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Viking River Cruises, Inc. v. Moriana: Impact on Employment Arbitration Agreements and PAGA Claims

California employers with arbitration agreements may breathe a bit easier with the recent U.S. Supreme Court decision in Viking River Cruises, Inc. v. Moriana.[1] The Viking River Court found that an employees individual claims under the California Labor Code must be submitted to arbitration, if the employee agrees to submit those claims to arbitration, even if the employee files a lawsuit in civil court asserting a California Private Attorneys General Act (“PAGA”)[2] claim.  The Viking River Cruise decision overturns a longstanding rule under California law that PAGA claims must be litigated in civil court even if the plaintiff agreed to submit his or her individual Labor Code claims to arbitration. With this recent decision, employers should reevaluate the benefits of having an arbitration agreement because Viking River makes the enforcement of arbitration agreements much stronger, even in the face of a PAGA claim. 

The ruling in Viking River applied to an employment contract that contained an arbitration clause. In Viking River, an employer and employee signed an arbitration agreement that contained both a
Class Action Waiver”[3] and a severability clause.[4]  The portion of the employer’s “Class Action Waiver” related to PAGA representative actions was deemed invalid, but the severability clause protected the remaining terms of the arbitration agreement -- specifically that the employee consented to arbitrate his or her individual claims. Viking River ruled that when an employee brings a PAGA claim and is subject to a valid arbitration agreement, the employer may force the employees individual claims to be adjudicated in arbitration.  As such, the employees individual claims are separated from the representative PAGA claim. The Viking River Court even went one step further and opined that an employee who must arbitrate his or her individual Labor Code violations will lose standing for the  PAGA claim, finding “PAGA provides no mechanism to enable a court to adjudicate non-individual PAGA claims once any individual claim has been committed to a separate proceeding.” [5] 

The Viking River decision effectively overturned, in part, the California Supreme Court decision in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348.  Viking River concluded that the Federal Arbitration Act (“FAA”) preempts Iskanian’s rule insofar as it precludes the division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.  Viking River found that the Iskanian decision interferes with the principle that arbitration is a matter of consent because it allows a single party (i.e., the employee) to control which claims are subject to arbitration.  In effect, the employee could avoid arbitrating the individual claims that she agreed to arbitrate simply by attaching a representative PAGA claim.

An Employee’s Right To Bring a PAGA Action May Not Be Waived

The U.S. Supreme Court’s decision in Viking River does not impact the entire decision in Iskanian. Under Iskanian, an employee’s right to bring a PAGA action remains intact.  This means that an employment agreement between employers and employees that forces employees to completely waive their right to bring a representative claim under PAGA is unenforceable under California state law.  Viking River does not change this portion of the Iskanian decision.

What Viking River does change is whether employees would have standing for their representative PAGA claims, if their individual claims proceeded to arbitration. Under PAGA, the Viking River Court determined that an employee has standing for a representative PAGA claim only if she maintains an individual claim in that action. If not, the employee lacks standing to maintain her non-individual PAGA claims in court. This decision, however, may be a short-term win for employers if the California Legislature modifies the current PAGA legislation to protect employees who may lose standing for their representative claims.

What Should Employers Takeaway From the Viking River Decision?

As a result of the Viking River decision, California employers should reconsider the benefits of arbitration agreements, if they do not currently have one.  If California employers do have an arbitration agreement with their employees, they should have the arbitration provisions of their employment agreements reviewed by counsel.  Is the arbitration agreement voluntary? Does the arbitration agreement force the employee to waive his or her right to bring a PAGA claim? Does the arbitration agreement include a Class Action Waiver? Does the agreement contain a “severability” clause, specifying that if any portion of the agreement is found invalid, the remaining terms are enforceable? The answers to these questions may impact the enforceability of the arbitration agreement and/or the ability of an employee who signs the arbitration agreement to maintain a PAGA action against the employer. Employers should consult an attorney to determine whether their arbitration agreement is enforceable and whether it would effectively preclude PAGA action lawsuits. 

For any questions about any employment related issues, including arbitration agreements  and PAGA, reach out to Aleshia Poole White at, an experienced employment law attorney at Berliner Cohen, LLP.


[1] Viking River Cruises, Inc. v. Moriana, No. 20-1573 (U.S. Supreme Court June 15, 2022)

[2] PAGA authorizes an “aggrieved employee” (an employee who has a claim under the Labor Code) to file a lawsuit against his or her employer to collect penalties on behalf of him or herself, other employees, and the State of California.  PAGA is a representative action wherein the employee who asserts the PAGA claim acts on behalf of the State of California.

[3] The “Class Action Waiver” stated that the parties could not bring any dispute as a class, collective, or representative action under PAGA. (Viking River, at 1.).

[4] The severability clause specified that if the waiver was found invalid, the dispute would be litigated in court, but any portion of the waiver that remained valid would be enforced in arbitration. (Id.) Based on the severability clause, Viking could enforce the valid portions of the agreement. 

[5] Viking River, at 4, 21.