SCOTUS Denies Review of Another Case Involving PAGA Representative Action Waivers in Arbitration Agr
Today, the United States Supreme Court unfortunately denied review in Bridgestone Retail Operations v. Milton Brown (Docket No. 14-790) – thereby declining a second opportunity to review the California Supreme Court’s determination that PAGA representative action waivers in employment arbitration agreements are not enforceable. Earlier this year, the U.S. Supreme Court denied review in Iskanian v. CLS Transportation, which first presented the issue for review before the high Court. In Iskanian, the California Supreme Court of course held that class action waivers in arbitration agreements are enforceable, but that PAGA representative action waivers are not. The Iskanian Court’s reasoning is difficult to square with U.S. Supreme Court precedent in Concepcion v. AT&T Mobility. As such, many employers were hoping the Court would grant review if not in Iskanian then at least in Bridgestone—with the issue being presented for a second time in that case. No such luck. For now, California employers will continue to be stuck with the Iskanian precedent in California state court. Meanwhile, California federal courts have widely rejected Iskanian and thus, the enforceability of a PAGA representative action waiver in an arbitration agreement continues to depend on whether the issue is being decided by a California state court or a federal court. Perhaps one of the cases making its way through the California federal appellate track (the Ninth Circuit) will convince the Supreme Court to accept review to resolve the conflict between California state and federal courts on this important issue for California employers. In the meantime, California employers should stay the course, understanding that class action waiver provisions are fully enforceable in both state and federal courts in the Golden State. The piggy-back PAGA representative claims will continue to present challenges – at least in state court.