Adolph v. Uber: Expanded Access to the Courts for Workers Under PAGA
On July 17, 2023, the California Supreme Court issued two important opinions that expanded access to the California state courts, the first for employees who have suffered violations of the California Labor Code (Adolph) and the second for organizations challenging unlawful, unfair or fraudulent business practices by corporate defendants (CMA v. Aetna, see here). Altshuler Berzon LLP attorneys successfully argued both cases.
In Adolph v. Uber Technologies, Inc., Justice Goodwin Liu held for a unanimous Supreme Court that a plaintiff seeking civil penalties on behalf of the State labor agency under California’s Labor Code Private Attorney General Act (“PAGA”) retains standing to pursue such penalties, calculated on the basis of Labor Code violations committed against herself and all other aggrieved employees, even if her own PAGA claim has been compelled to “individual” arbitration.
This is a huge victory for the millions of California workers covered by forced arbitration agreements, because it rejects the portion of the June 2022 decision of the U.S Supreme Court in Viking River Cruises, Inc. v. Moriana, 142 S.Ct. 1906 (2022), that had construed California law as stripping PAGA plaintiffs of standing to sue on behalf of others once their individual PAGA claims were compelled to arbitration. Because that portion of the Viking River Cruises decision rested on state rather than federal law, it was not binding on the California Supreme Court, which held in Adolph – just 13 months after the U.S. Supreme Court’s ruling – that “[b]ecause ‘[t]he highest court of each State . . . remains “the final arbiter of what is state law,”’ we are not bound by the high court’s interpretation of California law.”
After carefully reviewing the text and legislative purpose of PAGA, the California Supreme Court in Adolph concluded that the California Legislature had intended to preserve PAGA plaintiffs’ standing to pursue the individual and non-individual components of their claims for civil penalties, even if compelled to split those claims between court and arbitration. While the U.S. Supreme Court’s characterization of California law in Viking River Cruises would have gutted PAGA, effectively eliminating the civil penalties that were so crucial to accomplishing the twin statutory goals of deterrence and punishment, the California Supreme Court’s Adolph decision ensures that PAGA will remain a vital tool for workers and their representatives seeking to achieve workplace justice and full compliance with the workers’ Labor Code rights.
The Desai Law Firm and Goldstein, Borgen, Dardarian & Ho also represented the plaintiff in Adolph. The decision is available here.