Ninth Circuit Rules That Only Individual PAGA Claims Can Be Compelled To Arbitration

On May 10, 2024, the Ninth Circuit decided Yuriria Diaz v. Macy's West Stores, after the employer appealed the district court's decision ordering arbitration of both an employee's individual and non-individual claims under the California Private Attorney Generals Act (PAGA). The Ninth Circuit held that even though the arbitration agreement made no mention of PAGA, an employee's individual PAGA claim was still subject to arbitration because the parties' intended to arbitrate all employment disputes between them. However the non-individual PAGA claims were not arbitrable, because the parties did not consent to arbitration of those claims.

In Yuriria, the parties' agreement prohibited class and collective actions, and required arbitration of all employment-related disputes. The plaintiff filed a PAGA action against her former employer alleging various violations of the California Labor Code, and the employer filed a motion to compel arbitration. The employer argued