Lawson v. ZB, N.A. – The Dispute Over Arbitrability of PAGA Claims Continues

On Behalf of | Feb 5, 2018 | Firm News |

In Lawson v. ZB, N.A., 18 Cal. App. 5th 705 (2017), Plaintiff asserted various wage and hour claims and a California Private Attorneys General Act (“PAGA”) claim against Defendant employer seeking penalties and underpaid wages pursuant to Cal. Labor Code § 558. Defendant moved to compel arbitration of Plaintiff’s individual claims and her Cal. Labor Code § 558 claim for underpaid wages pursuant to an arbitration agreement whereby Plaintiff waived her right to bring a class or representative action. The trial court granted Defendant’s motion pursuant to Esparza v. KS Industries, L.P., 13 Cal. App. 5th 1228 (2017). Plaintiff filed a petition for writ of mandate challenging the trial court’s order.

The California Court of Appeal, “respectfully part[ing] company with” (i.e., rejecting) Esparza, granted Plaintiff’s petition and ordered the trial court to vacate its order. Lawson, 108 Cal. App. 5th at 722, 725 (“the trial court’s order bifurcating [Plaintiff’s] PAGA claims between the denominated assessments and underpaid wages was erroneous.”). The Court of Appeal reasoned that “because, prior to enactment of PAGA there was no private remedy under section 558,” the underpaid wages claim was only recoverable pursuant to PAGA, “indivisible” from “section 558 [] claims for civil penalties” and therefore, not arbitrable Id. at 724-725.

If you have any questions about the enforceability of arbitration agreements as to particular employment related claims, please contact the attorneys at Shulman Bastian Friedman & Bui LLP at 949-340-3400.

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