Another Benefit of Arbitration Agreements

In most circumstances, private employers benefit when they have arbitration agreements with their employees, because arbitration can resolve disputes more quickly with less expense, and the agreements may even ward off frivolous lawsuits. A recent ruling in favor of a Meyers Nave client demonstrated yet another significant benefit.

On August 6, 2021, a San Diego Superior Court Judge granted the employer’s motion to compel the arbitration of the plaintiff’s individual wage and hour claim and stayed that plaintiff’s California Private Attorneys General Act (“PAGA”) claim until after arbitration of the individual claim. The Court rejected the plaintiff’s argument that the outcome of his individual claim will have no bearing on his PAGA claim, ruling, “Although the PAGA and individual claims are conceptually independent, they both arise out of the same nucleus of facts – i.e., defendant’s alleged violations of California labor law and whether any of those violations were committed against plaintiff.”

This decision, simplifying the case for now to just one employee’s claims, rather than potentially hundreds of employees, reduces plaintiff’s leverage. Meyers Nave continues to encourage private and non-profit employers to consider the benefits of arbitration and ensure that agreements are enforceable, by regularly updating them as the law changes.

For more information, contact Meyers Nave attorneys.