As a condition of employment, were you asked to sign an arbitration agreement? If so, recent court cases related to California’s Private Attorneys General Act (PAGA) may be of interest to you. Consulting with a good employment attorney may be a worthwhile investment for you at this point.
How Does Arbitration Work?
Companies and individuals who sign on to arbitration agreements essentially decide to settle any disputes with the use of a private arbitrator from an organization such as JAMS or the American Arbitration Association. Employees for these private arbitration companies are generally retired judges who know the law. An advantage of arbitration is that proceedings are often inexpensive and quick. For employees, an additional benefit is that employers pay the arbitrator’s fees in total.
PAGA
PAGA was originally developed to entice employees to become engaged in reporting labor law infractions. Employees who were impacted by labor violations are able to keep 25% of penalties that companies pay out, while the Labor and Workforce Development Agency keep the other 75%. It is a simple incentive to get employees to report problems that might otherwise go undocumented and unprosecuted. A one-year statute of limitations was placed on these class actions. The California Supreme Court has found that plaintiffs are not required to certify as a class in order to receive damages for impacted employees.
What Does this Mean for Employees Who have Signed Arbitration Agreements?
While California courts have defended the right of companies to enforce their waiver agreements, they have also found that actions brought under PAGA are not subject to arbitration waivers, as employees cannot be forced to relinquish their right to bring PAGA actions as a condition of employment (Iskanian v CLS Transportation Los Angeles, LLC). Plaintiffs must therefore clearly state whether they are pursuing individual damages—which must be arbitrated—or civil penalties under PAGA. In the event the employee wishes to pursue both, the individual claim should be brought first. For the PAGA proceedings, defendants must provide employee contact information to the plaintiff who is seeking penalties on behalf of those fellow workers.
What Kinds of Infractions are Suitable for a PAGA Claim?
PAGA claims may deal with any number of employee pay issues, including:
- Unpaid overtime wages;
- Meal/rest period violations;
- Unpaid commissions;
- Unpaid vacation pay;
- Bounced checks from your employer.
What does the PAGA Process Entail?
If you do decide to go forward with a PAGA claim, you must file the appropriate paperwork within the statute of limitations timeframe. The Labor Commissioner will then notify you of a date for a Settlement Conference. At this conference you and your employer will take a look at preliminary evidence and determine whether or not a settlement is possible without advancing any further. If no settlement is agreed upon, your case will move on to a hearing if there is a legal basis to proceed. At the hearing you will present your evidence and witness testimony to the arbitrator and wait for a determination.
Moving Forward
If you have questions as to how to pursue a legal remedy to an employment conflict after signing an arbitration agreement, you want an attorney experienced in employment law. At HKM, we are proud to fight for justice on behalf of our clients. Contact us today for a free, confidential consultation.
