Can Lyft make the drive to arbitration? 'Piqued' CA appeals court says no

Last issue, we reported on a scathing California Court of Appeal decision against Uber and Lyft approving a broad injunction that required them to treat their drivers as employees. The giant transportation companies were then saved by the ballot, as Proposition 22 tossed out the previous case law and statutes requiring them to do so (see "Prop 22 allows Uber and Lyft to classify drivers as independent contractors" in our November 9, 2020, issue). Now, Lyft takes on one of the other restrictions state law puts on employers, voiding arbitration agreements that cover Private Attorneys General Act (PAGA) claims. Will Lyft be as successful this time around?

Battle of two supreme courts

For decades, the California Supreme Court and the U.S. Supreme Court have been at odds over various employment arbitration rulings:

• The Federal Arbitration Act (FAA) favors arbitration and generally strikes any state-spawned restriction on arbitration agreements that don't apply to contracts generally.
• On the other hand, California law protects an employee's right to a court remedy, and our courts will void arbitration agreements they deem unconscionable in that context.

Therefore, unlike the rest of the country, employment arbitration in California provides a number of rights for employees, and if the arbitration agreement doesn't include those rights, it may be deemed unenforceable.