the Court’s new standard, the PAGA claims of individual employees can be compelled to arbitration if that employee signed a properly worded arbitration agreement. Importantly, the Court also clarified that once an individual employee’s PAGA claims are compelled to arbitration, that employee loses the ability to seek PAGA penalties on behalf of other employees.  When paired with an enforceable class action waiver, signed arbitration agreements can now require individual employees, and former employees, to arbitrate their individual claims, including PAGA claims, effectively preventing class action treatment of wage and hour claims and preventing PAGA actions on behalf of all aggrieved employees.  In other words, employers would then only be faced with arbitrating the claims of a single employee.  Period.