Iskanian v. CLS Transportation Los Angeles, LLC

In Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, the plaintiff asserted individual, class and PAGA claims against his former employer for alleged violations of the Labor Code and unfair competition law. As a condition of his employment, the plaintiff had agreed to arbitrate "'any and all claims'" arising out of his employment. (Iskanian, supra, 59 Cal.4th at p. 360.) Additionally, he had agreed to waive his right to bring class and representative actions in any forum, including arbitration. (Id. at p. 361.) The California Supreme Court held that the individual claims were subject to arbitration and that the class action waiver was valid. (Id. at pp. 360, 391.) However, because "an employee's right to bring a PAGA action is unwaivable," the court found the "agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy" and unenforceable as a matter of state law. (Id. at pp. 383-384, 360.) The Supreme Court held "that an arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy," "that the FAA's goal of promoting arbitration as a means of private dispute resolution does not preclude our Legislature from deputizing employees to prosecute Labor Code violations on the state's behalf," and that "the FAA does not preempt a state law that prohibits waiver of PAGA representative actions in an employment contract." (Id. at pp. 359-360.) In Iskanian, the arbitration agreement expressly provided that the plaintiff could "'not assert class action or representative action claims . . . in arbitration or otherwise,'" and that the employee agreed he would "'not seek to represent the interests of any other person.'" (Iskanian, supra, 59 Cal.4th at pp. 360-361.)