A contractual arbitration clause may not be avoided by the allegation of “private attorney general” claims that are not arbitrable on public policy grounds in conjunction with claims raised on an individual basis that would otherwise clearly be subject to arbitration. A plaintiff claiming to have suffered harm as a result of misclassification as an independent contractor rather than as an employee raised a “smorgasbord of claims … in a mix of capacities,” including as an individual, a putative class representative, and a private attorney general under California’s Private Attorneys General Act (“PAGA”).
The contract between the plaintiff and his employer provided that arbitration will occur on only an individual basis and expressly waived claims as a representative. However, California law prohibits PAGA claims from being waived in such a manner. The plaintiff argued that because the PAGA claims could not be submitted to arbitration, his related individual and class representative claims should not be arbitrated either. The Ninth Circuit disagreed. The court simply restricted the contractual arbitration provision from applying to the PAGA claims and ruled that arbitration should be compelled on the other claims. Furthermore, the court held that the PAGA claims should be stayed until the arbitration of the plaintiff’s individual claims made a critical determination. Depending on the outcome of that determination, the plaintiff may be allowed to pursue his PAGA claims in district court. , Case No. 15-56951 (9th Cir. Nov. 24, 2017).