Legal Update: Potential PAGA Killer

The United States Supreme Court will soon hear a pivotal case impacting employers with non-exempt hourly employees. The case, Moriana v. Viking River Cruises, is set for oral argument on March 30, 2022, with a decision expected this summer.

This case could be a game changer for employers looking to avoid or reduce penalties from claims brought under the Private Attorneys General Act (the “PAGA”) through the use of voluntary arbitration agreements. Current law only allows arbitration agreements to cover class action claims but not PAGA claims. Thousands of California employers have saved hundreds of millions of dollars in costly class action cases through arbitration agreements, but PAGA claims continue to threaten California businesses. In Viking River Cruises, the Supreme Court is expected to rule on whether PAGA claims can be covered by arbitration agreements as well. If the Court rules in favor of employers, a well-drafted arbitration agreement properly communicated to employees could help protect your business from both class action and PAGA claims. 

If it has been a while since you have had your agreement reviewed by counsel, you should consult with one of our experienced employment attorneys as soon as possible to ensure that your business has the maximum possible protection in the event the Viking River Cruises case comes down in favor of employers.