California employment case index

Luis Betanco delivered Living Spaces furniture from the retailer's California distribution centers to California customers and never crossed a state line. In a published decision filed June 25, 2026, the First District held he is still a 'transportation worker' exempt from the Federal Arbitration Act, because he was actively engaged in the interstate transportation of goods even though he made retail — not wholesale — deliveries. The furniture was inevitably destined from the outset of its interstate journey to his customers, so it never left the interstate stream even though it paused in a California warehouse. Because the FAA does not reach a section 1-exempt worker, Labor Code section 229 kept his statutory wage claims in court, and his representative PAGA claims survived under Adolph v. Uber Technologies. The order was affirmed.

The California Supreme Court granted review on March 25, 2026 in Barbosa v. Sierra Pacific Orthopaedic Center Medical Group to decide whether an arbitration agreement that designates the Federal Arbitration Act thereby imports the FAA's substantive provisions and their preemptive force, even where no interstate commerce is shown. The underlying Court of Appeal opinion is nonpublished, and the Court denied the requests to publish it on granting review. The paired grant-and-hold, Tuufuli v. West Coast Dental Administrative Services, is published but itself under review, and answered the question yes. This pending-review analysis sets out the Court's own issue statement, the competing answers below with their correct citability under rule 8.1115(e)(1), and what the answer decides for Armendariz, Labor Code section 432.6, the arbitration-fee statutes and the EFAA.

Marshalls moved to compel arbitration of the individual component of a single-count PAGA action under a 2014 arbitration agreement, relying on Viking River. Division Four affirmed the denial on pure contract grounds: the parties would have had to be clairvoyant to anticipate a distinction the Supreme Court would not draw for another eight years. The court expressly declined to enter the headless-PAGA dispute, and the authoring justice wrote separately at length questioning whether Viking River's federally imposed claim-splitting rule is constitutionally sound.

Lauren Brown filed the fifth of five overlapping PAGA actions against the same restaurant operator. While her case sat stayed, the employer settled globally with an earlier plaintiff, and the trial court then granted judgment on the pleadings. Division Eight affirmed. The only contested question it reached was whether the settling plaintiff's failure to wait the full 65 days after her amended agency notice destroyed the settlement's preclusive effect – and the court held it did not, because nothing extends the waiting period to amended notices and the agency itself had accepted the settlement. Brown also lacked standing for violations postdating her 2018 separation.

California's fee-default statutes have become the most-used route out of employer-drafted arbitration, and in August 2025 the Supreme Court rewrote how they work. Code of Civil Procedure sections 1281.97 and 1281.98 still declare that a drafting party who pays the arbitrator more than 30 days late is in material breach, in default, and has waived its right to compel arbitration. But in Hohenshelt v. Superior Court the court held, 5-2, that this scheme survives FAA preemption only on a construction that leaves intact the background relief-from-forfeiture provisions — Code of Civil Procedure section 473, subdivision (b) and Civil Code sections 3275 and 1511 — so that the loss of the arbitral forum follows only from nonpayment that was willful, grossly negligent, or fraudulent. Mandatory monetary sanctions under section 1281.99, subdivision (a) still follow automatically. This synthesis sets out the operative statutory text and credit lines, traces the eleven Court of Appeal decisions the Supreme Court disapproved, states the post-Hohenshelt rule as a four-step sequence, shows how the first published application (Wilson v. Tap Worldwide) deployed it as an as-applied preemption argument, and identifies what remains open — including whether the same construction governs section 1281.97.

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.

Billy Ford's 2018 arbitration agreement carved out representative claims under PAGA. After Viking River split PAGA claims into individual and non-individual halves, his employer argued the word representative had become ambiguous and that the FAA should resolve the ambiguity toward arbitration. The Third District affirmed the denial of the motion to compel, holding the clause unambiguous: because the contract was formed when settled California law forbade splitting a PAGA claim at all, the carve-out excludes every PAGA claim. Viking River changed the law of divisibility, not the principle that nobody arbitrates what they never agreed to arbitrate – a clean rule of construction for a very large installed base of legacy agreements.

Overlapping PAGA actions against one employer are now routine, and so is the race to settle. Turrieta v. Lyft decided what the losing racer may do about it: nothing. A non-settling plaintiff suing as the state's deputy on identical claims has no authority to intervene in the settling plaintiff's action, to require the court to hear objections, or to move to vacate the judgment — and Moniz v. Adecco (2025) holds that recasting the asserted stake as personal rather than sovereign changes none of it. What survives is not a voice in the first case but a defence in the second. Under Arias a PAGA judgment does bind non-party aggrieved employees; under LaCour v. Marshalls that preclusion must be proved, and a release reaching past the settling plaintiff's own agency authority binds her alone. The practical consequence is that the leverage has moved to the LWDA notice letter, which now measures what a PAGA plaintiff can ever release.

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

Between Viking River in June 2022 and Adolph in July 2023, federal courts across California dismissed the non-individual half of PAGA cases for want of standing, on the United States Supreme Court's reading of California law. In Johnson the Ninth Circuit says what to do about those dismissals while the case is still on appeal: affirm the order compelling arbitration of the individual PAGA claim, vacate the dismissal of the non-individual claims – not because the district court erred, but because the California Supreme Court has since corrected the state-law premise – and remand so the district court can apply Adolph. The panel also rejected the argument that Adolph cannot be reconciled with Viking River. Judge Lee concurred to flag what he called a lurking tension between Adolph's bifurcation procedure and the Federal Arbitration Act: if an arbitrator's findings in a low-stakes individual arbitration can bind in a high-stakes representative action, the economics of arbitration change. He saw no irreconcilable conflict on these facts, and explained why – which is also a map of how the argument will be made next time.

For three years the first move in every large PAGA defence was a motion to strike the claim as unmanageable. Estrada v. Royalty Carpet Mills ended that unanimously, and ended it structurally: the Supreme Court did not weigh the policy and come out against, it found that no California court had ever possessed such a power and declined to create one. The question since is what remains, and the answer is more than defendants expected and less than they wanted. Evidence limits, scope limits, witness control, consolidation and ordinary merits rulings all survive untouched, and in 2024 the Legislature put the first two into Labor Code section 2699, subdivision (p) in almost the court's own words — while pointedly leaving out the dismissal power. The word manageability appears nowhere in the statute. What is left open is narrow: a due-process authority of last resort that Estrada reserved and no published decision has yet defined.

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.

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 […]

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…

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 after-acquired-evidence defence is raised in a large share of wrongful-termination cases and its effect is routinely mis-stated. It does not defeat liability. Under McKennon it limits the remedy — no reinstatement and no front pay as a general rule, with backpay running from the unlawful discharge to the date the employer actually discovered the wrongdoing — and under Salas v. Sierra Chemical Co. the same is true in California of both after-acquired evidence and unclean hands, neither of which is a complete defence to a FEHA claim. This analysis fixes the cut-off date, sets out what the employer must prove to earn it, keeps Salas's immigration-status holding in its proper place as a separate federal overlay, and explains why Camp v. Jeffer, Mangels, Butler & Marmaro — the one California decision to produce a complete bar — now sits uneasily with Salas.

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.

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.

Reeves v. Sanderson Plumbing Products, Inc. A plaintiff’s prima facie case combined with sufficient evidence that the employer’s stated reason is false can, without more, sustain a finding of intentional discrimination. Reeves v. Sanderson Plumbing Products, Inc. (2000) 530 U.S. 133 Parallel citations: 120 S.Ct. 2097; 147 L.Ed.2d 105. Supreme Court of the United States. […]

In McKennon v. Nashville Banner Publishing Co. (1995) 513 U.S. 352, a 62-year-old secretary discharged in what the employer conceded for summary-judgment purposes was age discrimination admitted in deposition that she had copied confidential company documents during her final year. The lower courts held this after-acquired evidence barred all ADEA relief. A unanimous Supreme Court, per Justice Kennedy, reversed. Such evidence does not bar liability — the ADEA violation that prompted the discharge cannot be disregarded — but it bears on the remedy: as a general rule it forecloses reinstatement and front pay, and back pay runs only from the date of the unlawful discharge to the date the employer discovered the wrongdoing. And the employer must first prove the wrongdoing was so severe that it would in fact have discharged the employee on that ground alone.

In Western Air Lines, Inc. v. Criswell (1985) 472 U.S. 400, the Supreme Court adopted the two-part age-BFOQ test for the Age Discrimination in Employment Act: the age limit must be reasonably necessary to the essence of the employer's business, and the employer must show either reasonable cause to believe that all or substantially all older workers cannot perform the job safely or that it is impossible or highly impractical to assess older employees individually. The Court rejected a deferential “rational basis” standard.