©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 137 114 Id. at 384 (“We conclude that the rule against PAGA waivers does not frustrate the FAA’s objectives because, as explained below, the FAA aims to ensure an efficient forum for the resolution of private disputes, whereas a PAGA action is a dispute between an employer and the state Labor and Workforce Development Agency.”). The Supreme Court held that “where … an employment agreement compels the waiver of representative claims,” the agreement “frustrates the PAGA’s objectives” and “is contrary to public policy and unenforceable as a matter of state law.” Id. As the Ninth Circuit has stated, California’s ban on arbitral waivers of representative actions reflects public policy, rather than substantive unconscionability, Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1264 (9th Cir. 2017). 115 Julian v. Glenair, Inc., 17 Cal. App. 5th 853, 860 (2017) (internal quotation marks and citation omitted) (“an agreement to arbitrate a PAGA claim, entered into before an employee is statutorily authorized to bring such a claim on behalf of the state, is an unenforceable predispute waiver. As any agreement by [the plaintiff employees] was entered into before they were authorized to bring a PAGA claim, the trial court properly denied the petition to compel.”). 116 Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018). 117 Correia v. NB Baker Elec., Inc., 32 Cal. App. 5th 602 (2019) (“Although the Epic court reaffirmed the broad preemptive scope of the [FAA], Epic did not address the specific issues before the Iskanian court involving a claim for civil penalties brought on behalf of the government and the enforceability of an agreement barring a PAGA representative action in any forum. We thus conclude the trial court properly ruled the waiver of representative claims in any forum is unenforceable.”) (emphasis in original) abrogated on other grounds by Barrera v. Apple Am. Grp. LLC, 95 Cal. App. 5th 63 (2023). 118 Brooks v. AmeriHome Mortg. Co., 47 Cal. App. 5th 624, 629 (2020) (plaintiff “cannot be compelled to separately arbitrate whether he was an aggrieved employee”). See also Contreras v. Sup. Court (Zum Servs., Inc.), 61 Cal. App. 5th 461, 477 (Mar. 1, 2021) (“a PAGA plaintiff may not be compelled to arbitrate whether he or she is an aggrieved employee”). 119 Bautista v. Fantasy Activewear, Inc., 52 Cal. App. 5th 650 (2020). 120 Collie v. The Icee Co., 52 Cal. App. 5th 477 (2020). 121 Olson v. Lyft, Inc., 56 Cal. App. 5th 862 (2020). 122 Provost v. YourMechanic, Inc., 55 Cal. App. 5th 982 (2020). 123 Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (2022). The Supreme Court affirmed that Iskanian’s prohibition on PAGA waivers is not inconsistent with the Federal Arbitration Act. 124 Broughton v. Cigna Healthplans of Cal., 21 Cal. 4th 1066 (1999); Cruz v. PacifiCare Health Sys., Inc., 30 Cal. 4th 303 (2003). 125 McGill v. Citibank, 232 Cal. App. 4th 753 (2014), judgment rev’d, 2 Cal. 5th 945 (April 6, 2017). 126 Id. at 770 (quoting Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th 348, 379 (2014)). 127 Id. at 761. 128 McGill v. Citibank, review granted, 345 P.3d 61 (Cal. April 1, 2015) (granting review to decide: “Does the Federal Arbitration Act (9 U.S.C. § 1 et seq.), as interpreted in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), preempt the California rule (Broughton v. Cigna Healthplans, 21 Cal. 4th 1066 (1999); Cruz v. PacifiCare Health Sys., Inc., 30 Cal. 4th 303 (2003)) that statutory claims for public injunctive relief are not subject to compulsory private arbitration?”). 129 McGill v. Citibank, N.A., 2 Cal. 5th 945, 952, 962 (2017). 130 Clifford v. Quest Software Inc., 38 Cal. App. 5th 745, 753 (2019) (distinguishing the private injunctive relief sought here from the public injunctive relief sought in Broughton and Cruz against misleading advertising practices). 131 Id. 132 Melendez v. San Francisco Baseball Assocs. LLC, 7 Cal. 5th 1, 10 (2019) (“Plaintiffs’ claim arises solely from independent state law— Labor Code section 201—and is not based on the collective bargaining agreement.”). 133 Id. at 13. 134 Section 10(a) of the FAA empowers courts to vacate an arbitral award only where (1) the award was procured through corruption, fraud, or undue means, (2) the arbitrator was corrupt or evidently partial, (3) the arbitrator committed prejudicial misconduct such as refusing to hear material evidence, or (4) the arbitrator exceeded powers or so imperfectly executed them that a definite award on the subject matter submitted was not made. 9 U.S.C. § 10(a). 135 The Supreme Court decision is Hall Street Assocs. v. Mattel, Inc., 552 U.S. 576 (2008). A case holding that the “manifest disregard” doctrine remains viable after Hall Street is Kashner Davidson Securities Corp. v. Mscisz, 531 F.3d 68 (1st Cir. 2008) (vacating arbitration award based on manifest disregard of the law). 136 Siegel v. Prudential Ins. Co., 67 Cal. App. 4th 1270 (1998). 137 Pearson Dental Supplies, Inc. v. Sup. Court, 48 Cal. 4th 665, 669-70 (2010) (trial court properly vacated arbitrator’s award that “clearly erred in ruling that the employee’s claim was time-barred,” because award would have deprived the employee of “a hearing on the merits of an unwaivable statutory employment claim”). 138 Brown v. TGS Mgmt. Co., 57 Cal. App. 5th 303 (2020). 139 See Civ. Proc. Code §§ 1286.2 (ground for vacating arbitration award), 1286.6 (grounds for correcting arbitration award). 140 Crowell v. Downey Cmty. Hosp. Found., 95 Cal. App. 4th 730 (2002) (parties cannot agree to expand jurisdiction of court to provide judicial review of arbitration awards beyond that provided by statute). 141 Cable Connections v. DirecTV, 44 Cal. 4th 1334, 89 Cal. Rptr. 3d 229 (2008). The Supreme Court’s reasoning suggests that the parties could also contract to vacate an award that lacks substantial evidence to support it. 142 Hall Street Assocs. v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396, 1404-05 (2008).
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