Transportation Brief: Individual PAGA Claims Can be Arbitrated, But Only Where the FAA Applies

by Braden K. Core, Prasad Sharma

September 14, 2022

In a closely-watched case decided this term, the U.S. Supreme Court held that California’s long-standing rule prohibiting parties from agreeing to arbitrate Private Attorneys General Act (PAGA) claims is preempted by the Federal Arbitration Act (FAA). However, there are limits to the holding. First, parties can agree that individual PAGA claims must be resolved by arbitration, but they cannot require representative PAGA claims to be arbitrated. Instead, the representative PAGA claim must be heard in a separate court action. Thus, the U.S. Supreme Court held that the representative claims should be dismissed for lack of standing, but California courts may hold that dismissal is not required, or the Legislature may amend PAGA to the same effect. Second, the Court’s holding only applies where the FAA applies. Generally, interstate “transportation workers,” including truck drivers, are exempt from the FAA, so they will continue to be subject to the California rule prohibiting agreements to arbitrate even individual PAGA claims.

• Transportation Brief: AB 5 Petition Denied by U.S. Supreme Court
  by Shannon M. Cohen , Gregory M. Feary , Prasad Sharma
  
  On June 30, 2022, the U.S. Supreme Court refused the California Trucking Association’s (CTA) appeal to maintain an injunction prohibiting enforcement of California’s AB 5 (the strict ABC worker status test used in California). On August 29, the injunction was lifted. AB 5 can now be enforced by state officials against the trucking industry. Transportation businesses may use various strategies in an effort to comply with AB 5, but much is still unclear. Read more from Scopelitis attorneys about thoughtful and informed strategies regarding AB 5.
• Transportation Brief: Consumer Protection Class Actions — A New Favorite for IC Drivers
  by Karen Butler Reisinger , Angela S. Cash
  
  Recently, independent contractor drivers in Iowa, Oklahoma, Tennessee, and Utah have obtained class certification of claims alleging deceptive practices by a motor carrier under state consumer protection statutes. More from Scopelitis on instances wherein contractors argue that motor carriers deceive drivers by promising monthly miles or revenue in the recruiting process that fails to materialize.
• Transportation Brief: Illinois Supreme Court Poised to Issue Key Biometric Privacy Law Rulings
  by Jared Kramer
  
  Illinois’ Biometric Information Privacy Act (BIPA) is one of the nation’s toughest laws regulating the collection, storage, and use of biometric identifiers. The Illinois Supreme Court is considering two cases that may have significant ramifications for companies that have potential exposure under the law. Read more about these cases and their potential impact on the industry.
• Transportation Brief: Supreme Court Addresses “Transportation Worker” Exemption from the FAA
  by Braden K. Core , Prasad Sharma
  
  In a unanimous opinion, the U.S. Supreme Court clarified who qualifies as a “transportation worker” for purposes of the exemption from the Federal Arbitration Act (FAA). In Southwest Airlines v. Saxon, the Court held that an airline’s ramp supervisor, who regularly performed loading and unloading of luggage, mail, and cargo, was exempt from the FAA. Read more about the Court’s reason and how it might apply to workers.
• Transportation Brief: Spotlight on The Firm’s Air and Ocean Practice
  by Braden K. Core , Nathaniel G. Saylor
  
  Freight forwarders that handle air and ocean cargo face a daunting set of legal hurdles at every turn. The Scopelitis Air and Ocean Practice helps clients navigate this often-uncertain legal environment by charting a course to success that aligns with the unique objectives of each business. Learn more about how Scopelitis attorneys help businesses with air cargo and ocean cargo issues, respectively.
• Transportation Brief: For the Record, Summer 2022
  
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