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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.



Scopelitis’ Transportation Brief® is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.


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