California employment case index

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.”

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

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.

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.

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…

The Court of Appeal affirms a statewide preliminary injunction against Uber and Lyft, holding the People likely to prevail under prong B of the ABC test (Lab. Code, § 2775) — rideshare driving is within the usual course of the companies’ business — and rejecting the “technology platform” defense as a false dichotomy. (Predates Proposition 22; see Castellanos.)

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…

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.