On January 18, 2024, in a highly anticipated and unanimous decision, the Supreme Court of California barred striking a claim under the Private Attorneys General Act (PAGA) on trial manageability grounds alone, instead authorizing due process defenses to PAGA claims (Estrada v. Royalty Carpet Mills, Inc.). The decision also commented approvingly on representative testimonies, surveys and statistical analyses. As a result of the decision, employers now face a new challenge of marshalling such evidence to their defenses and challenging the misuse of such evidence on due process grounds in future PAGA litigation.
On June 15, 2022, the Supreme Court of the United States finally issued its long-awaited decision in Viking River Cruises, Inc. v. Moriana. The Court partially overturned Iskanian v. CLS Transportation Los Angeles, LLC (Iskanian), determining that the Federal Arbitration Act (FAA) preempts the aspect of Iskanian’s holding that precludes the division of Private Attorneys General Act of 2004 (PAGA) actions into individual and non-individual claims through an agreement to arbitrate. Meaning, if an employee subject to a valid arbitration agreement brings a PAGA claim, then the employee’s individual PAGA claim must be adjudicated in arbitration. (The individual aspect of the PAGA claim refers to violations of the Labor Code actually suffered by the plaintiff, whereas the non-individual “representative” aspect of the PAGA claim refers to the violations the plaintiff has alleged on behalf of other employees.)
California’s Private Attorneys General Act (PAGA) has so far evaded arbitration agreements. Now, the Supreme Court of the United States will take up Viking River Cruises, Inc. v. Moriana to determine whether the Federal Arbitration Act (FAA) “requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under PAGA.”
On September 9, 2020, California Governor Gavin Newsom signed into law Assembly Bill 1867, the California COVID-19 Supplemental Paid Sick Leave Act. According to the law, employers with more than 500 employees nationally, and employers of healthcare-provider and emergency-responder employees previously exempted from Families First Coronavirus Response Act (FFCRA) requirements, must provide California employees with two weeks of supplemental paid sick leave for specified COVID-19 reasons. Additionally, the law requires employers to comply with urgent-notice and posting requirements that are administratively burdensome.
In a presentation at McDermott’s Employment and Employee Benefits Forum, our lawyers discuss the patchwork of state and local laws surrounding pay equity for similarly situated employees doing the same job. Particularly in California, new developments have emerged further clarifying pay equity laws. For best practices, they recommend:
Establishing compensation ranges across substantially similar jobs
Taking into account job-related factors when establishing and evaluating employee compensation
Conducting pay equity analysis under privilege
Performing a thoughtful time analysis and remedial action
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