It’s an increasingly common tactic for employers to ask employees to sign an arbitration agreement that bars the employees from filing a class action lawsuit. However, in California, it is illegal to bar all representative actions, and many arbitration agreements are not enforceable under California law.
If you signed an arbitration agreement and your employer has failed to pay you and other employees your rightful wages, you may still be able to take legal action under a law called the Private Attorneys General Act (PAGA). This piece of legislation is one of the most important tools for employees whose employers have failed to properly pay multiple employees or provide proper meal and rest breaks to multiple employees.
PAGA and representative actions
An arbitration agreement may specifically bar class actions against the employer, but that does not necessarily mean the arbitration agreement is enforceable.
Also, PAGA gives individual employees the ability to bring a PAGA representative action — rather than a class action lawsuit — against an employer for things such as wage and hour violations, including meal and rest break violations.
In other words, even if you signed an arbitration agreement that forbids you from participating in a class action lawsuit, you might still be able to receive significant compensation through a PAGA representative action. It’s a good idea to consult a California employment law attorney to make sure that your particular situation would qualify for a PAGA representative action.
To learn more, please see our overview of PAGA actions and employment class actions in California.