UPDATE: SCOTUS Denies Petition For Cert In Iskanian

On June 24, 2014, the California Supreme Court issued a controversial decision in Iskanian v. CLS Transportation Los Angeles, LLC.  While the Court in Iskanian confirmed that an express class action waiver in an employment arbitration agreement is enforceable under California law, it also held that an arbitration agreement provision barring arbitration of a workers' representative Private Attorneys General Act (PAGA) claim is invalid as a matter of California public policy.  Under PAGA, employees can sue their employer for certain workplace violations on behalf of themselves, as well as other current or former employees, in "representative suits" similar to class actions.

The Iskanian Court reasoned that PAGA claims are outside the scope of the Federal Arbitration Act (FAA) because PAGA claims address disputes between the state and the employer, not between two contracting private parties.  The impact of this decision is that employers would no longer be able to