Adolph v. Uber Technologies, Inc. ( 2023 )

IN THE SUPREME COURT OF
CALIFORNIA
ERIK ADOLPH,
Plaintiff and Respondent,
v.
UBER TECHNOLOGIES, INC.,
Defendant and Appellant.
S274671
Fourth Appellate District, Division Three
G059860 and G060198
Orange County Superior Court
30-2019-01103801
July 17, 2023
Justice Liu authored the opinion of the Court, in which Chief
Justice Guerrero and Justices Corrigan, Kruger, Groban,
Jenkins, and Evans concurred.
ADOLPH v. UBER TECHNOLOGIES, INC.
S274671
Opinion of the Court by Liu, J.
This case concerns a question of standing under the
Private Attorneys General Act of 2004 (PAGA). (Lab. Code,
§ 2698 et seq.; all undesignated statutory references are to this
code.) Informed by findings of pervasive underenforcement of
many Labor Code provisions and “a shortage of government
resources to pursue enforcement,” the Legislature enacted
PAGA to create new civil penalties for Labor Code violations and
“ ‘to allow aggrieved employees, acting as private attorneys
general, to recover [those] penalties.’ ” (Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 379
(Iskanian).) Specifically, PAGA authorizes “an aggrieved
employee,” acting as a proxy or agent of the state Labor and
Workforce Development Agency (LWDA), to bring a civil action
against an employer “on behalf of himself or herself and other
current or former employees” to recover civil penalties for Labor
Code violations they have sustained. (§ 2699, subd. (a); see
Iskanian, at p. 380.)
In Viking River Cruises, Inc. v. Moriana (2022) 596 U.S.
__ [142 S.Ct. 1906] (Viking River), the United States Supreme
Court considered a predispute employment contract with an
arbitration provision specifying that “in any arbitral proceeding,
the parties could not bring any dispute as a class, collective, or
representative PAGA action. It also contained a severability
clause specifying that if the waiver was found invalid, any class,
collective, representative, or PAGA action would presumptively
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Opinion of the Court by Liu, J.
be litigated in court. But under that severability clause, if any
‘portion’ of the waiver remained valid, it would be ‘enforced in
arbitration.’ ” (Id. at p. __ [142 S.Ct. at p. 1916].) In light of our
state law rule prohibiting wholesale waiver of PAGA claims
(Iskanian, supra, 59 Cal.4th at p. 383), the high court construed
the severability clause to reflect the parties’ agreement to
arbitrate any alleged Labor Code violations personally
sustained by a PAGA plaintiff — so-called “individual” claims —
and held that the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et
seq.) compels enforcement of this agreement. (Viking River, at
pp. __–__ [142 S.Ct. at pp. 1922–1925].) In so holding, the high
court declared that the FAA “preempted” a separate state law
rule that “PAGA actions cannot be divided into individual and
non-individual claims” where the parties have agreed to
arbitrate individual claims. (Viking River, at p. __ [142 S.Ct. at
p. 1913].) For consistency, we use the terms “individual” and
“non-individual” claims in accordance with the high court’s
usage in Viking River.
The question here is whether an aggrieved employee who
has been compelled to arbitrate claims under PAGA that are
“premised on Labor Code violations actually sustained by” the
plaintiff (Viking River, supra, 596 U.S. at p. __ [142 S.Ct. at
p. 1916]; see §§ 2698, 2699, subd. (a)) maintains statutory
standing to pursue “PAGA claims arising out of events involving
other employees” (Viking River, at p. __ [142 S.Ct. at p. 1916])
in court. We hold that the answer is yes. To have PAGA
standing, a plaintiff must be an “aggrieved employee” — that is,
(1) “someone ‘who was employed by the alleged violator’ ” and
(2) “ ‘against whom one or more of the alleged violations was
committed.’ ” (Kim v. Reins International California, Inc. (2020)
9 Cal.5th 73, 83, 84 (Kim), quoting § 2699, subd. (c).) Where a
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
plaintiff has brought a PAGA action comprising individual and
non-individual claims, an order compelling arbitration of the
individual claims does not strip the plaintiff of standing as an
aggrieved employee to litigate claims on behalf of other
employees under PAGA.
I.
Plaintiff Erik Adolph worked as a driver for defendant
Uber Technologies, Inc. (Uber), delivering food to customers
through the company’s Uber Eats platform. As a condition of
his employment, Adolph was required to accept the technology
services agreement, and because he did not timely opt out, he
became bound by the arbitration provision in that agreement.
The arbitration provision requires Adolph to arbitrate, on an
individual basis only, almost all work-related claims he might
have against Uber.
With regard to PAGA actions, the agreement says: “To the
extent permitted by law, you and Company agree not to bring a
representative action on behalf of others under the [PAGA] in
any court or in arbitration. This waiver shall be referred to as
the ‘PAGA Waiver.’ ” The agreement also includes a severability
clause: “If the PAGA Waiver is found to be unenforceable or
unlawful for any reason, (1) the unenforceable provision shall be
severed from this Arbitration Provision; (2) severance of the
unenforceable provision shall have no impact whatsoever on the
Arbitration Provision or the Parties’ attempts to arbitrate any
remaining claims on an individual basis pursuant to the
Arbitration Provision; and (3) any representative actions
brought under the PAGA must be litigated in a civil court of
competent jurisdiction . . . .”
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
In October 2019, Adolph sued Uber in superior court,
alleging individual and class claims for relief under Labor Code
section 2802 and the Unfair Competition Law (UCL) (Bus. &
Prof. Code, § 17200 et seq.). Adolph claimed that Uber
misclassified him and other delivery drivers as independent
contractors rather than as employees and, as a result,
wrongfully failed to reimburse them for necessary business
expenses. In February 2020, Adolph amended his complaint to
add a claim for civil penalties under PAGA based on the same
theory of misclassification. In July 2020, the trial court granted
a motion by Uber to compel arbitration of Adolph’s individual
Labor Code claims and dismissed Adolph’s class action claims.
Subsequently, with the trial court’s permission, Adolph
filed his operative second amended complaint, which eliminated
his individual Labor Code claims and class claims and retained
only his PAGA claim for civil penalties. The trial court granted
Adolph’s request for a preliminary injunction, preventing
arbitration from proceeding. Uber filed a second motion to
compel arbitration of Adolph’s independent contractor status
and the enforceability of the arbitration agreement. The trial
court denied the motion. Uber filed separate appeals of the
injunction and the denial of the second motion to compel
arbitration.
The two appeals were consolidated, and the Court of
Appeal affirmed. (Adolph v. Uber Technologies, Inc. (Apr. 11,
2022, G059860, G060198) [nonpub. opn.] (Adolph).) Citing
Iskanian, the Court of Appeal held that the trial court properly
found that PAGA claims are not subject to arbitration, that an
agreement waiving the right to bring a claim on behalf of other
employees under PAGA violates public policy and is
unenforceable, and that “California case law is clear that the
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Opinion of the Court by Liu, J.
threshold issue of whether a plaintiff is an aggrieved employee
in a PAGA case is not subject to arbitration.” (Adolph, supra,
G059860, G060198.)
In May 2022, Uber filed a petition for review. Before
Adolph could file an answer, the United States Supreme Court
decided Viking River, which abrogated in part our decision in
Iskanian, as discussed further below. (Viking River, supra, 596
U.S. at pp. __–__ [142 S.Ct. at pp. 1923–1925].) Viking River
also considered the standing question at issue in this case. (Id.
at p. __ [142 S.Ct. at p. 1925].) We granted review to provide
guidance on statutory standing under PAGA.
II.
The Legislature enacted PAGA almost two decades ago in
response to widespread violations of the Labor Code and
significant underenforcement of those laws. (See Arias v.
Superior Ct. (2009) 46 Cal.4th 969, 980 (Arias); Assem. Com. on
Labor & Employment, Analysis of Sen. Bill No. 796 (2003–2004
Reg. Sess.) as amended July 2, 2003, p. 3 (Assembly Labor
Committee Analysis).) Before PAGA’s enactment, tools for
enforcing the Labor Code were limited. Some statutes allowed
employees to sue their employers for damages resulting from
Labor Code violations such as unpaid wages. (Kim, supra, 9
Cal.5th at p. 80; Iskanian, supra, 59 Cal.4th at p. 381.) Other
Labor Code violations were punishable only as criminal
misdemeanors, which local prosecutors tended not to prioritize.
(Iskanian, at p. 379.) Additionally, several statutes provided
civil penalties for Labor Code violations, but only state labor law
enforcement agencies could bring an action for civil penalties
and those agencies lacked sufficient enforcement resources.
(Ibid.; Assembly Labor Committee Analysis, at pp. 3–4.)
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Opinion of the Court by Liu, J.
To address these shortcomings, the Legislature enacted
PAGA to create new civil penalties for various Labor Code
violations and “ ‘to allow aggrieved employees, acting as private
attorneys general, to recover [those] penalties.’ ” (Iskanian,
supra, 59 Cal.4th at p. 379.) An employee who brings a PAGA
action to recover civil penalties acts “ ‘as the proxy or agent’ ” of
the state. (Iskanian, at p. 380; see § 2699, subd. (a).) “PAGA is
designed primarily to benefit the general public, not the party
bringing the action.” (Kim, supra, 9 Cal.5th at p. 81.) Penalties
recovered are dedicated largely “to public use . . . instead of
being awarded entirely to a private plaintiff.” (Assem. Com. on
Judiciary, Analysis of Sen. Bill No. 796 (2003–2004 Reg. Sess.)
as amended May 12, 2003, p. 5 (Assembly Judiciary Committee
Analysis); see § 2699, subd. (i) [75% of civil penalties go to the
LWDA, 25% go to aggrieved employees].)
To have standing to bring a PAGA action, a plaintiff must
be an “aggrieved employee,” which the statute defines as “any
person who was employed by the alleged violator and against
whom one or more of the alleged violations was committed.”
(§ 2699, subd. (c).) An aggrieved employee becomes deputized to
prosecute Labor Code violations once he or she has complied
with PAGA’s notice requirements. (§ 2699.3, subd. (a).) Before
filing suit, the aggrieved employee “must notify the employer
and the [LWDA] of the specific labor violations alleged, along
with the facts and theories supporting the claim.” (Kim, supra,
9 Cal.5th at p. 81, citing § 2699.3, subd. (a)(1)(A).) “If the agency
does not investigate, does not issue a citation, or fails to respond
to the notice within 65 days, the employee may sue.” (Kim, at
p. 81, citing § 2699.3, subd. (a)(2).) “The notice requirement
allows the relevant state agency ‘to decide whether to allocate
scarce resources to an investigation’ ” (Kim, at p. 81) or instead
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Opinion of the Court by Liu, J.
to deputize the aggrieved employee to pursue sanctions on the
state’s behalf. Once deputized, the aggrieved employee has
authority to “seek any civil penalties the state can.” (ZB, N.A.
v. Superior Court (2019) 8 Cal.5th 175, 185 (ZB).)
A PAGA claim for civil penalties “ ‘ “is fundamentally a
law enforcement action.” ’ ” (ZB, supra, 8 Cal.5th at p. 185.)
“The ‘government entity on whose behalf the plaintiff files suit
is . . . the real party in interest.’ ” (Kim, supra, 9 Cal.5th at
p. 81.) PAGA’s default civil penalties are thus calculated “ ‘to
punish the employer’ for wrongdoing” (ZB, at p. 185) and “ ‘to
deter violations’ ” (Iskanian, supra, 59 Cal.4th at p. 379) rather
than “compensate employees for actual losses incurred” (ZB, at
p. 186). PAGA claims are subject to a one-year statute of
limitations. (Code Civ. Proc., § 340, subd. (a).) The LWDA must
be provided with prior notice of any proposed settlement, and
any final settlement requires approval by the trial court.
(§ 2699, subd. (l)(2).) “Because an aggrieved employee’s action
under [PAGA] functions as a substitute for an action brought by
the government itself, a judgment in that action binds all those,
including nonparty aggrieved employees, who would be bound
by a judgment in an action brought by the government.” (Arias,
supra, 46 Cal.4th at p. 986.)
In Iskanian, we held that a predispute categorical waiver
of the right to bring a PAGA action is unenforceable (Iskanian,
supra, 59 Cal.4th at pp. 382–383) — a rule that Viking River left
undisturbed (see Viking River, supra, 596 U.S. at pp. __–__, __–
__ [142 S.Ct. at pp. 1922–1923, 1924–1925] [the FAA does not
preempt this rule]). We explained that such waivers violate
California public policy and Civil Code sections 1668 and 3513.
(Iskanian, at pp. 383–384, quoting Civ. Code, § 1668
[prohibiting contractual waivers, whether “direct[] or indirect[],”
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Opinion of the Court by Liu, J.
that “exempt any one from responsibility for his own . . .
violation of law”] and Civ. Code, § 3513 [“a law established for a
public reason cannot be contravened by a private agreement”].)
In addition, Iskanian held unenforceable an agreement
that, while providing for arbitration of alleged Labor Code
violations sustained by the plaintiff employee (what Viking
River called individual claims), compels waiver of claims on
behalf of other employees (i.e., non-individual claims).
(Iskanian, supra, 59 Cal.4th at p. 384; see Viking River, supra,
596 U.S. at p. __ [142 S.Ct. at p. 1916].) We explained that
“whether or not an individual claim is permissible under the
PAGA, a prohibition of representative [i.e., non-individual]
claims frustrates the PAGA’s objectives.” (Iskanian, at p. 384;
see ibid. [“[W]here . . . an employment agreement compels the
waiver of representative claims under the PAGA, it is contrary
to public policy and unenforceable as a matter of state law.”].)
Viking River also left this rule intact. (Viking River, at p. __ [142
S.Ct. at p. 1925] [“Under our holding in this case [requiring
enforcement of agreements to arbitrate individual claims,
Moriana’s non-individual] claims may not be dismissed simply
because they are ‘representative.’ Iskanian’s rule remains valid
to that extent.”]; see Nickson v. Shemran, Inc. (2023) 90
Cal.App.5th 121, 306 (Nickson) [Viking River did not disturb
Iskanian’s rule that an arbitration agreement purporting to
waive an employee’s non-individual claims is unenforceable as
a matter of state law]; Seifu v. Lyft, Inc. (2023) 89 Cal.App.5th
1129, 1139 (Seifu) [same]; Piplack v. In-N-Out Burgers (2023) 88
Cal.App.5th 1281, 1288 (Piplack) [same]; Gregg v. Uber
Technologies, Inc. (2023) 89 Cal.App.5th 786, 797 (Gregg)
[same]; Mills v. Facility Solutions Group, Inc. (2022) 84
Cal.App.5th 1035, 1062–1064 [same].)
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Opinion of the Court by Liu, J.
Following our decision in Iskanian, various courts held
that employers may not require employees to “split” PAGA
actions in a manner that puts individual and non-individual
components of a PAGA claim into bifurcated proceedings. (See,
e.g., Perez v. U-Haul Co. of California (2016) 3 Cal.App.5th 408,
420–421; Williams v. Superior Court (2015) 237 Cal.App.4th
642, 649.) Viking River held that “the FAA preempts the rule of
Iskanian insofar as it precludes division of PAGA actions into
individual and non-individual claims through an agreement to
arbitrate.” (Viking River, supra, 596 U.S. at p. __ [142 S.Ct. at
p. 1924].) “The ‘principal purpose’ of the FAA is to ‘ensur[e] that
private arbitration agreements are enforced according to their
terms.’ ” (AT&T Mobility LLC v. Concepcion (2011) 563 U.S.
333, 344.) The high court explained that an anti-splitting rule
“unduly circumscribes the freedom of parties to determine ‘the
issues subject to arbitration’ and ‘the rules by which they will
arbitrate,’ [citation], and does so in a way that violates the
fundamental principle that ‘arbitration is a matter of consent.’ ”
(Viking River, at p. __ [142 S.Ct. at p. 1923].) Requiring parties
to adjudicate a PAGA action entirely in one proceeding, the high
court said, “compels parties to either go along with an
arbitration in which the range of issues under consideration is
determined by coercion rather than consent, or else forgo
arbitration altogether. Either way, the parties are coerced into
giving up a right they enjoy under the FAA.” (Viking River, at
p. __ [142 S.Ct. at p. 1924].) Thus, Viking River requires
enforcement of agreements to arbitrate a PAGA plaintiff’s
individual claims if the agreement is covered by the FAA.
III.
Against this backdrop, we consider whether an aggrieved
employee who has been compelled to arbitrate individual claims
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Opinion of the Court by Liu, J.
“premised on Labor Code violations actually sustained by” the
plaintiff (Viking River, supra, 596 U.S. at p. __ [142 S.Ct. at
p. 1916]; see Lab. Code, § 2699, subd. (a)) maintains statutory
standing to pursue non-individual “PAGA claims arising out of
events involving other employees” (Viking River, at p. __ [142
S.Ct. at p. 1916]) in court.
The high court concluded that a PAGA plaintiff loses
standing in this situation: “[A]s we see it, PAGA provides no
mechanism to enable a court to adjudicate non-individual PAGA
claims once an individual claim has been committed to a
separate proceeding. Under PAGA’s standing requirement, a
plaintiff can maintain non-individual PAGA claims in an action
only by virtue of also maintaining an individual claim in that
action. See Cal. Lab. Code Ann. §§ 2699(a), (c). When an
employee’s own dispute is pared away from a PAGA action, the
employee is no different from a member of the general public,
and PAGA does not allow such persons to maintain suit. See
Kim, 9 Cal.5th at 90 (‘PAGA’s standing requirement was meant
to be a departure from the “general public” . . . standing
originally allowed’ under other California statutes). As a result,
Moriana lacks statutory standing to continue to maintain her
non-individual claims in court, and the correct course is to
dismiss her remaining claims.” (Viking River, supra, 596 U.S.
at p. __ [142 S.Ct. at p. 1925].)
Because “[t]he highest court of each State . . . remains ‘the
final arbiter of what is state law’ ” (Montana v. Wyoming (2011)
563 U.S. 368, 378, fn. 5), we are not bound by the high court’s
interpretation of California law. (See Viking River, supra, 596
U.S. at pp. __–__ [142 S.Ct. at p. 1925] (conc. opn. of Sotomayor,
J.) [“Of course, if this Court’s understanding of state law is
wrong, California courts, in an appropriate case, will have the
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ADOLPH v. UBER TECHNOLOGIES, INC.
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last word.”].) And although the high court’s interpretations may
serve as persuasive authority in cases involving a parallel
federal constitutional provision or statutory scheme (cf., e.g.,
Raven v. Deukmejian (1990) 52 Cal.3d 336, 353; People v.
Teresinski (1982) 30 Cal.3d 822, 835–836), Viking River does not
interpret any federal provision or statute similar to PAGA.
Where, as here, a cause of action is based on a state
statute, standing is a matter of statutory interpretation. (Kim,
supra, 9 Cal.5th at p. 83.) “We review questions of statutory
construction de novo.” (California Building Industry Assn. v.
State Water Resources Control Bd. (2018) 4 Cal.5th 1032, 1041.)
A.
“In construing a statute, our task is to ascertain the intent
of the Legislature so as to effectuate the purpose of the
enactment.” (Cummins, Inc. v. Superior Court (2005) 36 Cal.4th
478, 487.) We look first to “the words of the statute, which are
the most reliable indications of the Legislature’s intent.” (Ibid.)
As noted, section 2699, subdivision (c) defines “aggrieved
employee,” and we have explained that “[t]he plain language of
section 2699(c) has only two requirements for PAGA standing.”
(Kim, supra, 9 Cal.5th at p. 83.) The plaintiff must allege that
he or she is (1) “someone ‘who was employed by the alleged
violator’ ” and (2) someone “ ‘against whom one or more of the
alleged violations was committed.’ ” (Id. at pp. 83–84, quoting
§ 2699, subd. (c).)
In Kim, we declined to impose additional requirements not
found in the statute. (Kim, supra, 9 Cal.5th at pp. 84–91.) The
plaintiff, Kim, sued his employer, alleging individual claims for
damages and a PAGA claim for civil penalties. (Kim, at p. 82.)
Kim settled and dismissed the individual claims for damages,
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proceeding only with the PAGA claim. (Kim, at p. 82.) The
employer conceded that Kim had PAGA standing when he filed
suit but argued that Kim’s “standing somehow ended” once his
individual claims settled. (Kim, at p. 84.) According to the
employer, PAGA standing is premised on an unredressed injury,
and because Kim received compensation for his injury, he no
longer had the status of an “aggrieved employee.” (Kim, at
p. 84.)
We rejected this argument, finding it inconsistent with the
statutory language in several respects. (Kim, supra, 9 Cal.5th
at pp. 83–86.) First, “[t]he Legislature defined PAGA standing
in terms of violations . . . . Kim became an aggrieved employee,
and had PAGA standing, when one or more Labor Code
violations were committed against him,” and “[s]ettlement did
not nullify these violations. The remedy for a Labor Code
violation, through settlement or other means, is distinct from
the fact of the violation itself,” and only the latter is required for
PAGA standing. (Kim, at p. 84.) Second, nothing in the text of
the statute requires the plaintiff to have an unredressed injury;
reading such a requirement into the statute would be “at odds
with the statutory definition.” (Id. at p. 85.) Third, allowing
post-violation events to strip an aggrieved employee of the
ability to pursue a PAGA claim “would add an expiration
element to the statutory definition of standing.” (Kim, at p. 85.)
Although Uber says Kim is distinguishable because the plaintiff
had settled only individual claims for damages and not any
claim for civil penalties under PAGA, this circumstance played
no role in Kim’s reasoning. Kim made clear that only the fact of
a violation is required to confer standing.
The Court of Appeal in Johnson v. Maxim Healthcare
Services, Inc. (2021) 66 Cal.App.5th 924 (Johnson) similarly
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declined to read into the statute a standing requirement not
supported by its language. There, a company required its
workers to sign unlawful noncompete agreements. (Id. at
p. 927.) The Labor Code violations sustained by the plaintiff
were time-barred, and the employer argued that the plaintiff
therefore did not have PAGA standing. (Johnson, at p. 929.)
Relying on Kim, the court rejected this argument and held that
the plaintiff had standing to pursue her PAGA claim because
she satisfied the statutory definition of an “ ‘aggrieved
employee.’ ” (Johnson, at p. 930.) The fact that the plaintiff’s
“individual claim may be time-barred does not nullify the
alleged Labor Code violations nor strip [the plaintiff] of her
standing to pursue PAGA remedies.” (Johnson, at p. 930.)
As Kim and Johnson make clear, a worker becomes an
“aggrieved employee” with standing to litigate claims on behalf
of fellow employees upon sustaining a Labor Code violation
committed by his or her employer. (See Kim, supra, 9 Cal.5th
at pp. 84–85; Johnson, supra, 66 Cal.App.5th at p. 930; § 2699,
subd. (c).) Standing under PAGA is not affected by enforcement
of an agreement to adjudicate a plaintiff’s individual claim in
another forum. Arbitrating a PAGA plaintiff’s individual claim
does not nullify the fact of the violation or extinguish the
plaintiff’s status as an aggrieved employee, any more than the
time-barring of remedies did in Johnson or the settlement of the
individual damages claims did in Kim. (See Kim, at pp. 84–85;
Johnson, at p. 930.) The operative complaint alleges that
Adolph experienced Labor Code violations while driving for
Uber. Under Kim, Adolph’s allegations that Labor Code
violations were committed against him while he was employed
by Uber suffice to confer standing to bring a PAGA action.
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B.
Five recent Court of Appeal opinions have reached the
same conclusion. (Galarsa v. Dolgen California, LLC (2023) 88
Cal.App.5th 639, 653 (Galarsa) [“[A] plaintiff’s PAGA standing
does not evaporate when an employer chooses to enforce an
arbitration agreement.”]; Seifu, supra, 89 Cal.App.5th at p. 1134
[“[A] plaintiff is not stripped of standing to pursue nonindividual
PAGA claims simply because his or her individual PAGA claim
is compelled to arbitration.”]; Piplack, supra, 88 Cal.App.5th at
p. 1291 [“[P]aring away the plaintiff’s individual claims does not
deprive the plaintiff of standing to pursue representative claims
under PAGA . . . .”]; Gregg, supra, 89 Cal.App.5th at p. 792
[“[U]nder California law, Gregg is not stripped of standing to
pursue his nonindividual claims in court simply because his
individual claim must be arbitrated.”]; Nickson, supra, 90
Cal.App.5th at pp. 134–135 [“Nickson has standing to litigate
nonindividual PAGA claims in the superior court
notwithstanding his agreement to arbitrate individual PAGA
claims.”].) This unanimity is unsurprising because our reading
of PAGA’s standing requirements not only follows from the
statute’s text but also aligns with its purpose and legislative
history.
“The Legislature’s sole purpose in enacting PAGA was ‘to
augment the limited enforcement capability of the [LWDA] by
empowering employees to enforce the Labor Code as
representatives of the Agency.’ ” (Kim, supra, 9 Cal.5th at p. 86,
quoting Iskanian, supra, 59 Cal.4th at p. 383.) To this end, “the
Legislature conferred fairly broad standing on all plaintiffs who
were employed by the violator and subjected to at least one
alleged violation.” (Kim, at p. 91.) A narrower construction of
PAGA standing would “thwart the Legislature’s clear intent to
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deputize employees to pursue sanctions on the state’s behalf.”
(Kim, at p. 91; see Williams v. Superior Court (2017) 3 Cal.5th
531, 548 [“Hurdles that impede the effective prosecution of
representative PAGA actions undermine the Legislature’s
objectives.”]; Galarsa, supra, 88 Cal.App.5th at p. 653
[“Revoking an employee’s standing as to [non-individual] claims
would ‘severely curtail[] PAGA’s availability to police Labor
Code violations.’ [(Kim, at p. 91.)]”]; see also Kim, at p. 83
[“Considering the remedial nature of legislation meant to
protect employees, we construe PAGA’s provisions broadly, in
favor of this protection.”].)
The centerpiece of PAGA’s enforcement scheme is the
ability of a plaintiff employee to prosecute numerous Labor Code
violations committed by an employer and to seek civil penalties
corresponding to those violations. (Iskanian, supra, 59 Cal.4th
at p. 384; Assembly Judiciary Committee Analysis, supra, at
p. 4.) The Legislature enacted PAGA on the premise that Labor
Code violations sustained by the plaintiff employee are often
only a fraction of the violations committed by an employer that
is engaged in unlawful workplace practices. (Iskanian, at
p. 384.) As we explained in Kim, “PAGA standing is not
inextricably linked to the plaintiff’s own injury. Employees who
were subjected to at least one unlawful practice have standing
to serve as PAGA representatives even if they did not personally
experience each and every alleged violation. (§ 2699(c).) This
expansive approach to standing serves the state’s interest in
vigorous enforcement.” (Kim, supra, 9 Cal.5th at p. 85.) An
interpretation of the statute that impedes an employee’s ability
to prosecute his or her employer’s violations committed against
other employees would undermine PAGA’s purpose of
augmenting enforcement of the Labor Code. (Kim, at p. 86.)
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
In enacting PAGA, the Legislature also expressed an
intent to remedy the LWDA’s long-standing funding
deficiencies. (See, e.g., Assembly Judiciary Committee Analysis,
supra, at p. 4 [“ ‘SB 796 helps generate revenues to the state at
a time when we need them.’ ”].) Seventy-five percent of civil
penalties recovered in PAGA actions are statutorily allocated to
the state to help fund the LWDA in carrying out its regulatory
responsibilities related to covered employers, without passing
those costs on to taxpayers or diverting funds from other
priorities. (§ 2699, subd. (i).) Narrowing PAGA standing in the
manner Uber urges would likely reduce state revenues and
increase state costs of enforcement.
In sum, where a plaintiff has filed a PAGA action
comprised of individual and non-individual claims, an order
compelling arbitration of individual claims does not strip the
plaintiff of standing to litigate non-individual claims in court.
This “is the interpretation of PAGA that best effectuates the
statute’s purpose, which is ‘to ensure effective code
enforcement.’ ” (Galarsa, supra, 88 Cal.App.5th at p. 654,
quoting Kim, supra, 9 Cal.5th at p. 87.)
IV.
Uber makes several arguments in urging that a PAGA
plaintiff loses standing to litigate non-individual claims in court
when the plaintiff’s individual claims are subject to arbitration.
None is persuasive.
A.
First, Uber contends that unless Adolph’s non-individual
claims are dismissed, his PAGA action will run afoul of Viking
River because he will be permitted to relitigate whether he is an
aggrieved employee in court to establish standing even if he has
16
ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
agreed to resolve that issue in arbitration as part of his
individual PAGA claim.
In response, Adolph explains that his PAGA action could
proceed in the following manner if he were ordered to arbitrate
his individual PAGA claim: First, the trial court may exercise
its discretion to stay the non-individual claims pending the
outcome of the arbitration pursuant to section 1281.4 of the
Code of Civil Procedure. Following the arbitrator’s decision, any
party may petition the court to confirm or vacate the arbitration
award under section 1285 of the Code of Civil Procedure. If the
arbitrator determines that Adolph is an aggrieved employee in
the process of adjudicating his individual PAGA claim, that
determination, if confirmed and reduced to a final judgment
(Code Civ. Proc., § 1287.4), would be binding on the court, and
Adolph would continue to have standing to litigate his non-
individual claims. If the arbitrator determines that Adolph is
not an aggrieved employee and the court confirms that
determination and reduces it to a final judgment, the court
would give effect to that finding, and Adolph could no longer
prosecute his non-individual claims due to lack of standing. (See
Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65, 76–
82.)
Uber makes no convincing argument why this manner of
proceeding would be impractical or would require relitigating
Adolph’s status as an aggrieved employee in the context of his
non-individual claims, and we see no basis for Uber’s concern.
In any event, Viking River makes clear that in cases where the
FAA applies, no such relitigation may occur. (Viking River,
supra, 596 U.S. at pp. __–__ [142 S.Ct. at pp. 1923–1925].)
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
B.
Next, Uber contends that bifurcating individual and non-
individual components of a PAGA claim into arbitration and court
proceedings has the effect of severing the two components into
separate and distinct actions, and each of the resulting two
actions must independently satisfy PAGA’s standing
requirements. Because the plaintiff’s standalone action for non-
individual claims no longer seeks penalties for Labor Code
violations sustained by the plaintiff, Uber says, the plaintiff
cannot satisfy PAGA’s standing requirements.
In urging this view, Uber relies on cases interpreting a
long-superseded statute, the pre-1971 version of section 1048 of
the Code of Civil Procedure, which provided that “[a]n action
may be severed . . . in the discretion of the court, whenever it
can be done without prejudice to a substantial right.” Uber does
not explain why pursuing some remedies in arbitration and
others in court requires the PAGA action to be treated like an
action severed under that statute. Moreover, because former
section 1048 does not authorize severance that would result in
“prejudice to a substantial right,” it is doubtful the statute would
apply here.
Nothing in PAGA or any other relevant statute suggests
that arbitrating individual claims effects a severance. When a
case includes arbitrable and nonarbitrable issues, the issues
may be adjudicated in different forums while remaining part of
the same action. Code of Civil Procedure section 1281.4 states
that upon “order[ing] arbitration of a controversy which is an
issue involved in an action,” the court should “stay the action.”
It further provides that “[i]f the issue which is the controversy
subject to arbitration is severable, the stay may be with respect
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
to that issue only.” Section 1281.4 does not contemplate that
the compelled arbitration of an issue in controversy in the action
is a separate action. The statute makes clear that the cause
remains one action, parts of which may be stayed pending
completion of the arbitration. (See Cuevas v. Truline Corp.
(2004) 118 Cal.App.4th 56, 61 [citing Code Civ. Proc., § 1281.4
in holding that plaintiffs did not “split a cause of action into
multiple lawsuits” by “fil[ing] one complaint in which they sued
everyone they believed responsible for the traffic accident” and
then “arbitrat[ing] their claims against some, but not all, of the
defendants”].)
Indeed, it is a regular and accepted feature of litigation
governed by the FAA that the arbitration of some issues does
not sever those issues from the remainder of the lawsuit. The
high court has long recognized that the FAA “requires piecemeal
resolution [of related disputes in different forums] when
necessary to give effect to an arbitration agreement.” (Moses H.
Cone Hospital v. Mercury Constr. Corp. (1983) 460 U.S. 1, 20.)
In Dean Witter Reynolds Inc. v. Byrd (1985) 470 U.S. 213, 217,
the high court held that the FAA requires arbitrable claims to
be compelled to arbitration “even where the result would be the
possibly inefficient maintenance of separate proceedings in
different forums.” Viking River reiterated that parties may opt
for arbitration procedures that depart from standard liberal
rules of claim joinder, “[a]nd that is true even if bifurcated
proceedings are an inevitable result.” (Viking River, supra, 596
U.S. at p. ___ [142 S.Ct. at p. 1923] [citing Dean Witter and
Moses H. Cone Hospital].) When an action includes arbitrable
and nonarbitrable components, the resulting bifurcated
proceedings are not severed from one another; rather, the court
may “stay the trial of the action until such arbitration has been
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
had in accordance with the terms of the agreement.” (9 U.S.C.
§ 3; see Code Civ. Proc., § 1281.4.) In McGill v Citibank, N.A.
(2017) 2 Cal.5th 945, 966, we explained that this principle
extends to “piecemeal litigation of ‘arbitrable and inarbitrable
remedies derived from the same statutory claim.’ ”
Further, Uber’s interpretation runs counter to the
statutory scheme. (Kim, supra, 9 Cal.5th at p. 87.) PAGA was
designed to authorize aggrieved employees to pursue
enforcement actions on behalf of themselves and their current
and former coworkers. (§ 2699, subd. (a).) Under Uber’s
reading, any time an aggrieved employee has signed a
predispute agreement to arbitrate individual claims, he or she
would no longer be able to bring suit “on behalf of himself or
herself and other current or former employees.” (Ibid., italics
added.) Not only is this interpretation at odds with the language
and purpose of the statute, but it would also seriously impair
the state’s ability to collect and distribute civil penalties under
the provisions of the statute. (See § 2699, subds. (i), (f)(2)
[employers are penalized per violation for each aggrieved
employee, and most of the penalties go to the state].) As noted,
Viking River left intact Iskanian’s rule against agreements that
compel waiver of non-individual claims. (Viking River, at p. __
[142 S.Ct. at p. 1925]; see Iskanian, supra, 59 Cal.4th at p. 384.)
C.
Uber also argues that PAGA contains a third standing
requirement — the action must “be . . . brought by an aggrieved
employee on behalf of himself or herself and other current or
former employees” (§ 2699, subd. (a)) — and that Adolph cannot
satisfy this requirement with respect to non-individual claims
upon being compelled to arbitrate individual claims.
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
But even if we were to agree with Uber’s reading of the
statute, Adolph would have standing. Adolph filed a PAGA
complaint seeking recovery “on behalf of himself . . . and other
current or former employees.” (§ 2699, subd. (a).) “Even though
Viking [River] requires the trial court to bifurcate and order
individual PAGA claims to arbitration when an appropriate
arbitration agreement exists, the individual PAGA claims in
arbitration remain part of the same lawsuit as the
representative claims remaining in court. Thus, plaintiffs are
pursuing a single PAGA action ‘on behalf of [themselves] and
other current or former employees,’ albeit across two fora.”
(Piplack, supra, 88 Cal.App.5th at p. 1292.)
D.
Next, Uber contends that a PAGA plaintiff must have a
“financial stake in the outcome of the case” and that if an
arbitrator grants an award to the plaintiff based on his or her
personally sustained violations, the plaintiff loses standing to
litigate non-individual claims because he or she has no financial
stake in those claims.
For purposes of standing, however, the statute does not
require a PAGA plaintiff who has alleged one or more personally
sustained violations to seek civil penalties for those violations in
the same forum as the litigation of non-individual claims. As
the Attorney General observes in his amicus curiae brief, “it is
not the promise of economic recovery — in court or elsewhere —
that gives an aggrieved employee standing to pursue PAGA
claims based on violations committed against other workers.”
We agree with Adolph that “it is plaintiff’s status as an
aggrieved employee, not the redressability of any injury the
plaintiff may have suffered, that determines the availability of
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
PAGA standing.” The Legislature clearly delineated PAGA’s
standing requirements, and “ ‘ “ ‘[w]here the words of the
statute are clear, we may not add to or alter them to accomplish
a purpose that does not appear on the face of the statute or from
its legislative history.’ ” ’ ” (Kim, supra, 9 Cal.5th at p. 85.)
We also note that a PAGA plaintiff compelled to arbitrate
individual claims may have a personal stake in the litigation of
non-individual claims. For instance, PAGA has a provision for
recovery of attorney’s fees and costs. (§ 2699, subd. (g)(1).) This
provision may help plaintiffs secure representation by enticing
attorneys to take cases they might not have if limited to
recovering fees and costs for individual claims alone.
E.
Uber further argues that a PAGA plaintiff, upon
arbitrating personally sustained Labor Code violations, stands
in no different position than a member of the general public with
regard to non-individual claims. “General public” standing once
existed under the UCL and allowed individuals with no ties to
the unlawful conduct to bring suit. (Kim, supra, 9 Cal.5th at
p. 90.) In order to curb abusive litigation, the Legislature
designed PAGA standing to be narrower than general public
standing. (Kim, at p. 90.) An “aggrieved employee” under
PAGA is not merely a member of the general public; an
“aggrieved employee” is an individual who worked for the
alleged violator and personally sustained at least one Labor
Code violation. (§ 2699, subd. (c); see Kim, at p. 90, quoting Sen.
Com. on Judiciary, Analysis of Sen. Bill No. 796 (2003–2004
Reg. Sess.) as amended Apr. 22, 2003, p. 7.) An employee who
has met these requirements upon bringing a PAGA action does
not lose standing to litigate non-individual claims by virtue of
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ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
being compelled to arbitrate individual claims. This is true even
if the employee obtains redress for individual claims in
arbitration. (See Kim, at p. 84.)
F.
Uber also cites a number of authorities, but none supports
its position. In Amalgamated Transit Union, Local 1756, AFL-
CIO v. Superior Court (2009) 46 Cal.4th 993, 1005, we held that
unions do not have standing under PAGA because they are “not
employees” and therefore “cannot satisfy the express standing
requirements of [PAGA].” Our rejection of associational
standing under PAGA has no bearing on the question here. In
Robinson v. Southern Counties Oil Co. (2020) 53 Cal.App.5th
476, the court held that a plaintiff did not have standing when
he brought a PAGA action “based on violations alleged to have
occurred after . . . [he] was no longer employed by [the
defendant].” (Id. at p. 484.) There, the plaintiff “was not
affected by any of the alleged violations” at issue in the case.
(Ibid.) In this case, the operative complaint alleges that Adolph
was employed by Uber and personally sustained one or more
Labor Code violations committed by Uber during the time period
applicable to his PAGA action.
Uber also relies on Californians for Disability Rights v.
Mervyn’s, LLC (2006) 39 Cal.4th 223, where we said that “[f]or
a lawsuit properly to be allowed to continue, standing must exist
at all times until judgment is entered and not just on the date
the complaint is filed.” (Id. at pp. 232–233.) Our holding today
is consistent with Mervyn’s. As we explained in Kim, the
question of standing is governed by the terms of PAGA. Because
a single action may still be maintained when issues comprising the
action have been bifurcated into judicial and arbitral forums, the
23
ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
relevant statutory standing requirements are met “on the date the
complaint is filed” and thereafter, regardless of whether an
aggrieved employee’s individual claims have been sent to
arbitration. (Mervyn’s, at p. 233.)
G.
Finally, Uber and amicus curiae United States Chamber
of Commerce suggest that a PAGA plaintiff subject to an
arbitration agreement breaches that agreement by filing suit in
court. But if a defendant believes arbitration is required, it is
“[t]he party seeking arbitration [that] bears the burden of
proving the existence of an arbitration agreement” in court.
(Pinnacle Museum Tower Assn. v. Pinnacle Market Development
(US), LLC (2012) 55 Cal.4th 223, 236.) And even where a
plaintiff concedes the applicability of an arbitration agreement,
the plaintiff does not breach the agreement by alleging in a
complaint that one or more violations were committed against
the plaintiff for the purpose of meeting PAGA’s standing
requirements.
Several amici curiae have also argued that we should
narrow the statute’s standing requirements in order to curb
alleged abuses of PAGA. These arguments are best directed to
the Legislature, which may amend the statute to limit PAGA
enforcement if it chooses. Our task is to give effect to the statute
as we find it. Under the statute, a plaintiff who files a PAGA
action with individual and non-individual claims does not lose
standing to litigate the non-individual claims in court simply
because the individual claims have been ordered to arbitration.
CONCLUSION
We reverse the judgment of the Court of Appeal and
remand the case for further proceedings consistent with this
24
ADOLPH v. UBER TECHNOLOGIES, INC.
Opinion of the Court by Liu, J.
opinion. We limited our review to the question of PAGA
standing and express no view on the parties’ arguments
regarding the proper interpretation of the arbitration
agreement.
LIU, J.
We Concur:
GUERRERO, C. J.
CORRIGAN, J.
KRUGER, J.
GROBAN, J.
JENKINS, J.
EVANS, J.
25
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.
Name of Opinion Adolph v. Uber Technologies, Inc.
__________________________________________________________
Procedural Posture (see XX below)
Original Appeal
Original Proceeding
Review Granted (published)
Review Granted (unpublished) XX NP opn. filed 4/11/22 – 4th
Dist., Div. 3
Rehearing Granted
__________________________________________________________
Opinion No. S274671
Date Filed: July 17, 2023
__________________________________________________________
Court: Superior
County: Orange
Judge: Kirk H. Nakamura
__________________________________________________________
Counsel:
Littler Mendelson, Anthony G. Ly, Sophia B. Collins, Andrew M.
Spurchise; Gibson, Dunn & Crutcher, Theane D. Evangelis, Blaine H.
Evanson and Bradley J. Hamburger for Defendant and Appellant.
Elizabeth Milito, Rob Smith; Benbrook Law Group, Bradley A.
Benbrook and Stephen M. Duvernay for National Federation of
Independent Business Small Business Legal Center as Amicus Curiae
on behalf of Defendant and Appellant.
Fisher & Phillips, Alden J. Parker, Erin J. Price; and Angelo I. Amador
for Restaurant Law Center and California Restaurant Association as
Amici Curiae on behalf of Defendant and Appellant.
Akin Gump Strauss Hauer & Feld, Jonathan P. Slowik, Aileen M.
McGrath and Rachel O. Kane for Retail Litigation Center, Inc., and the
National Retail Federation as Amici Curiae on behalf of Defendant and
Appellant.
Manatt, Phelps & Phillips, Benjamin G. Shatz; and Fred J. Hiestand
for Civil Justice Association of California as Amicus Curiae on behalf
of Defendant and Appellant.
Greines, Martin, Stein & Richland and Jeffrey E. Raskin for
Californians for Fair Pay and Employer Accountability as Amicus
Curiae on behalf of Defendant and Appellant.
O’Melveny & Myers, Anton Metlitsky, Apalla U. Chopra, Adam J. Karr
and Jason Zarrow for Employers Group and California Employment
Law Council as Amici Curiae on behalf of Defendant and Appellant.
Mayer Brown, Andrew J. Pincus, Kevin Ranlett, Carmen Longoria-
Green and Archis A. Parasharami for the Chamber of Commerce of the
United States of America as Amicus Curie on behalf of Defendant and
Appellant.
Desai Law Firm, Aashish Y. Desai, Maria Adrianne De Castro;
Altshuler Berzon, Michael Rubin, Robin S. Tholin; Goldstein, Borgen,
Dardarian & Ho, Andrew P. Lee, David Borgen and Mengfei Sun for
Plaintiff and Respondent.
Rob Bonta, Attorney General, Michael J. Mongan, State Solicitor
General, Janill L. Richards, Principal Deputy State Solicitor General,
and Nichole Welindt, Associate Deputy State Solicitor General, for the
Attorney General of California as Amicus Curiae on behalf of Plaintiff
and Respondent.
Soderstrom Law and Jamin S. Soderstrom for Lionel Harper as
Amicus Curiae on behalf of Plaintiff and Respondent.
Cynthia L. Rice, Reina Canale, Corrie Meals, Sandra Aguila; and
Verónica Meléndez for California Rural Legal Assistance, Inc., and
California Rural Legal Assistance Foundation as Amici Curiae on
behalf of Plaintiff and Respondent.
Counsel who argued in Supreme Court (not intended for
publication with opinion):
Theane D. Evangelis
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, CA 90071
(213) 229-7000
Michael Rubin
Altshuler Berzon LLP
177 Post Street, Suite 300
San Francisco, CA 94108
(415) 421-7151