By: Leiann Laiks, Esq.
On February 12, 2024, the Ninth Circuit, in the case of Johnson v. Lowe’s Home Centers, LLC, 93 F.4th 459 (9th Cir. 2024), made a significant ruling regarding the handling of nonindividual Private Attorneys General Act (PAGA) claims. The court vacated a district court’s dismissal of a former employee’s nonindividual PAGA claims and sent them back for reconsideration under California law as interpreted in Adolph v. Uber Techs., Inc., 14 Cal. 5th 1104 (2023) (“Adolph”).
Background:
The plaintiff, a former employee of Lowe’s Home Centers, LLC, filed class claims for alleged violations of the California Labor Code and a PAGA claim on behalf of herself and other Lowe’s employees. The employer sought to compel arbitration of the plaintiff’s claims based on a pre-dispute employment contract containing an arbitration clause.
Court Decision:
Initially, the district court compelled arbitration of the plaintiff’s individual PAGA claim and dismissed the nonindividual PAGA claims, citing the United States Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022) (“Viking River”). However, in light of the California Supreme Court’s subsequent decision in Adolph, the plaintiff appealed.
Ninth Circuit’s Ruling:
The Ninth Circuit disagreed with the district court’s handling of the nonindividual PAGA claims. It held that while the plaintiff’s individual PAGA claim could be arbitrated, the dismissal of the nonindividual claims was incorrect. Therefore, the court vacated the dismissal and remanded the case to the district court to apply the principles outlined in Adolph.
Key Takeaway:
This ruling reaffirms that nonindividual PAGA claims are likely to be paused pending arbitration of individual PAGA claims, even in federal court. It’s essential for businesses to stay informed about these legal developments to ensure compliance and mitigate risks effectively.
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This blog is written as of April 2024. Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites.
All blogs on this site are for educational purposes only, do not constitute legal advice or opinion, and should not be applied to your situation, or any specific situation, without consultation with counsel. Strategy Law, LLP does not provide any legal advice concerning any matter discussed in a blog except upon formal engagement including, without limitation, execution of Strategy Law, LLP’s formal legal services agreement, and with respect to specific factual situations. No blog constitutes a guaranty, warranty, or prediction regarding the result of any legal matter discussed in the blog or any representation.
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