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Society for Human Resource Management: Employers Await Significant High Court Ruling in California PAGA CaseApril 07, 2022
Businesses can experience major penalties from claims made under the California Private Attorneys General Act (PAGA) and the US Supreme Court is grappling with allowing employers to enforce arbitration agreements that prevent representative claims. In Viking River Cruises Inc. v. Moriana, a sales representative brought PAGA action against her employer for violating the California Labor Code. Even though the employee signed a pre-dispute agreement that waived her right to bring a representative action, a California appeals court sided with the employee and declined to enforce the waiver. The employer ultimately asked the Supreme Court to weigh in. During recent oral arguments, the justices seemed divided on the issue. “The impact of this case could be profound,” said Adam Karr of O’Melveny & Myers LLP. “This case is the first opportunity for the Supreme Court to weigh in on whether the Federal Arbitration Act (FAA) pre-empts California’s PAGA rules.”
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