As the U.S. Supreme Court considers its decision in Viking v. Moriana, a case involving the California Private Attorneys General Act (PAGA), it’s raising questions about what the future of the controversial law will look like.
Akin Gump’s new PAGA report addresses how the Viking ruling, expected from the high court in June or July, could impact the statute, Jonathan P. Slowik, an Akin Gump attorney who co-authored the report, told the Northern California Record.
“The PAGA report is really taking Gump’s blog about all things PAGA, and we decided to launch it because of what we saw as a void in the commentary out there on California wage and hour litigation,” Slowik said. “As far as we know, this is the only blog that’s devoted 100 percent to PAGA.”
Slowik noted that PAGA is of central importance to California employers, in part because the maximum penalties available under PAGA are so steep, and if the SCOTUS rules in favor of Viking, it means individual PAGA claims will be able to be compelled to arbitration.
“And that currently is not the case under California Supreme Court precedent,” Slowik said. “We think that over the slightly longer term, PAGA could change because the state could take action to legislate around the U.S. Supreme Court's decision.”
PAGA, which was passed by outgoing Gov. Gray Davis in 2003, is a law exclusive to California. Recent data shows nearly 24,000 PAGA cases from 2016-2020, a significant increase compared to earlier years.
“The fact that PAGA cases so rarely go to trial I think it's emblematic of the fact that there's a lot of pressure on an employer to settle a PAGA case, regardless of its merits, because of the kind of worst-case scenario,” Slowik said.
Two major industries have sought and received PAGA exemptions through legislation – construction with AB 1654 and janitorial services with SB 646, but bills for more extensive reform haven’t advanced in Sacramento.
Akin Gump launched its PAGA blog in September 2021.
“We didn't know that the U.S. Supreme Court was going to take up the Iskanian question at the time, but it was it was fortuitous timing,” Slowik said.
He noted that the 2014 California Supreme Court Iskanian decision established that under California law, PAGA claims cannot be compelled to individual arbitration.
“The U.S. Supreme Court does not wade into the interpretation of California law, but it would effectively overturn Iskanian, because a ruling for Viking River Cruises would hold that the Federal Arbitration Act (FAA) preempts that California rule.”
Still, rumors of PAGA’s demise are premature, Slowik said.
“I think that employers should be prepared for the real possibility that the threat of Private Attorney General litigation will be present for years to come, no matter what happens in Viking River Cruises,” he said.