California employment case index

A Tesla yard hostler who moved 53-foot trailers of out-of-state auto parts around the Fremont factory — never crossing a state line — sued for wage-and-hour violations, and Tesla moved to compel individual arbitration. In the published portion of its opinion, the First District holds yard hostlers are FAA section 1 transportation workers exempt from arbitration, and clarifies which wage claims Labor Code section 229 keeps in court.

A former UPS seasonal driver sued for wage violations; the district court compelled arbitration of her individual claims but refused to decide whether the FAA or state arbitration law governed, reasoning the result was the same. The Ninth Circuit grants a writ of mandamus: under New Prime, the court — not an arbitrator — must decide whether the FAA section 1 transportation-worker exclusion applies before compelling arbitration.

A PAGA plaintiff proved Labor Code violations but recovered about one percent of the $56 million maximum he calculated, and his attorney fees were cut by a 0.70 negative multiplier. The Fourth District affirms: section 2699(e)(2) mandates no method for reducing penalties — per-employee is fine — and the trial court adequately justified the fee multiplier, leaving the “heightened scrutiny” question for the Supreme Court.

A staffing agency hired a worker under an arbitration agreement and placed him at a client; when the placement ended, the client hired him directly, and he later sued the client over that direct-employment period. The First District affirms denial of arbitration: the client was not a party or “affiliate” of the agency, the claims fell outside the agreement’s scope, and the worker was not equitably estopped — a nonsignatory cannot simply borrow a staffing agency’s arbitration clause.

A railcar repairman who inspected and repaired freight cars taken out of service in a rail yard brought a wage-and-hour class action and argued his arbitration agreement was exempt as a transportation worker’s contract. The Second District disagrees: he is neither a “railroad employee” nor a “transportation worker” under FAA section 1, because repairing decommissioned cars is too far removed from actual transportation — so his arbitration agreement and class waiver are enforceable.

A terminated Blue Origin executive opposed arbitration of his FEHA and related claims. The Court of Appeal affirmed the denial of arbitration on unconscionability grounds — expressly declining to reach the federal EFAA — holding the adhesive agreement substantively unconscionable in at least four ways: overbreadth, lack of mutuality, a predispute jury-trial waiver, and a representative/PAGA waiver. Applying Ramirez v. Charter Communications, the court refused to sever, because curing the overbreadth and non-mutuality would require impermissible reformation and would reward one-sided drafting; severance “would not further the interests of justice.”

Studebaker made a new employee sign three onboarding arbitration documents; the trial court found their “conflicts” showed no valid agreement and denied arbitration. The Second District reverses and compels arbitration — ambiguities must be reconciled to give effect to the intent to arbitrate, the agreement was not unconscionable, and an inconsistent wholesale PAGA waiver should have been severed.

After two of four bellwether arbitrators found a travel-nursing agency’s arbitration agreements invalid, a district court used non-mutual offensive collateral estoppel to void 255 other employees’ separate agreements. The Ninth Circuit reverses: the FAA guarantees individualized, one-on-one proceedings, and forbids using other arbitrators’ rulings to invalidate other parties’ agreements wholesale.

The California Supreme Court holds that illegible, one-sided arbitration print is procedural (not substantive) unconscionability — and that no presumption favors arbitration.

Twenty-two months into a wage-and-hour class action, TEKsystems rolled out a new mandatory arbitration agreement to the recruiter class members and moved to compel arbitration. The Ninth Circuit affirms denial of that motion: Rule 23(d) lets a district court refuse to enforce an agreement obtained through misleading, mid-litigation communications that threaten the fairness of the class action — the FAA gives arbitration no special protection.

The California Supreme Court holds that CCP §1281.98's arbitration-fee-payment forfeiture rule is not preempted by the FAA — but, rejecting the rigid automatic-forfeiture reading, only where a late payment is willful, grossly negligent, or fraudulent rather than a good-faith mistake or excusable neglect.

A newly hired care coordinator was pressured to sign an arbitration agreement amid a stack of 31 onboarding documents on her first day. When she said she did not understand it, the HR manager assured her it would let the company resolve disputes cheaply and without lawyers — untrue, since the agreement imposed adversarial federal-rules arbitration with each side bearing its own fees. The Court of Appeal affirmed the denial of arbitration: the oral misrepresentation, contradicting the written terms, made the agreement substantively unconscionable because it defeated the employee's reasonable expectations. Intent to mislead was not required — the court focused on effect, not intent.

After Turrieta v. Lyft disapproved Moniz II by name, the objector in the long-running Adecco PAGA settlement tried a new key for the same lock: she was asserting her own personal interests — a penalty share, fees, a service award — not the state’s. Division Four dismissed her appeals. Every interest she claimed arises from PAGA itself and is derivative of the state’s; relabeling it personal is a semantic exercise that would leave Turrieta’s holding with no effect. The first published application of Turrieta makes overlapping-settlement fights a before-judgment affair: object in the approving court, police preclusion scope under LaCour — but intervention, vacatur, and appeal are closed.

A terminated employee resisted arbitration of his FEHA claims, arguing that under Aixtron the arbitrator could not compel prehearing third-party discovery. The Sixth District reversed the denial of arbitration: applying Ramirez’s five discovery factors and construing the clause to preserve validity, it held that JAMS Rule 17 (2014) gives the arbitrator authority to expand nonparty discovery when necessary, so the agreement was not substantively unconscionable. The court disapproved Aixtron to the extent it read an arbitrator’s authority narrowly — creating an intra-district split — and noted that Senate Bill 940 now supplies CAA third-party discovery by default for current agreements.

After a court compelled arbitration of a wage-and-hour class action, neither side filed a demand, and the trial court lifted the stay on the theory that the employer — which had moved to compel — waived arbitration by not commencing it. The Court of Appeal reversed: reading the agreement as a whole, the ‘party who wants to start the Arbitration Procedure’ is the claimant asserting a legal claim, so the employees who agreed to ‘submit’ their claims had to file the demand; the employer’s inaction was neither a breach nor a waiver. The court expressly declined to reach the separate arbitration-fee-default statute (Code Civ. Proc., § 1281.98).

Does every PAGA action contain an individual claim an employer can compel to arbitration? The split the California Supreme Court will resolve.

Two Highland Hospital workers sued the public hospital authority running Alameda County’s medical facilities for meal-and-rest violations, unpaid wages, and PAGA penalties. A unanimous Supreme Court ended the case at the definitions: Labor Code section 18’s “person” — the term that controls who is an “employer” under the wage order and who can be penalized under PAGA — affirmatively excludes public entities. Absent express words bringing the government in, break rules and PAGA penalties stop at the public-sector line. The court disapproved Sargent’s contrary rule for statutes carrying their own penalties, declined to decide whether Government Code section 818 independently bars such penalties, and reserved the effect of the 2024 PAGA reform.

Three Lyft drivers filed overlapping PAGA actions; when one settled, the other two moved to intervene, objected, and moved to vacate the judgment — invoking their status as deputized proxies of the state. A divided Supreme Court held a PAGA plaintiff’s deputization confers no such rights: the statute delegates the power to commence and prosecute one’s own action, and it entrusts settlement oversight to the LWDA and the approving court. Moniz v. Adecco is disapproved. What remains for rival plaintiffs is coordination, informal input to the approving court, and advocacy to the LWDA — plus the open questions the court expressly reserved, including the state’s own rights and personal-interest intervention.

Quach v. California Commerce Club, Inc.California abandons its arbitration-specific rule requiring proof of prejudice to establish that a party waived the right to compel arbitration; waiver is now governed by the same general contract principles — proof by clear and convincing evidence of an intentional relinquishment — that apply to any other contractual right.Quach v. […]

Charter’s mandatory arbitration agreement directed employees’ claims into arbitration while carving out the claims Charter itself would bring, compressed FEHA filing to the one-year administrative window, and made anyone who unsuccessfully resisted arbitration pay the fees incurred to compel it. The Supreme Court held all three terms substantively unconscionable — but validated the four-deposition discovery cap, disapproving the line of cases that judged discovery limits by a particular plaintiff’s later needs. On remedy, the court rejected clause-counting: severance is a qualitative, totality inquiry under Armendariz, and the refusal to enforce was reversed and remanded for that analysis.

USC required a staff employee to sign an arbitration agreement reaching ‘all claims, whether or not arising out of’ her employment, against USC and a broad web of affiliated persons, surviving her employment indefinitely and revocable only by the university president. The Court of Appeal affirmed the denial of arbitration: the agreement was substantively unconscionable for three independent reasons — overbroad scope, infinite duration, and lack of mutuality — and the trial court reasonably refused to sever, because curing it would require rewriting the plain language and would hand USC a windfall. Unconscionability is judged at the time of contracting, so the employer could not save the agreement by noting the plaintiff’s actual claims were employment-related.

Delivery drivers sued for wage and misclassification violations; their employer moved to compel arbitration and dismiss. A unanimous Supreme Court held that FAA § 3 gives a district court no discretion to dismiss a suit it sends to arbitration when a party requests a stay — ‘shall’ means ‘shall’ and ‘stay’ means ‘stay.’ Staying rather than dismissing preserves the parties’ return ticket to court if arbitration breaks down, a point with real stakes for employees whose employers later default on arbitration fees.

A unanimous Supreme Court held that the Federal Arbitration Act’s § 1 exemption for transportation workers turns on what a worker does, not the industry the employer occupies. Bakery-goods delivery drivers who sued for wage violations therefore could not be forced into arbitration merely because their employer sells bread rather than transportation. The decision resolves a circuit split and completes the § 1 line running from Circuit City through Saxon, while expressly leaving open whether these particular distributors qualify as transportation workers at all.

Estrada v. Royalty Carpet Mills, Inc. (2024) 15 Cal.5th 582 holds that trial courts lack inherent authority to strike a PAGA claim as unmanageable, even if it is complex or time-intensive. Manageability is a class-action requirement that does not apply to PAGA; complexity must be handled through ordinary case-management tools, not dismissal.

Marshalls bought a sweeping PAGA release in a federal settlement whose plaintiff had noticed only one theory to the LWDA — off-the-clock time in end-of-shift bag checks. When Robert LaCour later sued over expense reimbursement and other never-noticed violations, the trial court struck his claims as precluded. Division Four reversed: a PAGA judgment’s preclusive reach is measured by the claims the settling plaintiff pleaded or was authorized by her LWDA notice to plead, not by the words of her release, and an unauthorized proxy is in privity with no one. The court also upheld pandemic Emergency Rule 9, and it reserved issue preclusion while barring any double recovery.

Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104 holds that a PAGA plaintiff whose individual claims are compelled to arbitration retains standing as an “aggrieved employee” to litigate the non-individual representative claims in court — California’s answer to the standing question left open by Viking River.

Analysis · Key Case Cvejic v. Skyview Capital, LLC (2023) 92 Cal.App.5th 1073 Court of Appeal, Second Appellate District, Division Eight · Docket No. B318880 · Decided June 28, 2023 Verify before relying. A summary and analysis as of its publication date — not legal advice, and not a representation that the decision remains good […]

Kindercare’s arbitration agreement contained a “poison pill”: a clause providing that the whole agreement is invalid if its class/representative-action waiver is unenforceable. Because a wholesale predispute waiver of representative PAGA claims cannot be enforced after Iskanian and Viking River, the Court of Appeal held the poison pill voided the entire agreement — sending every claim, including the employee’s individual claims, to court. Had Kindercare omitted the poison pill, Viking River would have let it compel the individual claims; its own drafting foreclosed that path. The drafter was held to the all-or-nothing clause it wrote.

The Ninth Circuit held the Federal Arbitration Act preempts AB 51 (Labor Code § 432.6), California's attempt to ban mandatory employment arbitration, because a state rule that burdens the formation of arbitration agreements stands as an obstacle to the FAA.

The FAA preempts Iskanian to the extent it bars division of a PAGA action and prevents arbitration of an employee’s individual PAGA claim; an employer may compel the individual PAGA claim to arbitration. (The Supreme Court further opined that, under its reading of California law, the plaintiff would then lack standing…

Morgan v. Sundance, Inc. A court may not condition waiver of the right to arbitrate on a showing that the opposing party was prejudiced; the FAA’s “policy favoring arbitration” places arbitration agreements on equal footing with other contracts and does not authorize arbitration-specific procedural rules. Morgan v. Sundance, Inc. (2022) 596 U.S. 411 Parallel citations: […]

Settling and dismissing individual Labor Code claims does not strip an employee of standing to pursue a PAGA claim. PAGA standing depends on being an “aggrieved employee” — someone employed by the alleged violator against whom one or more Labor Code violations were committed — not on maintaining an unredressed…

The unpaid-wages component of section 558 is not a civil penalty recoverable through PAGA; only the fixed civil penalties ($50/$100 per employee per pay period) are PAGA penalties. Because the unpaid wages are not part of the PAGA claim, the trial court could not compel that portion to arbitration as if it were.

The agreement was both procedurally and substantively unconscionable and therefore unenforceable. The manner of presentation — a take-it-or-leave-it document thrust at a low-wage worker for immediate signature, in dense legalese he was unlikely to understand — was highly oppressive and surprising, and the arbitral…

Arbitration agreements providing for individualized proceedings — including class- and collective-action waivers in the employment context — are enforceable under the FAA, and the NLRA does not override the FAA or render such agreements unlawful; courts must enforce the agreements according to their terms.

A PAGA plaintiff is presumptively entitled to discover the identities and contact information of other aggrieved employees statewide, subject to the employees’ privacy interests (which may be protected through a Belaire-West opt-out notice) rather than to a heightened threshold showing of merit before discovery.

A provision in a predispute arbitration agreement that waives the right to seek public injunctive relief in any forum is contrary to California public policy and unenforceable (the “McGill rule”); and because that rule applies to contracts generally and does not single out arbitration, the FAA does not preempt it.

The arbitrator’s award was upheld. Under the narrow standard of review governing arbitration awards, the court declined to decide whether the “honest belief” defense applies to CFRA claims; even assuming the arbitrator erred in invoking it, the error did not deprive the employee of an unwaivable statutory right, so…

Iskanian v. CLS Transportation (2014) 59 Cal.4th 348 holds that class-action waivers in employment arbitration agreements are enforceable after Concepcion (abrogating Gentry), but a predispute waiver of a representative PAGA action is contrary to public policy and not preempted by the FAA, because a PAGA claim belongs to the state.

Concepcion preempts a categorical, arbitration-specific rule that a Berman-hearing waiver is per se unconscionable; but generally applicable unconscionability doctrine survives, and an arbitration agreement remains unenforceable if it is unreasonably one-sided. The court concluded this agreement’s waiver was markedly…

The FAA preempts the Discover Bank rule. A state rule that conditions the enforceability of an arbitration agreement on the availability of classwide arbitration interferes with the fundamental attributes of arbitration and stands as an obstacle to the FAA’s objective of enforcing arbitration agreements according to…

Arias v. Superior Court (2009) 46 Cal.4th 969 holds that a representative PAGA action for civil penalties need not satisfy class-action requirements, while a representative UCL claim for the same Labor Code violations must — and that a non-class PAGA action does not violate the employer’s due-process rights.

Two unions took assignments from more than 150 transportation workers and sued their employers under the UCL and PAGA for meal- and rest-break violations. The Supreme Court unanimously shut the door: after Proposition 64, an assignment cannot confer UCL standing on an uninjured assignee, and a PAGA claim cannot be assigned at all — the act creates no property right, so the aggrieved employee, suing as the state’s proxy, ‘does not own an assignable interest.’ Associational standing does not fill the gap, and representative UCL claims must proceed as class actions per the same-day companion, Arias. The state-proxy architecture announced here is the foundation Iskanian, Kim v. Reins, Adolph, and Turrieta all build on — and the 2024 reform kept its line intact.

A class-action waiver in an employment arbitration agreement may be unenforceable where class arbitration would be a significantly more effective way to vindicate employees’ unwaivable statutory rights (such as overtime), considering factors like the modest size of individual recoveries, the risk of retaliation, and…

At least some class-action waivers in consumer adhesion contracts are unconscionable under California law — the “Discover Bank rule” — where the waiver is in an adhesion contract, the disputes predictably involve small amounts of damages, and the party with superior bargaining power has carried out a scheme to cheat…

Mandatory employment arbitration of unwaivable statutory claims is permissible only if the agreement provides certain minimum protections — a neutral arbitrator, adequate discovery, a written award subject to limited review, all types of relief otherwise available in court, and no requirement that the employee bear…