PAGA cases can't be arbitrated (and we mean it this time!)

In 2014, in the case of Iskanian v. CLS Transportation, the California Supreme Court first held that claims under California's Private Attorneys General Act (PAGA) aren't waivable or arbitrable. Since then, employers have valiantly tried many creative arguments in attempts to get around that holding, only to be shot down time and time again. In the following case, yet another creative attempt was met with hostility by a California court.

Trial court sends PAGA case to arbitration

The PAGA authorizes an "aggrieved employee" to bring an action on behalf of himself and other current or former employees. The Act defines an "aggrieved employee" as "any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed." California case law makes clear that in a PAGA case, aggrieved employees sue on behalf of the state of California, which remains the real party in interest.

Zum Services, Inc., is a transportation service that allows customers to schedule rides for children using its website or phone application. Upon logging in for the first time, new Zum drivers are expected to sign the company's "Terms of Service Agreement," which contains an arbitration provision.

Zum drivers Robina Contreras and Gabriel Ets-Hokin filed suit against the company under the PAGA, alleging it misclassified them as independent contractors, thereby violating multiple provisions of the California Labor Code. Zum asked the trial court to compel arbitration, and the court granted the company's request.