In March 2023, a California appeals court issued a published decision protecting employees’ right to pursue group Labor Code claims in court, even when their individual claims are sent to arbitration.
The Case
In late 2019, former In-N-Out employees sued under the Private Attorneys General Act (PAGA). They alleged the company required workers to buy and wear specific clothing, and to buy special cleaning products to maintain it, without paying them back for either. Aiman-Smith & Marcy attorneys Randall B. Aiman-Smith, Reed W.L. Marcy, Hallie Von Rock, and Brent A. Robinson represented the workers.
The Legal Question
In 2022, the U.S. Supreme Court’s Viking River Cruises decision changed the landscape. It allowed employers to split off the individual part of a PAGA claim and send it to arbitration. It also suggested that once that happens, the worker loses standing to pursue claims for coworkers in court. In-N-Out argued that the workers’ representative claims should be dismissed.
What the Court Held
The Court of Appeal, Fourth District, Division Three, disagreed. It held that it was bound by the California Supreme Court’s decision in Kim v. Reins International, and that workers keep standing to pursue representative PAGA claims in court even when their individual claims go to arbitration. The court explained it could not reconcile Viking River’s standing analysis with Kim.
The court sent Tom Piplack’s individual claim to arbitration. It returned Donovan Sherrod’s case to the trial court to decide whether he had validly canceled an arbitration agreement he signed before turning 18. It also directed the trial court to deny arbitration of the representative claims.
What Came Next
The California Supreme Court granted review in June 2023 and put the case on hold while it decided Adolph v. Uber Technologies. In Adolph, the Supreme Court adopted the same view of standing. In September 2023, it dismissed review and sent the case back to the Court of Appeal.
Why It Matters
For California workers, the takeaway is simple: signing an arbitration agreement does not erase the right to hold an employer accountable on behalf of coworkers under PAGA.
Required to buy uniforms, tools, or supplies for work? Contact Aiman-Smith & Marcy for a free consultation at (510) 760-7005.
Source: Piplack v. In-N-Out Burgers (2023) 88 Cal.App.5th 1281, California Court of Appeal, Fourth District, Division Three.