viking river cruises lawsuit

Supreme Court Sides With Viking River Over Arbitration of California PAGA Claims

On june 15, 2022, the supreme court of the united states ruled in favor of viking river cruises inc. in a case over whether it could use an arbitration agreement to force a lawsuit brought under california’s private attorneys general act (paga) on behalf of aggrieved employees into arbitration. in viking river cruises, inc. v. moriana , no. 20-1573, the supreme court’s highly anticipated decision, the court reasoned that the federal arbitration act (faa) requires the enforcement of an arbitration agreement that waived an employee’s right to bring individual claims through paga and that once those individual claims are sent to arbitration there is no standing to bring representative claims for violations of the california labor code on behalf of other aggrieved employees..

On June 15, 2022, the Supreme Court of the United States ruled in favor of Viking River Cruises Inc. in a case over whether it could use an arbitration agreement to force a lawsuit brought under California’s Private Attorneys General Act (PAGA) on behalf of aggrieved employees into arbitration.

In Viking River Cruises, Inc. v. Moriana , No. 20-1573, the Supreme Court’s highly anticipated decision, the Court reasoned that the Federal Arbitration Act (FAA) requires the enforcement of an arbitration agreement that waives an employee’s right to bring individual claims through PAGA and that once those individual claims are sent to arbitration there is no standing to bring representative claims for violations of the California Labor Code on behalf of other aggrieved employees. However, the Court left open the possibility that California could adjust PAGA to permit representative claims to survive and be brought in court. In short, while a victory for employers, this decision may not be the final word on the interplay between PAGA and the FAA.

Angie Moriana, a former sales representative for Viking River Cruises, sought to prosecute claims for California wage and hour violations through PAGA, which enables employees to bring claims for violations of the California Labor Code on behalf of all other allegedly aggrieved employees. The law allows for civil penalties against the employer, which are awarded per person and can grow exponentially, depending on the number of employees potentially affected.

Viking River Cruises argued the claims were subject to individualized arbitration under an arbitration agreement Moriana signed as a condition of her employment. While arbitration agreements with class action waivers have been enforced by the high court, California state courts had previously held such waivers are unenforceable in PAGA cases.

The Supreme Court held that the FAA preempts the California rule that PAGA actions cannot be forced into arbitration “insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.” This means that the PAGA representative claims may not be dismissed simply because they are representative in nature but that once the plaintiff’s individual claim is sent to arbitration, California law does not provide standing for that person’s representative claims to continue in court or arbitration. This effectively provides a way for employers to minimize the risk of PAGA claims with a properly crafted arbitration agreement. It remains to be seen whether California will adjust PAGA and what the impact of any adjustment will be.

The Supreme Court thus reversed the California Court of Appeal’s decision allowing Moriana’s PAGA action to continue and remanded it back to the California court. However, the high court’s reasoning may leave the door open for the California courts or legislature to provide standing for representative claims to continue either in court or in arbitration, separate from an individual PAGA claim.

Key Takeaways

The ruling follows the Supreme Court’s trend of enforcing bilateral arbitration agreements pursuant to their terms, although it is significantly more nuanced than some advocates wanted. Importantly, the decision in Viking River Cruises indicates employers may be able to use properly drafted arbitration agreements to limit liability for representative claims, at least for now. However, the high court’s reasoning could leave room for California to allow representative claims to proceed separate from individual claims. In the meantime, (1) those employers with operations in California and arbitration agreements may want to update their agreements, and (2) those employers with operations in California but without arbitration agreements may want to reassess whether to roll out an arbitration agreement in order to take advantage of today’s ruling.

Ogletree Deakins’ California Class Action and PAGA Practice Group will continue to monitor developments regarding PAGA and the enforcement of arbitration agreements and will provide updates on the firm’s California  and  Arbitration and Alternative Dispute Resolution blogs. For more information on this decision, please join us for our upcoming webinar, “ The Supreme Court’s Viking River Ruling and What It Means for Arbitration Agreements in California ,” which will take place on Tuesday, June 21, 2022, from 12:00 noon to 1:00 p.m. ET. The speakers, Alexander (Zander) Chemers and Jack Sholkoff , will discuss the key takeaways from the decision. Register here . Important information for employers also is available via the firm’s  podcast  programs.

Jack S. Sholkoff

Zachary V. Zagger

Browse more insights.

Arbitration and Alternative Dispute Resolution

Employment arbitration and other alternative dispute resolution (ADR) techniques can help employers and employees achieve quicker and more efficient resolutions to employment disputes. Using ADR, especially arbitration, can reduce the burden and expense of litigation while maintaining fairness to all parties.

Class Action

Our class action lawyers are veterans. We have decades of experience handling numerous types of federal and state law class and collective actions, such as those arising under Title VII, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, and the Fair Labor Standards Act.

Sign up to receive emails about new developments and upcoming programs.

Fill out the below to receive more information on the client portal:, request webinar recording for supreme court sides with viking river over arbitration of california paga claims, request transcript.

• Full Name *
• Please understand that merely contacting us does not create an attorney-client relationship. We cannot become your lawyers or represent you in any way unless (1) we know that doing so would not create a conflict of interest with any of the clients we represent, and (2) satisfactory arrangements have been made with us for representation. Accordingly, please do not send us any information about any matter that may involve you unless we have agreed that we will be your lawyers and represent your interests and you have received a letter from us to that effect (called an engagement letter). NOTE : Podcast transcripts are reserved for clients (or clients of the firm).
• I agree to the terms of service

Alumni Sign Up

" * " indicates required fields

Rates and Rate Structures

Fill out the form below to receive more information on our rate structures :, fill out the form below to receive more information on od comply:, fill out the form below to share the job supreme court sides with viking river over arbitration of california paga claims.

Skip to Main Content - Keyboard Accessible

Viking river cruises, inc. v. moriana.

• Supreme Court

Viking River Cruises, Inc. v. Moriana Reversed and remanded.

• Syllabus [Syllabus] [PDF]
• Opinion , Alito [Alito Opinion] [PDF]
• Concurrence , Sotomayor [Sotomayor Concurrence] [PDF]
• Concurrence , Barrett [Barrett Concurrence] [PDF]
• Dissent , Thomas [Thomas Dissent] [PDF]

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 , 337.

SUPREME COURT OF THE UNITED STATES

Viking River Cruises, Inc. v . Moriana

certiorari to the court of appeal of california, second appellate district

The question for decision is whether the Federal Arbitration Act, 9 U. S. C. §1 et seq. , preempts a rule of California law that invalidates contractual waivers of the right to assert representative claims under California’s Labor Code Private Attorneys General Act of 2004, Cal. Lab. Code §2698 et seq. PAGA enlists employees as private attorneys general to enforce California labor law. By its terms, PAGA authorizes any “aggrieved employee” to initiate an action against a former employer “on behalf of himself or herself and other current or former employees” to obtain civil penalties that previously could have been recovered only by the State in an enforcement action brought by California’s Labor and Workforce Development Agency (LWDA). California precedent holds that a PAGA suit is a “ ‘representative action’ ” in which the employee plaintiff sues as an “ ‘agent or proxy’ ” of the State. Iskanian v. CLS Transp. Los Angeles, LLC , 59 Cal. 4th 348, 380. California precedent also interprets the statute to contain what is effectively a rule of claim joinder—allowing a party to unite multiple claims against an opposing party in a single action. An employee with PAGA standing may “seek any civil penalties the state can, including penalties for violations involving employees other than the PAGA litigant herself.” ZB, N. A. v. Superior Court , 8 Cal. 5th 175, 185.

  Respondent Angie Moriana filed a PAGA action against her former employer Viking River Cruises, alleging a California Labor Code violation. She also asserted a wide array of other violations allegedly sustained by other Viking employees. Moriana’s employment contract with Viking contained a mandatory arbitration agreement. Important here, that agreement contained both a “Class Action Waiver”—providing that the parties could not bring any dispute as a class, collective, or representative action under PAGA—and a severability clause— specifying that if the waiver was found invalid, such a dispute would presumptively be litigated in court. Under the severability clause, any “portion” of the waiver that remained valid would be “enforced in arbitration.” Viking moved to compel arbitration of Moriana’s individual PAGA claim and to dismiss her other PAGA claims. Applying California’s Iskanian precedent, the California courts denied that motion, holding that categorical waivers of PAGA standing are contrary to California policy and that PAGA claims cannot be split into arbitrable “individual” claims and nonarbitrable “representative” claims. This Court granted certiorari to decide whether the FAA preempts the California rule.

Held : 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. Pp. 7–21.

 (a) Based on the principle that “[a]rbitration is strictly ‘a matter of consent,’ ” Granite Rock Co. v. Teamsters, 561 U. S. 287 , 299, this Court has held that “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so,” Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp. , 559 U. S. 662 , 684. Because class-action arbitration mandates procedural changes that are inconsistent with the individualized and informal mode of bilateral arbitration contemplated by the FAA, see AT&T Mobility LLC v. Concepcion , 563 U. S. 333 , 347, class procedures cannot be imposed by state law without presenting unwilling parties with an unacceptable choice between being compelled to arbitrate using such procedures and forgoing arbitration all together.

 Viking contends that the Court’s FAA precedents require enforcement of contractual provisions waiving the right to bring PAGA actions because PAGA creates a form of class or collective proceeding. If this is correct, Iskanian ’s prohibition on PAGA waivers presents parties with an impermissible choice: Either arbitrate disputes using a form of class procedures, or do not arbitrate at all. Moriana maintains that any conflict between Iskanian and the FAA is illusory because PAGA creates nothing more than a substantive cause of action.

 This Court disagrees with both characterizations of the statute. Moriana’s premise that PAGA creates a unitary private cause of action is irreconcilable with the structure of the statute and the ordinary legal meaning of the word “claim.” A PAGA action asserting multiple violations under California’s Labor Code affecting a range of different employees does not constitute “a single claim” in even the broadest possible sense. Viking’s position, on the other hand, elides important structural differences between PAGA actions and class actions. A class-action plaintiff can raise a multitude of claims because he or she  represents a multitude of absent individuals; a PAGA plaintiff, by contrast, represents a single principal, the LWDA, that has a multitude of claims. As a result, PAGA suits exhibit virtually none of the procedural characteristics of class actions.

 This Court’s FAA precedents treat bilateral arbitration as the prototype of the individualized and informal form of arbitration protected from undue state interference by the FAA. See, e.g., Epic Systems Corp. v. Lewis , 584 U. S. ___, ___. Viking posits that a proceeding is “bilateral” only if it involves two and only two parties and “is conducted by and on behalf of the individual named parties only.” Wal-Mart Stores, Inc. v. Dukes, 564 U. S. 338 , 348. Thus, Iskanian ’s prohibition on PAGA waivers is inconsistent with the FAA because PAGA creates an intrinsically representational form of action and Iskanian requires parties either to arbitrate in that format or forgo arbitration altogether.

 This Court disagrees. Nothing in the FAA establishes a categorical rule mandating enforcement of waivers of standing to assert claims on behalf of absent principals. Non-class representative actions in which a single agent litigates on behalf of a single principal necessarily deviate from the strict ideal of bilateral dispute resolution posited by Viking, but this Court has never held that the FAA imposes a duty on States to render all forms of representative standing waivable by contract or that such suits deviate from the norm of bilateral arbitration. Unlike procedures distinctive to multiparty litigation, single-principal, single-agent representative actions are “bilateral” in two registers: They involve the rights of only the absent real party in interest and the defendant, and litigation need only be conducted by the agent-plaintiff and the defendant. Nothing in this Court’s precedent suggests that in enacting the FAA, Congress intended to require States to reshape their agency law governing who can assert claims on behalf of whom to ensure that parties will never have to arbitrate disputes in a proceeding that deviates from bilateral arbitration in the strictest sense. Pp. 7–17.

 (b) PAGA’s built-in mechanism of claim joinder is in conflict with the FAA. Iskanian ’s prohibition on contractual division of PAGA actions into constituent claims unduly circumscribes the freedom of parties to determine “the issues subject to arbitration” and “the rules by which they will arbitrate,” Lamps Plus, Inc. v. Varela , 587 U. S. ____, ____, and does so in a way that violates the fundamental principle that “arbitration is a matter of consent,” Stolt-Nielsen , 559 U. S., at 684. For that reason, state law cannot condition the enforceability of an agreement to arbitrate on the availability of a procedural mechanism that would permit a party to expand the scope of the anticipated arbitration by introducing claims that the parties did not jointly agree to arbitrate.  A state rule imposing an expansive rule of joinder in the arbitral context would defeat the ability of parties to control which claims are subject to arbitration by permitting parties to superadd new claims to the proceeding, regardless of whether the agreement committed those claims to arbitration. When made compulsory by way of Iskanian , PAGA’s joinder rule functions in exactly this way. The effect is to coerce parties into withholding PAGA claims from arbitration. Iskanian ’s indivisibility rule effectively coerces parties to opt for a judicial forum rather than “forgo[ing] the procedural rigor and appellate review of the courts to realize the benefits of private dispute resolution.” Stolt-Nielsen , 559 U. S., at 685. Pp. 17–19.

 (c) Under this Courts holding, Iskanian ’s prohibition on wholesale waivers of PAGA claims is not preempted by the FAA. But Iskanian ’s rule that PAGA actions cannot be divided into individual and non-individual claims is preempted, so Viking was entitled to compel arbitration of Moriana’s individual claim. 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. And under PAGA’s standing requirement, a plaintiff has standing to maintain non-individual PAGA claims in an action only by virtue of also maintaining an individual claim in that action. As a result, Moriana would lack statutory standing to maintain her non-individual claims in court, and the correct course was to dismiss her remaining claims. Pp. 20–21.

Reversed and remanded.

 Alito , J., delivered the opinion of the Court, in which Breyer , Sotomayor , Kagan , and Gorsuch , JJ., joined, in which Roberts , C. J., joined as to Parts I and III, and in which Kavanaugh and Barrett , JJ., joined as to Part III. Sotomayor , J., filed a concurring opinion. Barrett , J., filed an opinion concurring in part and concurring in the judgment, in which Kavanaugh , J., joined, and in which Roberts , C. J, joined as to all but the footnote. Thomas , J., filed a dissenting opinion.

NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.

_________________

No. 20–1573

VIKING RIVER CRUISES, INC., PETITIONER v.  ANGIE MORIANA

on writ of certiorari to the court of appeal of california, second appellate district

 Justice Alito delivered the opinion of the Court. 1 *

 We granted certiorari in this case to decide whether the Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq. , preempts a rule of California law that invalidates contractual waivers of the right to assert representative claims under California’s Labor Code Private Attorneys General Act of 2004. Cal. Lab. Code Ann. §2698 et seq. (West 2022).

 The California Legislature enacted the Labor Code Private Attorneys General Act (PAGA) to address a perceived deficit in the enforcement of the State’s Labor Code. California’s Labor and Workforce Development Agency (LWDA) had the authority to bring enforcement actions to impose civil penalties on employers for violations of many of the code’s provisions. But the legislature believed the LWDA did not have sufficient resources to reach the appropriate level of compliance, and budgetary constraints made it im possible to achieve an adequate level of financing. The legislature thus decided to enlist employees as private attorneys general to enforce California labor law, with the understanding that labor-law enforcement agencies were to retain primacy over private enforcement efforts.

 By its terms, PAGA authorizes any “aggrieved employee” to initiate an action against a former employer “on behalf of himself or herself and other current or former employees” to obtain civil penalties that previously could have been recovered only by the State in an LWDA enforcement action. Cal. Lab. Code Ann. §2699(a). As the text of the statute indicates, PAGA limits statutory standing to “aggrieved employees”—a term defined to include “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” §2699(c). To bring suit, however, an employee must also exhaust administrative remedies. That entails providing notice to the employer and the LWDA of the violations alleged and the supporting facts and theories. §2699.3(a)(1)(A). If the LWDA fails to respond or initiate an investigation within a specified timeframe, the employee may bring suit. §2699.3(a)(2). In any successful PAGA action, the LWDA is entitled to 75 percent of the award. §2699(i). The remaining 25 percent is distributed among the employees affected by the violations at issue. Ibid.

 California law characterizes PAGA as creating a “type of qui tam action,” 2 Iskanian v. CLS Transp. Los Angeles, LLC , 59 Cal. 4th 348, 382, 327 P. 3d 129, 148 (2014). Although the statute’s language suggests that an “aggrieved employee” sues “on behalf of himself or herself and other current or former employees,” §2699(a), California precedent holds that a PAGA suit is a “ ‘representative action’ ” in which the employee plaintiff sues as an “ ‘agent or proxy’ ” of the State. Id. , at 380, 327 P. 3d, at 147 (quoting Arias v. Superior Court , 46 Cal. 4th 969, 986, 209 P. 3d 923, 933 (2009)).

 As the California courts conceive of it, the State “is always the real party in interest in the suit.” Iskanian , 59 Cal. 4th, at 382, 327 P. 3d, at 148. 3 The primary function of PAGA is to delegate a power to employees to assert “the same legal right and interest as state law enforcement agencies,” Arias , 46 Cal. 4th, at 986, 209 P. 3d, at 933. In other words, the statute gives employees a right to assert  the State’s claims for civil penalties on a representative basis, but it does not create any private rights or private claims for relief. Iskanian , 59 Cal. 4th, at 381, 327 P. 3d, at 148; see also Amalgamated Transit , 46 Cal. 4th 993, 1002, 209 P. 3d 937, 943 (2009). The code provisions enforced through the statute establish public duties that are owed to the State, not private rights belonging to employees in their “individual capacities.” Iskanian , 59 Cal. 4th, at 381, 327 P. 3d, at 147. Other, distinct provisions of the code create individual rights, and claims arising from violations of those rights are actionable through separate private causes of action for compensatory or statutory damages. Id., at 381–382, 327 P. 3d, at 147–148; see also Kim v. Reins Int’l California, Inc. , 9 Cal. 5th 73, 86, 459 P. 3d 1123, 1130 (2020) (“[C]ivil penalties recovered on the state’s behalf are intended to remediate present violations and deter future ones, not to redress employees’ injuries” (internal quotation marks omitted; emphasis deleted)). And because PAGA actions are understood to involve the assertion of the government’s claims on a derivative basis, the judgment issued in a PAGA action is binding on anyone “who would be bound by a judgment in an action brought by the government.” Arias , 46 Cal. 4th, at 986, 209 P. 3d, at 933.

 California precedent also interprets the statute to contain what is effectively a rule of claim joinder. Rules of claim joinder allow a party to unite multiple claims against an opposing party in a single action. See 6A C. Wright, H. Miller, & E. Cooper, Federal Practice and Procedure §1582 (3d ed. 2016) (Wright & Miller). PAGA standing has the same function. An employee with statutory standing may “seek any civil penalties the state can, including penalties for violations involving employees other than the PAGA litigant herself.” ZB, N. A. v. Superior Court , 8 Cal. 5th 175, 185, 448 P. 3d 239, 243–244 (2019). An employee who alleges he or she suffered a single violation is entitled to use that violation as a gateway to assert a potentially limitless  number of other violations as predicates for liability. This mechanism radically expands the scope of PAGA actions. The default penalties set by PAGA are $100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation. Cal. Lab. Code Ann. §2699(f )(2). Individually, these penalties are modest; but given PAGA’s additive dimension, low-value claims may easily be welded together into high-value suits.

 Petitioner Viking River Cruises, Inc. (Viking), is a company that offers ocean and river cruises around the world. When respondent Angie Moriana was hired by Viking as a sales representative, she executed an agreement to arbitrate any dispute arising out of her employment. The agreement contained a “Class Action Waiver” providing 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 be litigated in court. But under that severability clause, if any “portion” of the waiver remained valid, it would be “enforced in arbitration.”

 After leaving her position with Viking, Moriana filed a PAGA action against Viking in California court. Her complaint contained a claim that Viking had failed to provide her with her final wages within 72 hours, as required by §§101–102 of the California Labor Code. But the complaint also asserted a wide array of other code violations allegedly sustained by other Viking employees, including violations of provisions concerning the minimum wage, overtime, meal periods, rest periods, timing of pay, and pay statements. Viking moved to compel arbitration of Moriana’s “individual” PAGA claim—here meaning the claim that  arose from the violation she suffered—and to dismiss her other PAGA claims. The trial court denied that motion, and the California Court of Appeal affirmed, holding that categorical waivers of PAGA standing are contrary to state policy and that PAGA claims cannot be split into arbitrable individual claims and nonarbitrable “representative” claims.

 This ruling was dictated by the California Supreme Court’s decision in Iskanian . In that case, the court held that pre-dispute agreements to waive the right to bring “representative” PAGA claims are invalid as a matter of public policy. What, precisely, this holding means requires some explanation. PAGA’s unique features have prompted the development of an entire vocabulary unique to the statute, but the details, it seems, are still being worked out. An unfortunate feature of this lexicon is that it tends to use the word “representative” in two distinct ways, and each of those uses of the term “representative” is connected with one of Iskanian ’s rules governing contractual waiver of PAGA claims.

 In the first sense, PAGA actions are “representative” in that they are brought by employees acting as representatives—that is, as agents or proxies—of the State. But PAGA claims are also called “representative” when they are predicated on code violations sustained by other employees. In the first sense, “ ‘ every PAGA action is . . . representative’ ” and “[t]here is no individual component to a PAGA action,” Kim , 9 Cal. 5th, at 87, 459 P. 3d, at 1131 (quoting Iskanian , 59 Cal. 4th, at 387, 327 P. 3d, at 151), because every PAGA claim is asserted in a representative capacity. But when the word “representative” is used in the second way, it makes sense to distinguish “individual” PAGA claims, which are premised on Labor Code violations actually sustained by the plaintiff, from “representative” (or perhaps quasi-representative) PAGA claims arising out of events involving other employees. For purposes of this  opinion, we will use “individual PAGA claim” to refer to claims based on code violations suffered by the plaintiff. And we will endeavor to be clear about how we are using the term “representative.”

 Iskanian ’s principal rule prohibits waivers of “representative” PAGA claims in the first sense. That is, it prevents parties from waiving representative standing to bring PAGA claims in a judicial or arbitral forum. But Iskanian also adopted a secondary rule that invalidates agreements to separately arbitrate or litigate “individual PAGA claims for Labor Code violations that an employee suffered,” on the theory that resolving victim-specific claims in separate arbitrations does not serve the deterrent purpose of PAGA. 59 Cal. 4th, at 383, 327 P. 3d, at 149; see also Kim , 9 Cal. 5th, at 88, 459 P. 3d, at 1132 (noting that based on Iskanian , California courts have uniformly “rejected efforts to split PAGA claims into individual and representative components”).

 In this case, Iskanian ’s principal prohibition required the lower courts to treat the representative-action waiver in the agreement between Moriana and Viking as invalid insofar as it was construed as a wholesale waiver of PAGA standing. The agreement’s severability clause, however, allowed enforcement of any “portion” of the waiver that remained valid, so the agreement still would have permitted arbitration of Moriana’s individual PAGA claim even if wholesale enforcement was impossible. But because California law prohibits division of a PAGA action into constituent claims, the state courts refused to compel arbitration of that claim as well. We granted certiorari, 595 U. S. ___ (2021), and now reverse.

 The FAA was enacted in response to judicial hostility to arbitration. Section 2 of the statute makes arbitration agreements “valid, irrevocable, and enforceable, save upon  such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. §2 . 4 As we have interpreted it, this provision contains two clauses: An enforcement mandate, which renders agreements to arbitrate enforceable as a matter of federal law, and a saving clause, which permits invalidation of arbitration clauses on grounds applicable to “any contract.” See AT&T Mobility LLC v. Concepcion , 563 U. S. 333 , 339–340 (2011); Epic Systems Corp. v. Lewis , 584 U. S. ___, ___–___ (2018) (slip op., at 5–6). These clauses jointly establish “an equal-treatment principle: A court may invalidate an arbitration agreement based on ‘generally applicable contract defenses’ like fraud or unconscionability, but not on legal rules that ‘apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.’ ” Kindred Nursing Centers L. P. v. Clark , 581 U. S. 246 , 251 (2017) (quoting Concepcion , 563 U. S., at 339). Under that principle, the FAA “preempts any state rule discriminating on its face against arbitration—for example, a law ‘prohibit[ing] outright the arbitration of a particular type of claim.’ ” Kindred Nursing , 581 U. S., at 251 (quoting Concepcion , 563 U. S., at 341).

 But under our decisions, even rules that are generally applicable as a formal matter are not immune to preemption  by the FAA. See Lamps Plus, Inc. v. Varela , 587 U. S. ___, ___ (2019) (slip op., at 6); Concepcion , 563 U. S., at 343. Section 2’s mandate protects a right to enforce arbitration agreements. That right would not be a right to arbitrate in any meaningful sense if generally applicable principles of state law could be used to transform “traditiona[l] individualized . . . arbitration” into the “litigation it was meant to displace” through the imposition of procedures at odds with arbitration’s informal nature. Epic Systems , 584 U. S., at ___ (slip op., at 8). See also Concepcion , 563 U. S., at 351. And that right would not be a right to arbitrate based on an agreement if generally applicable law could be used to coercively impose arbitration in contravention of the “first principle” of our FAA jurisprudence: that “[a]rbitration is strictly ‘a matter of consent.’ ” Granite Rock Co. v. Teamsters , 561 U. S. 287 , 299 (2010) (quoting Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ. , 489 U. S. 468 , 479 (1989)); see also Lamps Plus , 587 U. S., at ___ (slip op., at 7); Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp. , 559 U. S. 662 , 685 (2010).

 Based on these principles, we have held that “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” Id. , at 684. See also Lamps Plus , 587 U. S., at ___ (slip op., at 1); Epic Systems , 584 U. S., at ___–___ (slip op., at 6–8); Concepcion , 563 U. S., at 347–348. The “ ‘shift from bilateral arbitration to class-action arbitration’ ” mandates procedural changes that are inconsistent with the individualized and informal mode of arbitration contemplated by the FAA. Id. , at 347 (quoting Stolt-Nielsen , 559 U. S., at 686). As a result, class procedures cannot be imposed by state law without presenting unwilling parties with an unacceptable choice between being compelled to arbitrate using procedures at odds with arbitration’s traditional form and forgoing arbitration altogether. Putting parties to that choice is inconsistent with the FAA.

  Viking contends that these decisions require enforcement of contractual provisions waiving the right to bring PAGA actions because PAGA creates a form of class or collective proceeding. If this is correct, Iskanian ’s prohibition on PAGA waivers presents parties with the same impermissible choice as the rules we have invalidated in our decisions concerning class- and collective-action waivers: Either arbitrate disputes using a form of class procedure, or do not arbitrate at all.

 Moriana offers a very different characterization of the statute. As she sees it, any conflict between Iskanian and the FAA is illusory because PAGA creates nothing more than a substantive cause of action. The only thing that is distinctive about PAGA, she supposes, is that it allows employee plaintiffs to increase the available penalties that may be awarded in an action by proving additional predicate violations of the Labor Code. But that does not make a PAGA action a class action, because those violations are not distinct claims belonging to distinct individuals. Instead, they are predicates for expanded liability under a single cause of action. In Moriana’s view, that means Iskanian invalidates waivers of substantive rights, and does not purport to invalidate anything that can meaningfully be described as an “arbitration agreement.” 5

  We disagree with both characterizations of the statute. Moriana is correct that the FAA does not require courts to enforce contractual waivers of substantive rights and remedies. The FAA’s mandate is to enforce “ arbitration agreements .” Concepcion , 563 U. S., at 344 (emphasis added). And as we have described it, an arbitration agreement is “a specialized kind of forum-selection clause that posits not only the situs of suit but also the procedure to be used in resolving the dispute.” Scherk v. Alberto-Culver Co. , 417 U. S. 506 , 519 (1974); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. , 473 U. S. 614 , 633 (1985). An arbitration agreement thus does not alter or abridge substantive rights; it merely changes how those rights will be processed. And so we have said that “ ‘[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral . . . forum.’ ” Preston v. Ferrer , 552 U. S. 346 , 359 (2008) (quoting Mitsubishi Motors Corp. , 473 U. S., at 628). 6

  But Moriana’s premise that PAGA creates a unitary private cause of action is irreconcilable with the structure of the statute and the ordinary legal meaning of the word “claim.” California courts interpret PAGA to provide employees with delegated authority to assert the State’s claims on a representative basis, not an individual cause of action. See, e.g. , Amalgamated Transit , 46 Cal. 4th, at 1003, 209 P. 3d, at 943 (PAGA “is simply a procedural statute” that “does not create property rights or any other substantive rights”). And a PAGA action asserting multiple code violations affecting a range of different employees does not constitute “a single claim” in even the broadest possible sense, because the violations asserted need not even arise from a common “transaction” or “nucleus of operative facts.” Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc. , 590 U. S. ___, ___ (2020) (slip op., at 6) (internal quotation marks omitted). 7

 Viking’s position, on the other hand, elides important structural differences between PAGA actions and class actions that preclude any straightforward application of our precedents invalidating prohibitions on class-action waivers. Class-action procedure allows courts to use a representative plaintiff ’s individual claims as a basis to “adjudicate claims of multiple parties at once, instead of in separate suits,” Shady Grove Orthopedic Associates, P. A. v. Allstate Ins. Co. , 559 U. S. 393 , 408 (2010). This, of course, requires the certification of a class. And because class judgments bind absentees with respect to their individual  claims for relief and are preclusive as to all claims the class could have brought, Cooper v. Federal Reserve Bank of Richmond , 467 U. S. 867 , 874 (1984), “class representatives must at all times adequately represent absent class members, and absent [class] members must be afforded notice, an opportunity to be heard, and a right to opt out of the class.” Concepcion , 563 U. S., at 349. And to “ensur[e] that the named plaintiffs are appropriate representatives of the class whose claims they wish to litigate,” the adjudicator must decide questions of numerosity, commonality, typicality, and adequacy of representation. Wal-Mart Stores, Inc. v. Dukes , 564 U. S. 338 , 349 (2011).

 PAGA actions also permit the adjudication of multiple claims in a single suit, but their structure is entirely different. A class-action plaintiff can raise a multitude of claims because he or she represents a multitude of absent individuals; a PAGA plaintiff, by contrast, represents a single principal, the LWDA, that has a multitude of claims. As a result of this structural difference, PAGA suits exhibit virtually none of the procedural characteristics of class actions. The plaintiff does not represent a class of injured individuals, so there is no need for certification. PAGA judgments are binding only with respect to the State’s claims, and are not binding on nonparty employees as to any individually held claims. Arias , 46 Cal. 4th, at 986, 209 P. 3d, at 933–934. This obviates the need to consider adequacy of representation, numerosity, commonality, or typicality. And although the statute gives other affected employees a future interest in the penalties awarded in an action, that interest does not make those employees “parties” in any of the senses in which absent class members are, see Devlin v. Scardelletti , 536 U. S. 1 (2002) , or give those employees anything more than an inchoate interest in litigation proceeds. See Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U. S. 765 , 773 (2000) (The “ ‘right’ ” to a share  of the proceeds of a qui tam action “does not even fully materialize until the litigation is completed and the relator prevails”).

 Because PAGA actions do not adjudicate the individual claims of multiple absent third parties, they do not present the problems of notice, due process, and adequacy of representation that render class arbitration inconsistent with arbitration’s traditionally individualized form. See Concepcion , 563 U. S., at 347–348. Of course, as a practical matter, PAGA actions do have something important in common with class actions. Because PAGA plaintiffs represent a principal with a potentially vast number of claims at its disposal, PAGA suits “greatly increas[e] risks to defendants.” Id. , at 350. But our precedents do not hold that the FAA allows parties to contract out of anything that might amplify defense risks. Instead, our cases hold that States cannot coerce individuals into forgoing arbitration by taking the individualized and informal procedures characteristic of traditional arbitration off the table. Litigation risks are relevant to that inquiry because one way in which state law may coerce parties into forgoing their right to arbitrate is by conditioning that right on the use of a procedural format that makes arbitration artificially unattractive. The question, then, is whether PAGA contains any procedural mechanism at odds with arbitration’s basic form.

 Viking suggests an answer. Our FAA precedents treat bilateral arbitration as the prototype of the individualized and informal form of arbitration protected from undue state interference by the FAA. See Epic Systems , 584 U. S., at ___–___ (slip op., at 8–9); see also American Express Co. v. Italian Colors Restaurant , 570 U. S. 228 , 238 (2013); Concepcion , 563 U. S., at 347–349; Stolt-Nielsen , 559 U. S., at 685–686. Viking posits that a proceeding is “bilateral” in the relevant sense if—but only if—it involves two and only two parties and the arbitration “ ‘is conducted by and on behalf of the individual named parties only.’ ” Wal-Mart , 564  U. S., at 348 (quoting Califano v. Yamasaki , 442 U. S. 682 , 700–701 (1979)). PAGA actions necessarily deviate from this ideal because they involve litigation or arbitration on behalf of an absent principal. Viking thus suggests that Iskanian ’s prohibition on PAGA waivers is inconsistent with the FAA because PAGA creates an intrinsically representational form of action and Iskanian requires parties either to arbitrate in that format or forgo arbitration altogether.

 We disagree. Nothing in the FAA establishes a categorical rule mandating enforcement of waivers of standing to assert claims on behalf of absent principals. Non-class representative actions in which a single agent litigates on behalf of a single principal are part of the basic architecture of much of substantive law. Familiar examples include shareholder-derivative suits, wrongful-death actions, trustee actions, and suits on behalf of infants or incompetent persons. Single-agent, single-principal suits of this kind necessarily deviate from the strict ideal of bilateral dispute resolution posited by Viking. But we have never held that the FAA imposes a duty on States to render all forms of representative standing waivable by contract. Nor have we suggested that single-agent, single-principal representative suits are inconsistent the norm of bilateral arbitration as our precedents conceive of it. Instead, we have held that “the ‘changes brought about by the shift from bilateral arbitration to class-action arbitration ’ ” are too fundamental to be imposed on parties without their consent. Concepcion , 563 U. S., at 347–348 (quoting Stolt-Nielsen , 559 U. S., at 686; emphasis added). And we have held that §2’s saving clause does not preserve defenses that would allow a party to declare “that a contract is unenforceable just because it requires bilateral arbitration .” Epic Systems , 584 U. S., at ___ (slip op., at 9).

 These principles do not mandate the enforcement of waiv ers of representative capacity as a categorical rule. Requiring parties to decide whether to arbitrate or litigate a  single-agent, single-principal action does not produce a shift from a situation in which the arbitrator must “resolv[e] a single dispute between the parties to a single agreement” to one in which he or she must “resolv[e] many disputes between hundreds or perhaps even thousands of parties.” Stolt-Nielsen , 559 U. S., at 686. And a proceeding in which two and only two parties arbitrate exclusively in their individual capacities is not the only thing one might mean by “bilateral arbitration.” As we have said, “[t]he label ‘party’ does not indicate an absolute characteristic, but rather a conclusion about the applicability of various procedural rules that may differ based on context.” Devlin , 536 U. S., at 10. Our precedents use the phrase “bilateral arbitration” in opposition to “class or collective” arbitration, and the problems we have identified in mandatory class arbitration arise from procedures characteristic of multiparty representative actions. Epic Systems , 584 U. S., at ___ (slip op., at 24); see also Italian Colors , 570 U. S., at 238; Concepcion , 563 U. S., at 347–349; Stolt-Nielsen , 559 U. S., at 685–686. Unlike these kinds of actions, single-principal, single-agent representative actions are “bilateral” in two registers: They involve the rights of only the absent real party in interest and the defendant, and litigation need only be conducted by the agent-plaintiff and the defendant. This degree of deviation from bilateral norms is not alien to traditional arbitral practice, 8 and our precedents have never suggested otherwise. See, e.g., Marmet Health Care Center, Inc. v. Brown , 565 U. S. 530 (2012) ( per curiam ) (invalidating rule categorically barring arbitration of wrongful-death actions).

  Nor does a rule prohibiting waiver of representative standing declare “that a contract is unenforceable just because it requires bilateral arbitration .” Epic Systems , 584 U. S., at ___ (slip op., at 9). Indeed, if the term “bilateral arbitration” is used to mean “arbitration in an individual capacity between precisely two parties,” a rule prohibiting representative-capacity waivers cannot invalidate agreements to arbitrate on a “bilateral” basis. An agreement that explicitly provided for “arbitration on a strictly bilateral basis” would, under that definition of the term “bilateral,” categorically exclude representative-capacity claims from its coverage. Such claims, after all, necessarily involve the representation of an absent principal, and thus cannot be arbitrated in a strictly bilateral proceeding. A rule prohibiting waivers of representative standing would not invalidate any agreements that contracted for “bilateral arbitration” in Viking’s sense—it would simply require parties to choose whether to litigate those claims or arbitrate them in a proceeding that is not bilateral in every conceivable sense. And while this consequence only follows because it is impossible to decide representative claims in an arbitration that is “bilateral” in every dimension, nothing in our precedent suggests that in enacting the FAA, Congress intended to require States to reshape their agency law to ensure that parties will never have to arbitrate in a proceeding that deviates from “bilateral arbitration” in the strictest sense. If there is a conflict between California’s prohibition on PAGA waivers and the FAA, it must derive from a different source.

 We think that such a conflict between PAGA’s procedural structure and the FAA does exist, and that it derives from the statute’s built-in mechanism of claim joinder. As we noted at the outset, that mechanism permits “aggrieved employees” to use the Labor Code violations they personally suffered as a basis to join to the action any claims that could  have been raised by the State in an enforcement proceeding. Iskanian ’s secondary rule prohibits parties from contracting around this joinder device because it invalidates agreements to arbitrate only “individual PAGA claims for Labor Code violations that an employee suffered,” 59 Cal. 4th, at 383, 327 P. 3d, at 149.

 This prohibition on contractual division of PAGA actions into constituent claims unduly circumscribes the freedom of parties to determine “the issues subject to arbitration” and “the rules by which they will arbitrate,” Lamps Plus , 587 U. S., at ___ (slip op., at 7), and does so in a way that violates the fundamental principle that “arbitration is a matter of consent,” Stolt-Nielsen , 559 U. S., at 684. The most basic corollary of the principle that arbitration is a matter of consent is that “a party can be forced to arbitrate only those issues it specifically has agreed to submit to arbitration,” First Options of Chicago, Inc. v. Kaplan , 514 U. S. 938 , 945 (1995). This means that parties cannot be coerced into arbitrating a claim, issue, or dispute “absent an affirmative ‘contractual basis for concluding that the party agreed to do so.’ ” Lamps Plus , 587 U. S., at ___ (slip op., at 8) (quoting Stolt-Nielsen , 559 U. S., at 684); see also Concepcion , 563 U. S., at 347–348.

 For that reason, state law cannot condition the enforceability of an arbitration agreement on the availability of a procedural mechanism that would permit a party to expand the scope of the arbitration by introducing claims that the parties did not jointly agree to arbitrate. Rules of claim joinder can function in precisely that way. Modern civil procedure dispenses with the formalities of the common-law approach to claim joinder in favor of almost-unqualified joinder. Wright & Miller §1581. Federal Rule of Civil Procedure 18(a) , which permits a party to “join, as independent or alternative claims, as many claims as it has against an opposing party,” is typical of the modern approach. But the FAA licenses contracting parties to depart from standard  rules “in favor of individualized arbitration procedures of their own design,” so parties to an arbitration agreement are not required to follow the same approach. Epic Systems , 584 U. S., at ____ (slip op., at 14). And that is true even if bifurcated proceedings are an inevitable result. See, e.g., Dean Witter Reynolds Inc. v. Byrd , 470 U. S. 213 , 220–221 (1985); Moses H. Cone Memorial Hospital v. Mercury Constr. Corp. , 460 U. S. 1 , 103 (1983).

 A state rule imposing an expansive rule of joinder in the arbitral context would defeat the ability of parties to control which claims are subject to arbitration. Such a rule would permit parties to superadd new claims to the proceeding, regardless of whether the agreement between them committed those claims to arbitration. Requiring arbitration procedures to include a joinder rule of that kind 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. See Lamps Plus , 587 U. S., at ___–___ (slip op., at 6–8); Epic Systems , 584 U. S., at ___–___ (slip op., at 5–9); Concepcion , 563 U. S., at 347–351; Stolt-Nielsen , 559 U. S., at 684–687.

 When made compulsory by way of Iskanian , the joinder rule internal to PAGA functions in exactly this way. Under that rule, parties cannot agree to restrict the scope of an arbitration to disputes arising out of a particular “ ‘ “transaction” ’ ” or “ ‘common nucleus of facts.’ ” Lucky Brand , 590 U. S., at ___ (slip op., at 6). If the parties agree to arbitrate “individual” PAGA claims based on personally sustained violations, Iskanian allows the aggrieved employee to abrogate that agreement after the fact and demand either judicial proceedings or an arbitral proceeding that exceeds the scope jointly intended by the parties. The only way for parties to agree to arbitrate one of an employee’s PAGA claims is to also “agree” to arbitrate all other PAGA claims in the  same arbitral proceeding.

 The effect of Iskanian ’s rule mandating this mechanism is to coerce parties into withholding PAGA claims from arbitration. Liberal rules of claim joinder presuppose a backdrop in which litigants assert their own claims and those of a limited class of other parties who are usually connected with the plaintiff by virtue of a distinctive legal relationship—such as that between shareholders and a corporation or between a parent and a minor child. PAGA departs from that norm by granting the power to enforce a subset of California public law to every employee in the State. This combination of standing to act on behalf of a sovereign and mandatory freeform joinder allows plaintiffs to unite a massive number of claims in a single-package suit. But as we have said, “[a]rbitration is poorly suited to the higher stakes” of massive-scale disputes of this kind. Concepcion , 563 U. S., at 350. The absence of “multilayered review” in arbitral proceedings “makes it more likely that errors will go uncorrected.” Ibid. And suits featuring a vast number of claims entail the same “risk of ‘in terrorem’ settlements that class actions entail.” Ibid. As a result, Iskanian ’s indivisibility rule effectively coerces parties to opt for a judicial forum rather than “forgo[ing] the procedural rigor and appellate review of the courts in order to realize the benefits of private dispute resolution.” Stolt-Nielsen , 559 U. S., at 685; see also Concepcion , 563 U. S., at 350–351. This result is incompatible with the FAA.

 We hold 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. This holding compels reversal in this case. The agreement between Viking and Moriana purported to waive “representative” PAGA claims. Under Iskanian , this provision was invalid if construed as a wholesale waiver of PAGA  claims. And under our holding, that aspect of Iskanian is not preempted by the FAA, so the agreement remains invalid insofar as it is interpreted in that manner. But the severability clause in the agreement provides that if the waiver provision is invalid in some respect, any “portion” of the waiver that remains valid must still be “enforced in arbitration.” Based on this clause, Viking was entitled to enforce the agreement insofar as it mandated arbitration of Moriana’s individual PAGA claim. The lower courts refused to do so based on the rule that PAGA actions cannot be divided into individual and non-individual claims. Under our holding, that rule is preempted, so Viking is entitled to compel arbitration of Moriana’s individual claim.

 The remaining question is what the lower courts should have done with Moriana’s non-individual claims. Under our holding in this case, those claims may not be dismissed simply because they are “representative.” Iskanian ’s rule remains valid to that extent. But as 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, 459 P. 3d, at 1133 (“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.

 For these reasons, the judgment of the California Court of Appeal is reversed, and the case is remanded for further  proceedings not inconsistent with this opinion.

It is so ordered.

1 * The Chief Justice joins Parts I and III of this opinion.

2  As we have explained, “ qui tam ” is the short form of the Latin phrase “ qui tam pro domino rege quam pro se ipso in hac parte sequitur” —meaning “ ‘who pursues this action on our Lord the King’s behalf as well as his own.’ ” Vermont Agency of Natural Resources v. United States ex rel. Stevens , 529 U. S. 765 , 768, n. 1(2000). Qui tam actions “appear to have originated around the end of the 13th century, when private individuals who had suffered injury began bringing actions in the royal courts on both their own and the Crown’s behalf ” and became more of a rarity as “royal courts began to extend jurisdiction to suits involving wholly private wrongs.” Id., at 774–775.

3  The extent to which PAGA plaintiffs truly act as agents of the State rather than complete assignees is disputed. See Magadia v. Wal-Mart Assocs., Inc. , 999 F. 3d 668 , 677 (CA9 2021) (holding that PAGA “lacks the procedural controls necessary to ensure that California” retains “substantial authority over the case” (internal quotation marks omitted)). Agency requires control. See Hollingsworth v. Perry , 570 U. S. 693 , 713 (2013). But apart from the exhaustion process, the statute does not feature any explicit control mechanisms, such as provisions authorizing the State to intervene or requiring its approval of settlements. That said, California precedent strongly suggests that the State retains inherent authority to manage PAGA actions. There is no other obvious way to understand California precedent’s description of the State as the “real party in interest.” See generally 1A Cal. Jur. 3d Actions §31 (real-party-in-interest status is based on ownership and control over the cause of action). And a theory of total assignment appears inconsistent with the fact that employees have no assignable interest in a PAGA claim. See Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court of Los Angeles Cty. , 46 Cal. 4th 993, 1002, 209 P. 3d 937, 943 (2009) (Amalgamated Transit); see also Turrieta v. Lyft, Inc. , 69 Cal. App. 5th 955, 972, 284 Cal. Rptr. 3d 767, 780 (2021) (The employee’s “ability to file PAGA claims on behalf of the state does not convert the state’s interest into their own or render them real parties in interest”). For purposes of this opinion, we assume that PAGA plaintiffs are agents.

4  As we have noted, common-law hostility to arbitration “manifested itself in a great variety of devices and formulas.” AT&T Mobility LLC v. Concepcion , 563 U. S. 333 , 342 (2011) (internal quotation marks omitted). Two important devices were the doctrines of ouster and revocability, which, respectively, invalidated arbitration clauses as impermissible attempts to “oust” courts of their jurisdiction and permitted parties to revoke consent to arbitrate until the moment the arbitrator entered an award. See, e.g., Kill v. Hollister , 1 Wils. K. B. 129, 95 Eng. Rep. 532  (K. B. 1746); Vynior’s Case , 77 Co. Rep. 80a, 77 Eng. Rep. 597 (K. B. 1609). Another was the rule barring specific performance as a remedy for breach of an arbitration clause. See 21 R. Lord, Williston on Contracts §57:2 (4th ed. 2017). Section 2 abrogated these doctrines by making arbitration agreements presumptively “valid,” “irrevocable,” and “enforceable.”

5  Moriana declines to defend one of the Iskanian court’s own bases for holding that the FAA does not mandate enforcement of PAGA waivers. The Iskanian court reasoned that a PAGA action lies outside the FAA’s coverage entirely because §2 is limited to controversies “ arising out of  ” the contract between the parties, 9 U. S. C. §2 (emphasis added), and a PAGA action “is not a dispute between an employer and an employee arising out of their contractual relationship,” but “a dispute between an employer and the state .” Iskanian v. CLS Transp. Los Angeles, LLC , 59 Cal. 4th 348, 387, 327 P. 3d 129, 151 (2014). We reject this argument. Although the terms of §2 limit the FAA’s enforcement mandate to agreements to arbitrate controversies that “arise out of ” the parties’ contractual relationship, disputes resolved in PAGA actions satisfy this requirement. The contractual relationship between the parties is a but-for cause of any justiciable legal controversy between the parties under PAGA, and “arising out of ” language normally refers to a causal relationship. See, e.g., Ford Motor Co. v. Montana Eighth Judicial Dist. Court , 592 U. S. ___, ___ (2021) (slip op., at 8). And regardless of whether a PAGA action is in some sense also a dispute between an employer and the State, nothing in the FAA categorically exempts claims belonging to sovereigns from the scope of §2.

6  In briefing before this Court, Viking argued that the principle that the FAA does not mandate enforcement of provisions waiving substantive rights is limited to federal statutes. This argument is erroneous. The basis of this principle is not anything unique about federal statutes. It is that the FAA requires only the enforcement of “provision[s]” to settle a controversy “by arbitration,” §2, and not any provision that happens to appear in a contract that features an arbitration clause. That is why we mentioned this principle in Preston , which concerned claims arising under state law. See 552 U. S., at 360 (noting that under the agreement, a party “relinquishe[d] no substantive rights . . . California law may accord him”).

7  California courts sometimes speak as though a PAGA action involves the assertion of “a single representative PAGA claim,” Williams v. Superior Court , 237 Cal. App. 4th 642, 649, 188 Cal. Rptr. 3d 83, 87 (2015). But we are not required to take the labels affixed by state courts at face value in determining whether state law creates a scheme at odds with federal law. See, e.g. , Carpenter v. Shaw , 280 U. S. 363 , 367–368 (1930). And in our view, this manner of speaking is another reflection of the still-embryonic character of the language that has grown up around PAGA.

8  For example, close corporations have included arbitration clauses in negotiated shareholder agreements for many decades. See, e.g., In re Carl , 263 App. Div. 887, 32 N. Y. S. 2d 410 (1942); Lumsden v. Lumsden Bros. & Taylor Inc ., 242 App. Div. 852, 257 N. Y. S. 221 (1934).

Concurrence

 Justice Sotomayor , concurring.

 I join the Court’s opinion in full. The Court faithfully applies precedent to hold that California’s anti-waiver rule for claims under the State’s Labor Code Private Attorneys General Act of 2004 (PAGA) is pre-empted only “insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.” Ante, at 20. In its analysis of the parties’ contentions, the Court also details several important limitations on the pre-emptive effect of the Federal Arbitration Act (FAA). See ante, at 11–17. As a whole, the Court’s opinion makes clear that California is not powerless to address its sovereign concern that it cannot adequately enforce its Labor Code without assistance from private attorneys general.

 The Court concludes that the FAA poses no bar to the adjudication of respondent Angie Moriana’s “non-individual” PAGA claims, but that PAGA itself “provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding.” Ante, at 21. Thus, the Court reasons, based on available guidance from California courts, that Moriana lacks “statutory standing” under PAGA to litigate her “non-individual” claims separately in state court. Ibid. Of course, if this Court’s understanding of state law is wrong, California courts, in an appropriate case, will have the last  word. Alternatively, if this Court’s understanding is right, the California Legislature is free to modify the scope of statutory standing under PAGA within state and federal constitutional limits. With this understanding, I join the Court’s opinion.

 Justice Barrett , with whom Justice Kavanaugh joins, and with whom The Chief Justice joins except as to the footnote, concurring in part and concurring in the judgment.

 I join Part III of the Court’s opinion. I agree that reversal is required under our precedent because PAGA’s procedure is akin to other aggregation devices that cannot be imposed on a party to an arbitration agreement. See, e.g., Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp. , 559 U. S. 662 (2010) ; AT&T Mobility LLC v. Concepcion , 563 U. S. 333 (2011) ; Epic Systems Corp. v. Lewis , 584 U. S. ___ (2018); Lamps Plus, Inc. v. Varela , 587 U. S. ___ (2019). I would say nothing more than that. The discussion in Parts II and IV of the Court’s opinion is unnecessary to the result, and much of it addresses disputed state-law questions as well as arguments not pressed or passed upon in this case. 1 *

1 *The same is true of Part I.

 Justice Thomas , dissenting.

 I continue to adhere to the view that the Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq. , does not apply to proceedings in state courts. See Allied-Bruce Terminix Cos. v. Dobson , 513 U. S. 265 , 285–297 (1995) ( Thomas , J., dissenting); see also Kindred Nursing Centers L. P. v. Clark , 581 U. S. 246 , 257 (2017) ( Thomas , J., dissenting) (collecting cases). Accordingly, the FAA does not require California’s courts to enforce an arbitration agreement that forbids an employee to invoke the State’s Private Attorneys General Act. On that basis, I would affirm the judgment of the California Court of Appeal.

The following state regulations pages link to this page.

You are using an outdated browser no longer supported by Oyez. Please upgrade your browser to improve your experience.

Breaking News

Viking River Cruises, Inc. v. Moriana

Disclosure : Goldstein & Russell, P.C., whose attorneys contribute to SCOTUSblog in various capacities, is counsel on an amicus brief in support of the petitioner in this case.

Holding : The Federal Arbitration Act preempts a rule of California law that invalidates contractual waivers of the right to assert representative claims under PAGA — the California Private Attorneys General Act — insofar as that rule precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.

Judgment : Reversed and remanded , 8-1, in an opinion by Justice Alito on June 15, 2022. Justice Alito delivered the opinion of the court, in which Justices Breyer, Sotomayor, Kagan, and Gorsuch joined, in which Chief Justice Roberts joined as to Parts I and III, and in which Justices Kavanaugh and Barrett joined as to Parts III. Justice Sotomayor filed a concurring opinion. Justice Barrett filed an opinion concurring in part and concurring in the judgment, in which Justice Kavanaugh joined, and in which Chief Justice Roberts joined as to all but the footnote. Justice Thomas filed a dissenting opinion.

SCOTUSblog Coverage

• Supreme Court, once again, rejects California treatment of arbitration (Ronald Mann, June 16, 2022)
• Announcement of opinions for Wednesday, June 15 (complete) (Angie Gou, June 15, 2022)
• Conservative justices seem again poised to reverse California courts on arbitration issue (Ronald Mann, April 1, 2022)
• Justices to consider California’s private-attorney-general exception to arbitration clause (Ronald Mann, March 29, 2022)
• Court sets quiet March argument calendar (Amy Howe, January 28, 2022)
• Justices will take up cases on arbitration, locomotives, and Congress’ war powers  (Amy Howe, December 15, 2021)
• First Amendment questions and California arbitration battles (Mitchell Jagodinski, May 28, 2021)

Privacy Overview

This Report summarizes an opinion issued on December 10, 2021 (Part I); and cases granted review on December 10 and 15, 2021 (Part II).

Cases Granted Review: Viking River Cruises, Inc. v. Moriana , 20-1573

Viking River Cruises, Inc. v. Moriana, 20-1573. The question presented is “[w]hether the Federal Arbitration Act requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under [the California Private Attorneys General Act].” The California Private Attorneys General Act (PAGA) is akin to a qui tam law, enlisting individual plaintiffs as private attorneys general to recover civil penalties for the state for violations of California’s Labor Code, with a share going to affected employees. Respondent Angie Moriana worked as a sales representative for petitioner Viking River Cruises. Ms. Moriana filed a lawsuit in state court in 2018 under PAGA alleging numerous violations of the California Labor Code and sought relief on behalf of hundreds of other “aggrieved current and former employees.” Viking moved to compel arbitration, pointing to Moriana’s employment agreement, which contained a provision agreeing to resolve all future employment-related disputes with Viking via bilateral arbitration. The arbitration provision specifically stated that, in arbitration, the parties would use individualized rather than class, collective, representative, or private attorney general action procedures. The trial court denied the motion, holding that Moriana’s “representative PAGA claims cannot be compelled to arbitration under California law.” The California Court of Appeal affirmed, relying on the California Supreme Court’s ruling in Iskanian v. CLS Transp. Los Angeles, LLC, 327 P.3d 129 (Cal. 2014), which held that the right to bring a PAGA action cannot be waived prospectively, whether in an arbitration agreement or any other type of contract. The California Supreme Court denied review.

In AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the Court addressed a California rule that bans on class-action procedures in arbitration were deemed unconscionable. Concepcion held that rule preempted by the FAA because it “‘interfere[d] with fundamental attributes of arbitration,’ by imposing formal classwide arbitration procedures on the parties against their will.” In Iskanian, the California Supreme Court concluded that Concepcion did not apply to bans on PAGA suits, which it found unenforceable under state law. The court reasoned that the real party in interest under PAGA is the state, on whose behalf the PAGA plaintiff seeks penalties. Because “a PAGA action is a dispute between an employer and the state Labor and Workforce Development Agency,” and because the state is not a party to the agreement invoked to bar the claim, the court held that permitting the PAGA action to proceed would not conflict with the FAA’s requirement that private arbitration agreements be enforced as between the parties. The court cited EEOC v. Waffle House, Inc., 534 U.S. 279 (2002), which held that a lawsuit brought by the Equal Employment Opportunity Commission to vindicate injury to an employee was not precluded by the employee’s arbitration agreement.

Viking argues in its petition that the Iskanian rule directly conflicts with Concepcion and Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), which reaffirmed that, in the FAA, “Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.” States Viking: “there is no meaningful distinction between the class action in Concepcion, the collective action in Epic, and the representative PAGA action here. Each one involves a plaintiff who insists that her right to litigate on behalf of others trumps her agreement to arbitrate individually. Each effort is equally preempted by the FAA.” According to Viking, “[r]epresentational PAGA claims are no more compatible with traditional bilateral arbitration agreements and the characteristic features of arbitration than class actions.” And Viking finds EEOC v. Waffle House, Inc. readily distinguishable: “PAGA proceedings are initiated by the very person who agreed to arbitrate bilaterally, not by a government agency that was a stranger to the agreement.”

[Editor’s note: Some of the language in the background section of the summary above was taken from the petition for writ of certiorari and brief in opposition.]

Related Posts

Supreme Court Report: Volume 30, Issue 8

Supreme court report: volume 30, issue 12, supreme court report: volume 30, issue 11, connect with naag and the attorney general community.

Create a NAAG account to subscribe to our newsletters or mailing lists.

Request an Update / Report an Error

• Newsletters
• Account Activating this button will toggle the display of additional content Account Sign out

The Supreme Court Screwed Over Workers Again—but Not As Badly As It Could Have

A mixed decision leaves some hope that blue states can still combat wage theft..

Since the mid-1980s, corporations have been laser-focused on gutting workers’ ability to enforce fundamental workplace protections in courts. On Wednesday, the Supreme Court handed them a big win—albeit one that holds out a glimmer of hope for states seeking to enforce their laws.

In Viking River Cruises, Inc. v. Moriana , the court held that the Federal Arbitration Act—a 1925 law intended to aid enforcement of contracts to arbitrate conflicts between businesses in commercial transactions—preempts a California rule that has allowed workers to hold lawbreaking employers accountable for workplace-wide violations before judges and juries. The decision represents yet another blow to workers from a Supreme Court dominated by corporate interests.

How did we get here? Decades of underfunding and understaffing left federal and state agencies unable to fully enforce labor standards. Employers took advantage of a deregulated economy, and wage theft was at epidemic levels throughout the country in the 2000s. One study found that 26 percent of low-paid workers in three cities were paid less than the legally required minimum wage, that 19 percent had unpaid or underpaid overtime violations, and that 68 percent had experienced at least one pay-related violation in the previous week. Another study estimated that employers stole $50 billion per year from workers’ wages.

In response to the labor standards underenforcement crisis, California passed the Private Attorneys General Act (PAGA), the law at the heart of Viking River Cruises . As several amicus briefs in the case highlighted, PAGA was enacted to expand the state’s workplace enforcement capacity and root out workplace-wide violations by allowing workers to seek civil penalties for violations and empowering them to seek penalties for all violations across a workplace in a single lawsuit. The lion’s share of the penalties (75 percent) goes to the state, with the remainder distributed among affected workers.

Sign Up for the Surge

The most important political nonsense of the week, delivered to your inbox every Saturday.

Thanks for signing up! You can manage your newsletter subscriptions at any time.

PAGA gives California workers—and the attorneys who represent them—an important tool to root out workplace-wide violations and deter employer lawbreaking. At the same time, it generates revenue for the state to fund future enforcement work aimed at creating a culture of compliance in industries with historically high rates of violations. One report found that PAGA improved employer compliance, generated over $88 million in revenue in 2019 alone, and funded a significant number of state Labor Department positions and enforcement initiatives.

Unfortunately, corporations had already been working to limit worker lawsuits—the other critical component of workplace law enforcement—through forced arbitration provisions and class action waivers. A series of Supreme Court decisions transformed the 1925 Arbitration Act into a shield that allowed corporations to unilaterally impose arbitration provisions on their employees and shunt workers’ cases into private, secret arbitration—despite ample evidence that Congress did not intend the law to apply to employment contracts. Most egregiously, in 2018 the court’s conservative majority held in Epic Systems v. Lewis that class and collective action waivers included in arbitration provisions were enforceable—meaning that where employers imposed such provisions, they could force workers to proceed one by one.

As a direct result of the Supreme Court’s misreading of the Federal Arbitration Act, forced arbitration provisions and class action waivers are now everywhere, imposed when workers start a job, or at any time after they’ve been hired, but usually buried in fine print. In forced arbitration, there’s no judge or jury. Instead, an arbitrator—typically a corporate lawyer or a former judge—is paid by the hour to adjudicate a claim. Workers lack the protections of being in court, including the right to fully discover information in the employer’s possession and the right to appeal.  More than 60 million workers are now subject to forced arbitration provisions, including over 59 percent of Black workers and nearly 58 percent  of women workers, and the number is expected to dramatically increase . And because most workers subject to forced arbitration abandon their claims rather than proceed alone in a stacked forum, forced arbitration is helping employers pocket billions in stolen wages.

That brings us to Viking River Cruises . California’s Supreme Court had adopted a rule, in the Iskanian case, recognizing that a worker who brings a PAGA action to root out workplace-wide violations is doing so on behalf of the state. And because the state was not a party to any arbitration provision, the worker’s PAGA claims—for both violations that affected them personally and for workplace-wide violations that affected other workers—could not be sent to arbitration. This allowed PAGA suits to continue, and because PAGA penalties can become quite substantial—for example, $100 per violation per affected worker, per pay period—employers can face hefty costs for violating the law. In that way, PAGA has proved a major deterrent for employer lawbreaking.

That’s why Viking River Cruises (and a host of massive corporations, including Uber ) attacked the California rule. They did so by arguing that PAGA actions were nothing but a type of class action. Viking River Cruises insisted that because of the class action waiver it had imposed on the worker in the case, Angie Moriana, it could force her to waive any ability to bring a PAGA claim for violations that affected other workers, both in court and in arbitration, per the court’s 2018 Epic Systems decision. Because any one worker’s PAGA claim will be low, and the worker will only recover 25 percent of it themselves, such a rule would eliminate the incentive for a worker subject to a forced arbitration provision to bring a PAGA action in the first place.

The court’s decision, an 8–1 result, did not go as far as the corporations wanted—in part, perhaps, because it was tempered by the liberal justices. But the decision still deals a serious blow to PAGA as currently enacted and interpreted. Since PAGA claims cannot be split up, the court said California had coerced employers into giving up their right to arbitrate their PAGA claims on an individual, one-by-one basis in arbitrations, and that the FAA therefore preempted California’s rule in Iskanian . As a result, Viking River Cruises can force Moriana, and workers like her, to take their individual PAGA claim into arbitration.

It’s breathtaking to see the court evince such deep concern about the allegedly coercive effects of PAGA for employers while ignoring the coercion inherent when employers impose forced arbitration onto workers as a condition of employment.

The court’s decision is, for now, not all bad news for employees. The majority indicated that while Viking River Cruises could force Moriana to arbitrate her individual claim, it could not completely extinguish the claims she had filed on behalf of the state for violations affecting other workers. However, because the majority determined that PAGA does not allow a worker to continue a suit only for claims affecting other workers, those other claims must be dismissed. But the majority left some room for California to make changes to PAGA. As Justice Sonia Sotomayor elaborated in her concurring opinion, California courts or the state legislature can clarify that workers may still litigate their non-individual claims—that is, their claims for violations affecting other workers—even if their individual PAGA claims are sent to arbitration.

Some are interpreting these limitations on the court’s holding as a sign that PAGA can survive as an effective tool for enforcement of workplace protections. Advocates should absolutely seize on those limitations and fight to restore California’s capacity to hold lawbreaking corporations accountable for workplace-wide violations. And they should do the same in states like New York, which has also been considering a bill inspired by PAGA .

But we should be concerned with a newly constituted Supreme Court that has shown itself to have no regard for precedent and to be utterly willing to use its power to achieve its desired results. Any limitations suggested by the majority in Viking River Cruises do not signal such limitations will be respected in the future, no matter what the majority or Justice Sotomayor says. (Notably, Justices Amy Coney Barrett, John Roberts, and Brett Kavanaugh refused to join these potentially limiting portions of the opinion.)

All told, Viking River Cruises underscores the need for legislative reform to the Federal Arbitration Act. Congress made a significant step forward this year by restoring workers’ rights to go before judges and juries, and to do so collectively, in sexual harassment and assault cases. Now it must finish what it started by passing the Forced Arbitration Injustice Repeal (FAIR) Act.

In the meantime, agencies can act to protect workers. For example, the Department of Labor can roll back Trump-era guidance that the agency deprioritize workplaces with forced arbitration and instead publicly signal that it is directing enforcement resources toward such workplaces, particularly in sectors where compliance is low. And the Equal Employment Opportunity Commission should reinstate that agency’s enforcement guidance on forced arbitration, which the agency rescinded in the Trump era. These actions would send powerful messages to employers that their use of forced arbitration will only invite more scrutiny.

Get Email Updates from Ballotpedia

First Name *

Please complete the Captcha above

Ballotpedia on Facebook

  Share this page

  Follow Ballotpedia

Ballotpedia on Twitter

Viking river cruises, inc. v. moriana.

• Supreme Court cases, October term 2023-2024
• Supreme Court cases, October term 2022-2023

Supreme Court cases, October term 2021-2022

• Supreme Court cases, October term 2020-2021
• Supreme Court cases, October term 2019-2020
• Supreme Court cases, October term 2018-2019
• Supreme Court cases, October term 2017-2018
• Supreme Court cases, October term 2016-2017
• Supreme Court cases, October term 2015-2016
• CHIEF JUSTICE ERAS
• HISTORIC SCOTUS CASES
• MAJOR CASES OF THE SUPREME COURT 2016 TERM
• What happens to this term's major SCOTUS cases in a 4-4 split?
• MAJOR CASES OF THE SUPREME COURT 2014 TERM
• MAJOR CASES OF THE SUPREME COURT 2013 TERM
• MAJOR CASES OF THE SUPREME COURT 2012 TERM
• 2022 VACANCY AND JACKSON CONFIRMATION
• 2020 VACANCY AND BARRETT CONFIRMATION
• 2018 VACANCY AND KAVANAUGH CONFIRMATION
• 2017 VACANCY AND GORSUCH CONFIRMATION

Viking River Cruises, Inc. v. Moriana is a case that was decided by the Supreme Court of the United States on June 15, 2022, during the court's October 2021-2022 term . The case was argued before the court on March 30, 2022.

In an 8-1 ruling, the court reversed the California Second District Court of Appeal's judgment and remanded the case for further proceedings, holding that the Federal Arbitration Act (FAA) preempts Iskanian because it precludes division of California Private Attorneys General Act lawsuits into individual and non-individual claims through an arbitration agreement. Justice Samuel Alito authored the majority opinion. Justice Sonia Sotomayor filed a concurring opinion. Justice Amy Coney Barrett filed an opinion concurring in part and concurring in the judgment, joined in full by Justice Brett Kavanaugh , and joined as to all but the footnote by Chief Justice John Roberts . Justice Clarence Thomas filed a dissenting opinion. [2] Click here for more information about the ruling.

• The case : Angie Moriana brought a representative action—an action in which a plaintiff brings a lawsuit on behalf of others—against Viking River Cruises, Inc. (Viking) for violations of California labor code. Viking moved to dismiss the action, arguing that an arbitration agreement Moriana had signed as a condition of her employment required that all employment disputes be arbitrated. The trial court denied Viking's motion citing the California Supreme Court 's precedent in Iskanian v. CLS Transportation Los Angeles, LLC (2014), finding arbitration agreements that waive the right to bring representative actions under California law unenforceable. After unsuccessful appeals to the California appellate courts, Viking appealed to the U.S. Supreme Court on the theory that the California Supreme Court's holding in Iskanian was overruled by the U.S. Supreme Court's 2018 decision in EPIC Systems Corp. v. Lewis . Click here to learn more about the case's background.
• The issue: The case concerned a potential conflict between federal and state arbitration laws in certain types of arbitration proceedings.
• The question presented : "Whether the Federal Arbitration Act requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under [the California Private Attorneys General Act]." [3]
• The outcome : The U.S. Supreme Court reversed the California Second District Court of Appeal's judgment and remanded the case for further proceedings.

The case came on a writ of certiorari to the California Second District Court of Appeal . To review the lower court's opinion, click here .

• 2 Background
• 3 Question presented
• 4.2 Transcript
• 5.1 Opinion
• 5.2.1 Justice Sotomayor
• 5.2.2 Justice Barrett
• 5.3 Dissenting opinion
• 5.4 Text of the opinion
• 6 October term 2021-2022
• 8 External links
• 9 Footnotes

The following timeline details key events in this case:

• June 15, 2022: The U.S. Supreme Court reversed the California Second District Court of Appeal's judgment and remanded the case for further proceedings.
• March 30, 2022: The U.S. Supreme Court heard oral argument.
• December 15, 2021 : The U.S. Supreme Court agreed to hear the case.
• May 10, 2021 : Viking River Cruises appealed to the U.S. Supreme Court.
• December 9, 2020 : The California Supreme Court denied Viking River Cruises' petition for review.
• September 18, 2020 : The California Second District Court of Appeal affirmed the state trial court's order denying Viking River Cruises' motion to compel arbitration.

Angie Moriana worked as a sales representative for Viking River Cruises, Inc. (Viking) and signed an arbitration agreement as a condition of her employment. The agreement "required Moriana to waive any right to bring a class, collective, representative, or private attorney general action" for any disputes arising from her employment with Viking. [4] It also contained a provision that gave the arbitrator power to address disagreements over the validity or scope of the agreement itself.

Moriana sued Viking in California state court "on behalf of the state and all other similarly situated aggrieved employees, alleging various Labor Code violations in a single cause of action" under the California Labor Code Private Attorneys General Act of 2004 (PAGA). [4] Viking moved to dismiss Moriana's suit and force her to arbitrate her claim, based on the arbitration agreement Moriana signed. [4]

The trial court denied Viking's motion to dismiss and allowed Moriana's claim to proceed in court. The court cited the California Supreme Court 's 2014 holding in Iskanian v. CLS Transportation Los Angeles, LLC for precedent, which held that arbitration agreements that waive the right to bring representative actions under PAGA are unenforceable. A representative action is one in which a single representative—in this case, Moriana—brings an action on behalf of similarly-situated parties. Viking argued that the U.S. Supreme Court's holding in EPIC Systems Corp. v. Lewis (2018), which instructed federal courts to enforce individual arbitration agreements on their terms, overruled the California Supreme Court's holding in Iskanian . The trial court rejected this argument, finding that the interested party in PAGA representative claims is the state, not the individual defendant. In other words, the plaintiff is working as a proxy for the state and is not seeking individual relief on their own behalf. They are seeking the "recovery of civil penalties that otherwise would have been assessed and collected by the [state's] Labor Workforce Development Agency." [4]

Because the trial court found that the issue litigated in Epic was distinct from the facts of Iskanian , it held that Iskanian remained good law and applied it to the present case. On appeal, the California Second District Court of Appeal affirmed . [4] After the California Supreme Court denied Viking's request to take up the case, Viking appealed to the U.S. Supreme Court on May 10, 2021. [3]

Question presented

The petitioner presented the following question to the court: [3]

Oral argument

Audio of oral argument: [6]

Your browser doesn't support the audio tag.

Transcript of oral argument: [7]

In an 8-1 ruling, the court reversed the California Second District Court of Appeal's judgment and remanded the case for further proceedings, holding that that the Federal Arbitration Act (FAA) preempts Iskanian because it prevents the division of California Private Attorneys General Act (PAGA) lawsuits into individual and non-individual claims through an arbitration agreement. Justice Samuel Alito authored the majority opinion. Justice Sonia Sotomayor filed a concurring opinion. Justice Amy Coney Barrett filed an opinion concurring in part and concurring in the judgment, joined in full by Justice Brett Kavanaugh , and joined as to all but the footnote by Chief Justice John Roberts . Justice Clarence Thomas filed a dissenting opinion. [2]

In the court's majority opinion, Justice Samuel Alito wrote: [2]

Concurring opinion

Justice sotomayor.

Justice Sonia Sotomayor filed a concurring opinion.

In her concurring opinion, Justice Sotomayor wrote: [2]

Justice Barrett

Justice Amy Coney Barrett filed an opinion concurring in part and concurring in the judgment, joined in full by Justice Brett Kavanaugh , and joined as to all but the footnote by Chief Justice John Roberts .

In her concurrence, Justice Barrett wrote: [2]

Dissenting opinion

Justice Clarence Thomas filed a dissenting opinion.

In his dissent, Justice Thomas wrote: [2]

Text of the opinion

Read the full opinion here .

October term 2021-2022

The Supreme Court began hearing cases for the term on October 4, 2021. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June. [9]

The court agreed to hear 68 cases during its 2021-2022 term . [10] Four cases were dismissed and one case was removed from the argument calendar . [11]

The court issued decisions in 66 cases during its 2021-2022 term . Three cases were decided without argument. Between 2007 and 2021, SCOTUS released opinions in 1,128 cases, averaging 75 cases per year.

Supreme Court of the United States

History of the Supreme Court

External links

• Search Google News for this topic
• U.S. Supreme Court docket file - Viking River Cruises, Inc. v. Moriana (petitions, motions, briefs, opinions, and attorneys)
• SCOTUSblog case file for Viking River Cruises, Inc. v. Moriana
• ↑ Joined the concurrence as to all but the footnote
• ↑ 2.0 2.1 2.2 2.3 2.4 2.5 U.S. Supreme Court, Viking River Cruises, Inc. v. Moriana , decided June 15, 2022
• ↑ 3.0 3.1 3.2 U.S. Supreme Court , "Viking River Cruises, Inc. v. Moriana: PETITION FOR A WRIT OF CERTIORARI," filed May 10, 2021
• ↑ 4.0 4.1 4.2 4.3 4.4 California Second District Court of Appeal, Moriana v. Viking River Cruises, Inc. , decided September 18, 2020
• ↑ 5.0 5.1 5.2 5.3 5.4 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
• ↑ Supreme Court of the United States , "Oral Argument - Audio," argued March 30, 2022
• ↑ Supreme Court of the United States , "Oral Argument - Transcript," argued March 30, 2022
• ↑ The same is true of Part I.
• ↑ SupremeCourt.gov , "The Supreme Court at Work: The Term and Caseload," accessed February 4, 2021
• ↑ Consolidated cases are counted as one case for purposes of this number.
• ↑ U.S. Supreme Court , "Order List: 593 U.S.," May 17, 2021

Chief justice : Roberts Associate justices: Alito • Barrett • Gorsuch • Jackson • Kagan • Kavanaugh • Sotomayor • Thomas

Breyer • Kennedy • O'Connor • Souter

Burger • Chase • Ellsworth • Fuller • Hughes • Jay • Marshall • Rehnquist • Rutledge • Stone • Taft • Taney • Vinson • Waite • Warren •

Baldwin • Barbour • Black • Blackmun • Blair • Blatchford • Bradley • Brandeis • Brennan • Brewer • Brown • Burton • Butler • Byrnes • Campbell • Cardozo • Catron • Chase • Clark • Clarke • Clifford • Curtis • Cushing • Daniel • Davis • Day • Douglas • Duvall • Field • Fortas • Frankfurter • Ginsburg • Goldberg • Gray • Grier • Harlan I • Harlan II • Holmes • Hunt • Iredell • H. Jackson • R. Jackson • T. Johnson • W. Johnson, Jr. • J. Lamar • L. Lamar • Livingston • Lurton • Marshall • Matthews • McKenna • McKinley • McLean • McReynolds • Miller • Minton • Moody • Moore • Murphy • Nelson • Paterson • Peckham • Pitney • Powell • Reed • Roberts • W. Rutledge • Sanford • Scalia • Shiras • Stevens • Stewart • Story • Strong • Sutherland • Swayne • Thompson • Todd • Trimble • Van Devanter • Washington • Wayne • B. White • Whittaker • Wilson • Woodbury • Woods

• Pages using DynamicPageList3 dplreplace parser function
• United States Supreme Court
• SCOTUS OT 2021
• Decided SCOTUS cases
• SCOTUS 8-1 opinions
• SCOTUS majority opinions, Samuel Alito
• SCOTUS dissenting opinions, Clarence Thomas

Ballotpedia features 486,932 encyclopedic articles written and curated by our professional staff of editors, writers, and researchers. Click here to contact our editorial staff or report an error . For media inquiries, contact us here . Please donate here to support our continued expansion.

Information about voting

• What's on my ballot?
• Where do I vote?
• How do I register to vote?
• How do I request a ballot?
• When do I vote?
• When are polls open?
• Who represents me?

2024 Elections

• Presidential election
• Presidential candidates
• Congressional elections
• Ballot measures
• State executive elections
• State legislative elections
• State judge elections
• Local elections
• School board elections

2025 Elections

• State executives
• State legislatures
• State judges
• Municipal officials
• School boards
• Election legislation tracking
• State trifectas
• State triplexes
• Redistricting
• Pivot counties
• State supreme court partisanship
• Polling indexes

Public Policy

• Administrative state
• Criminal justice policy
• Education policy
• Environmental, social, and corporate governance (ESG)
• Unemployment insurance
• Work requirements
• Policy in the states

Information for candidates

• Ballotpedia's Candidate Survey
• How do I run for office?
• How do I update a page?
• Election results
• Send us candidate contact info

Get Engaged

• Donate to Ballotpedia
• Report an error
• Newsletters
• Ballotpedia podcast
• Ballotpedia Boutique
• Media inquiries
• Premium research services
• 2024 Elections calendar
• 2024 Presidential election
• Biden Administration
• Recall elections
• Ballotpedia News

SITE NAVIGATION

• Ballotpedia's Sample Ballot
• 2024 Congressional elections
• 2024 State executive elections
• 2024 State legislative elections
• 2024 State judge elections
• 2024 Local elections
• 2024 Ballot measures
• Upcoming elections
• 2025 Statewide primary dates
• 2025 State executive elections
• 2025 State legislative elections
• 2025 Local elections
• 2025 Ballot measures
• Cabinet officials
• Executive orders and actions
• Key legislation
• Judicial nominations
• White House senior staff
• U.S. President
• U.S. Congress
• U.S. Supreme Court
• Federal courts
• State government
• Municipal government
• Election policy
• Running for office
• Ballotpedia's weekly podcast
• About Ballotpedia
• Editorial independence
• Job opportunities
• News and events
• Privacy policy
• Disclaimers

• Littler GPS
• Workplace Policy Institute
• Littler CaseSmart
• Littler Home Care Toolkit
• Littler LaborSmart
• ComplianceHR
• Littler X-celerator Toolkits
• Littler Knowledge Management
• General Data Protection Regulation (GDPR)
• Littler Edge
• Littler Pay Equity Assessment
• Workplace Training
• Littler onDemand
• Remote Work Toolkit for Employers
• Self-Service Toolkits
• Recognized for Innovation
• We’re ready for your tomorrow – because we’re built for it.
• Littler Investigation Toolkit for Employers
• Littler Inclusion, Equity and Diversity Playbook

Supreme Court Permits Arbitration of Individual PAGA Claims

The United States Supreme Court’s decision in  Viking River Cruises v. Moriana  will dramatically impact employers’ rights to enforce arbitration agreements related to claims under California’s Private Attorneys General Act (PAGA). 1   This decision, which is a significant win for employers with interests in California, will allow employers to compel arbitration of a PAGA plaintiff’s individual PAGA claims. In addition, because a PAGA plaintiff bound to arbitrate lacks standing to prosecute claims on behalf of other aggrieved employees, the remaining PAGA claims must be dismissed.

The Nature of PAGA

By way of background, California’s Labor and Workforce Development Agency (LWDA) is authorized to assess and collect civil penalties against employers for violations of certain provisions of the California Labor Code. The California Legislature, on the theory the LWDA lacked sufficient resources to fully enforce the Labor Code, enacted PAGA, which took effect on January 1, 2004.

PAGA authorizes an “aggrieved” employee, i.e ., an employee who purportedly has had their Labor Code rights violated, to step into the shoes of the state Labor Commissioner and enforce certain violations of California labor law. PAGA allows for an employee to seek civil penalties against employers on behalf of the state.  Further, only an individual employee brings a claim under PAGA, while other allegedly “aggrieved” employees do not participate in the lawsuit. Prior to the enactment of PAGA, such civil penalties could only be assessed and collected by the LWDA.

The default PAGA civil penalty is $100 per employee per pay period for an initial violation and $200 per pay period for any subsequent violations. If a PAGA plaintiff succeeds, 75% of any penalty recovered is paid to the LWDA for enforcement of labor laws and for education of employers and employees about their rights and responsibilities, with the remainder distributed among aggrieved employees. A plaintiff prevailing on a PAGA claim may also recover attorneys’ fees. In practice, employees suing under PAGA receive little of the recovery, with the majority going to the state and the attorneys who file PAGA cases against employers.

Since its enactment, PAGA has been the source of much confusion and controversy.  PAGA was quickly amended within its first year 2  and has been amended twice more. 3  PAGA has also been subject to several court challenges, including unsuccessful efforts to minimize PAGA actions and penalties through carefully drafted arbitration agreements, which would limit employees from bringing actions on behalf of the state and other “aggrieved” employees.  

Previously, California Law Precluded the Arbitration of Individual PAGA Claims

Until now, California law, including the California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC, 4  precluded employers from enforcing pre-dispute arbitration agreements requiring employees to arbitrate their individual PAGA claims.  In Iskanian, the court held while employees may waive their right to participate in a class action by agreeing to individual arbitration, any waivers of the right to bring a PAGA action on behalf of the state are unenforceable. 5  

In addition, Iskanian suggested that individual PAGA claims for violations the plaintiff alleged they personally suffered could not be separately arbitrated, because prosecuting these claims in separate arbitrations would not serve the deterrent purpose of PAGA.  The California Supreme Court later rejected the concept of an “individual component” to PAGA claims that could be separated from the representative claims of all alleged aggrieved employees. 6   Thus, for over 15 years, employers have been left with the impossible choice of attempting to arbitrate PAGA claims on a representative basis or foregoing arbitration altogether.

The United States Supreme Court Holds Individual PAGA Claims Can Be Arbitrated

Viking River Cruises, Inc. v. Moriana  marks the first time the United States Supreme Court has substantively considered PAGA.  In the 8-1 7  holding, the Supreme Court clearly and fundamentally changed California law, finding an employee bound to individually arbitrate claims must prosecute claims for civil penalties under PAGA on an individual basis in arbitration. 

In 2018, plaintiff Moriana filed a lawsuit in California state court seeking PAGA penalties for numerous alleged California Labor Code violations.  Defendant Viking River Cruises moved to compel arbitration, arguing Moriana’s claims were subject to arbitration pursuant to her signed employment agreement, which contained a provision compelling employment-related disputes with Viking to bilateral arbitration, and precluded arbitration of any dispute as a class, collective, or representative action.  The agreement also contained a severability clause providing that any unenforceable portion of the waiver should be severed. The trial court denied Viking’s motion, holding Moriana’s representative PAGA claims could not be compelled to arbitration, and the California Court of Appeal affirmed, relying on Iskanian , while the California Supreme Court denied review.

In concluding Moriana must be compelled to arbitrate her individual PAGA claims, the Supreme Court acknowledged PAGA’s unique nature.  All PAGA actions are “representative” in the sense they must be brought by employees acting as agents of the state.  The Supreme Court also agreed with the Iskanian Court’s prohibition on a categorical waiver of the right to bring a PAGA action, and it refused to disturb Iskanian ’s holding that representative-action waivers are unenforceable. 

Nonetheless, the Supreme Court took issue with the portion of Iskanian ’s holding that precluded the enforcement of agreements to arbitrate individual PAGA claims.  The Court found requiring arbitration of all PAGA claims, both the plaintiff’s individual claims and the claims of the other aggrieved employees, violates the Federal Arbitration Act (FAA) because it permits parties to expand the scope of arbitration to include claims that were never agreed to be arbitrated, and because it would allow a plaintiff to “unite a number of claims in a single-package suit,” despite the fact the Supreme Court has previously held “arbitration is poorly suited to the higher stakes of massive-scale disputes of this kind.”  Requiring an employer to choose between arbitrating all the alleged aggrieved employees’ claims or none of them was coercive and inconsistent with the FAA. 

The Supreme Court also rejected other potential arguments against arbitration, including flatly rejecting the notion an arbitration agreement might be unenforceable without the state’s consent:  “And regardless of whether a PAGA action is in some sense also a dispute between an employer and the State, nothing in the FAA categorically exempts claims belonging to sovereigns from the scope of §2.”

Ultimately, the Supreme Court concluded the FAA preempts the portion of Iskanian that precludes the division of PAGA claims into individual and non-individual claims.  The categorical PAGA waiver in the agreement between Moriana and Viking was unenforceable, but under the severance clause, Viking was permitted to enforce the portion of the waiver that mandated Moriana arbitrate her own individual PAGA claims.

Finally, as for the remaining non-individual PAGA claims of the alleged aggrieved employees, the Court held they must be dismissed.  Because Moriana’s individual claims were required to be prosecuted in arbitration, she lacked standing to prosecute the PAGA claims on behalf of the other alleged aggrieved employees.  Though Justice Sotomayor joined the Court’s opinion, she wrote separately to suggest the California Legislature “is free” to modify the standing requirements under PAGA, but she also made clear such a change must be “within state and federal constitutional limits,” a high bar. 

While the California Legislature 8  (and the Plaintiffs’ bar) will certainly look for weaknesses in this opinion, there is no doubt it provides a significant opportunity for employers to lessen PAGA’s tight grip.

Takeaways from the Decision

Viking River Cruises is an important development and marks a sea change in California law, as it makes clear employers can compel employees to arbitrate their individual claims under PAGA, reversing California precedent to the contrary.  The key takeaways are as follows:

• Individual PAGA claims can be arbitrated and Iskanian is overruled to that extent.
• “Non-individual” PAGA claims of other alleged aggrieved employees are not subject to arbitration, but because a PAGA plaintiff compelled to arbitration lacks standing to adjudicate the remaining non-individual PAGA claims, the remaining PAGA claims should be dismissed.
• Clients are strongly encouraged to examine their arbitration agreements and revise them to permit compelling arbitration of individual PAGA claims, while ensuring the agreement has severability language, which the Court found compelling in its decision.

See Footnotes

1  Littler represented Viking River Cruises, Inc., in this case.

2  Senate Bill 1809 (establishing that as a precondition to bringing a civil action under PAGA, an aggrieved employee would have to comply with specified procedural and administrative requirements, including giving written notice to the LWDA and the employer).

3  Assembly Bill 1506 (providing an employer with the right to cure an alleged violation of failing to provide on a pay stub the inclusive dates of the pay period (Labor Code section 226(a)(6)) and the name and address of the legal employer (Labor Code section 226(a)(8)) before an employee may bring a civil action seeking PAGA penalties); Senate Bill 836 (mandating online PAGA filings and transmission of all items submitted to the LWDA, as well as a $75 filing fee for new case notices and expanding the LWDA’s investigative period of new cases from 30 to 60 days); Assembly Bill 1654 (excluding construction workers from PAGA when covered by a collective bargaining agreement).

4  59 Cal. 4th 348 (2014).

5   Iskanian , 59 Cal. 4th at 383-389.

6   Kim v. Reins , 9 Cal. 5th 73, 86-87 (2020).

7  Only Justice Thomas dissented from the opinion.

8  Indeed, mere hours after the Supreme Court’s opinion, one California senator signaled he is preparing language to get around the standing issue.  Any such proposed legislation will no doubt be vigorously opposed by business groups.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.

Get the Latest From Littler

Subscribe RSS Updates

Laura E. Devane

Robert F. Friedman

Julie M. McGoldrick

Joseph M. Wientge Jr.

Focus areas, related news & analysis.

Law. Workers. Organizing.

• Follow OnLabor on X
• Subscribe via RSS

Viking River: Understanding What the Court’s Newest Arbitration Case Does to PAGA (and How California Can Fix It)

Anita Alem is a student at Harvard Law School.

The Supreme Court ruled on Wednesday in Viking River Cruises Inc., v. Moriana that the Federal Arbitration Act (FAA) preempted in part California’s “Private Attorney Generals Act” (PAGA). The majority opinion by Justice Alito nonetheless hinted that the legislature may have leeway to amend the statute and perhaps avoid FAA preemption. 

In 2004, the California legislature enacted PAGA to increase enforcement of the state labor code. First, PAGA enables individual plaintiff-employees to sue their employer on behalf of the state for labor violations in a principal-agent structure. Second, PAGA includes a joinder device that permits plaintiff-employees to join claims on behalf of other fellow current or former employees. As part of the public nature of the claim, in a successful PAGA suit, the California Labor and Workforce Development Agency receives 75 percent of the award while the affected employees receive the remaining 25 percent. California courts have posited that in a PAGA suit, although an employee is the plaintiff, the state is the party in interest. 

In Viking River Cruises , plaintiff Angie Moriana filed a PAGA claim against her former employer for failing to pay her final wages within 72 hours. She also joined several additional labor code violations on behalf of her former coworkers. Viking moved to compel arbitration, arguing that Moriana’s employment agreement included an arbitration clause that waived her ability to bring a class action, collective action, or PAGA claim. The state trial court denied Viking’s motion under the California Supreme Court “ Iskanian rule” that PAGA waivers are contrary to California public policy. 

The Supreme Court, considering whether the FAA preempted the Iskanian rule and therefore required arbitration of Moriana’s claims, broke the rule in two parts, in accordance with the two parts of PAGA. First, the Court found, the Iskanian rule prohibited waiving PAGA standing; in other words, it forbade the employee-plaintiff from waiving the ability to bring a suit on behalf of the state for a labor code violation. Second, the Court found the Iskanian rule prohibited the plaintiff-employee’s individual wage violation claim from being separated from those of the other employee’s claims and individually arbitrated. The Court considered each part of the rule separately to determine whether it was in conflict with, and preempted by, the FAA.

Analyzing the first part of the Iskanian rule, the Court held that the FAA is not in conflict with the principal-agent structure of PAGA that enables plaintiffs to represent the state in lawsuits. The Court noted that “actions in which a single agent litigates on behalf of a single principal are part of the basic architecture of much of substantive law”; they include “shareholder-derivative suits, wrongful-death actions, [and] trustee actions.” The Court rejected the defendant’s argument that the principal-agent structure of PAGA is in conflict with bilateral arbitration. In other words, the Court found it was entirely possible for parties to arbitrate claims that may have principal-agent structures. As Justice Sotomayor noted within her concurrence, the majority provided “several important limitations on the preemptive effect of the [FAA].” For example, the majority explained that while the Court’s FAA jurisprudence established that states cannot interfere with “bilateral arbitration,” this principle does not definitively require arbitration to occur strictly between exactly two parties. Chief Justice Roberts, Justice Kavanaugh, and Justice Barrett did not join this part of the opinion; the justices, in a concurrence penned by Justice Barrett, expressed that the case should have been decided entirely on the second prong of the Iskanian rule, without addressing the principal-agent nature of the claim.

Turning to the second part of the Iskanian rule, all but Justice Thomas agreed that the FAA preempted the Iskanian rule to the extent it forbade disaggregating and arbitrating Moriana’s individual claim from those of her coworkers. The Court found that by prohibiting the claims from being disaggregated, the Iskanian rule required Viking to arbitrate not only Moriana’s claim, but also all of the joined claims, exposing Viking to greater risk and forcing Viking to arbitrate claims that it had not consented to arbitrating within its initial agreement. Under the Court’s holding in Concepcion , which held that class arbitration is inconsistent with the “traditionally individualized form” of arbitration, and that “arbitration is poorly suited to the higher stakes of massive-scale disputes,” the FAA preempted the PAGA joinder device and required that Moriana’s claim be separable, and arbitrable, apart from the claims of the other employees. Else, the Court found, PAGA would “coerce parties to opt for a judicial forum” in violation of the FAA. Justice Alito wrote: “Requiring arbitration procedures to include a joinder rule of that kind 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.”

But if Moriana must pursue her claim in arbitration, what happens to those of the other employees whose claims had been joined to Moriana’s? The majority found that PAGA “provided no mechanism to adjudicate non-individual PAGA claims”; because her individual claim was subject to arbitration, Moriana lacked standing to litigate the joined claims. As a result, the Court recommended that the trial court dismiss the severed claims of Moriana’s fellow employees. Again, Chief Justice Roberts, Justice Kavanaugh, and Justice Barrett found this part of the opinion unnecessary and would have instead remanded such that the state court would determine what course of action to take. 

Justice Sotomayor, again, noted within her separate concurrence that the Court had left both the state court and the California legislature with reason for hope. The California state courts, as the arbiters of state law, could find that PAGA did provide Moriana with standing to pursue the claims on behalf of her fellow employees. Alternatively, the California legislature could conceivably amend the statute to create a mechanism for a plaintiff to have standing to pursue PAGA claims on behalf of fellow employees even if the plaintiff’s individual claim must be arbitrated. 

More in Supreme Court

Can Issue Preclusion Approximate Class Arbitration?

Muldrow v. City of St. Louis: The Title VII Balancing Act

At the Supreme Court, Will Bad History Lead to More Forced Arbitration?

Glacier: Do Hypothetical Facts Make Hypothetical Law?

Daily news & commentary.

Start your day with our roundup of the latest labor developments. See all

Starbucks and Workers United resume bargaining talks; Amazon is ordered to disclose records; Alabamians support UAW’s unionization efforts.

FTC bans noncompete agreements; DOL increases overtime pay eligibility; and Labor Caucus urges JetBlue remain neutral to unionization efforts.

Workers in Montreal organize the first Amazon warehouse union in Canada and Fordham Graduate Student Workers reach a tentative agreement with the university.

Supreme Court hears cases about 10(j) injunctions and forced arbitration; workers increasingly strike before earning first union contract

DOL and EEOC beat the buzzer; Striking journalists get big NLRB news

Historic unionization at Volkswagen's Chattanooga plant; DOL cracks down on child labor; NY passes tax credit for journalists' salaries.

OnLabor In The News

Fast company, bloomberg law, the guardian, more from onlabor.

Tracking Attacks on the NLRB: Fifth Circuit Draws Scrutiny as Venue Dispute Heats Up

John Fry on the Fifth Circuit's unusual order to the NLRB's attorneys in the SpaceX case

Tracking Attacks on the NLRB: Law Professors File Amicus Brief in SpaceX Case

John Fry on law professors' amicus brief in a venue dispute over SpaceX's suit against the NLRB.

Can States Use Economic Incentives to Discourage Card Check Agreements?

John Fry on labor law's market participant exception and recent state efforts to discourage organizing.

A New Era for Breastfeeding in the Workplace

Ellie Samuels on the PUMP Act and strategies to better support breastfeeding workers.

Tracking Attacks on the NLRB: SpaceX’s Suit Transferred and Starbucks Joins the Fray

John Fry on the latest developments from SpaceX and Starbucks.

Enjoy OnLabor’s fresh takes on the day’s labor news, right in your inbox.

U.S. Supreme Court deals major blow to California worker class actions

• Medium Text

• Related Documents
• Federal arbitration law trumps California rule, justices say
• Ruling will likely stem explosion in worker class actions

Sign up here.

Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab

Thomson Reuters

Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at [email protected].

Read Next / Editor's Picks

Industry Insight Chevron

Mike Scarcella, David Thomas

Karen Sloan

Henry Engler

Diana Novak Jones

• Real Estate
• Health Care
• Manufacturing
• Valley 200 – 2023
• Valley 200 Archive
• Events & Awards Nominations
• 2024 Events
• 2023 Events
• Event Recaps
• Open Nominations
• Custom Publishing
• Trusted Advisors
• Leaders to Know
• Roundtables
• On the Move: People and Companies
• Business Marketplace

Supreme Court Limits PAGA in Viking River Cruises Decision

A Los Angeles Superior Court judge and the state appellate court refused to dismiss the lawsuit. So Viking appealed to the Supreme Court.

The U.S. Supreme Court in an 8-1 decision backed the arguments of Viking River Cruises Inc. in a closely watched case that impacts a state law which allows employees of a business to sue over labor law violations even if they were not impacted by the violations.

The court’s ruling in Viking River Cruises, Inc. v. Moriana sends the case back to a lower state court.

Writing for the majority, Justice Samuel Alito said that the court found for Viking, in Woodland Hills, since Angie Moriana, a former Viking sales representative did not have standing to continue with her non-individual claims against the company under the Private Attorney General Act (PAGA).

“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,” the 22-page opinion concluded.

The cruise company was sued in 2018 by Moriana, on behalf of hundreds of workers, claiming the company violated several provisions of California’s wage-and-hour laws. Viking countered that Moriana and the other employees had agreed to arbitration and had waived any right to a class or private attorney general action.

Viking said in its petition to the high court that the California Supreme Court was wrong in a 2014 case that ruled an individual employee did not have to submit to arbitration, which they agreed to, after filing a PAGA claim.

The 2014 case was in opposition to two Supreme Court rulings from 2011 and 2018 that found the Federal Arbitration Act (FAA) superseded the California case, the company’s petition said.

Justice Clarence Thomas dissented from the majority opinion based on his belief that the FAA does not apply to proceedings in state courts.

“Accordingly, the FAA does not require California’s courts to enforce an arbitration agreement that forbids an employee to invoke the State’s Private Attorneys General Act,” Thomas wrote in his brief, one-page dissent.

Tom Manzo, founder and president of the California Business and Industrial Alliance, said in an email to the Business Journal that PAGA was “a toxic policy” that leaves employers and employees with less while trial attorneys make more.

“The financial impacts of PAGA have devastated businesses of all sizes in California, and we are grateful to the Court for hearing our arguments and rightfully ruling that businesses and employees should be allowed to resolve their disputes bilaterally and through arbitration, rather than through abusive, and often frivolous PAGA lawsuits,” wrote Manzo, who started the group, based in Sunland, in 2017 to specifically oppose the state law.

Featured Articles

Warner bros, tcm debut studio tour, setpoint gets breakthrough fda rulings, brent reinke and the 101 biotech corridor, related articles, oped: la olympics: let’s help minorities win, trimed reaches end stage in deal with henry schein, business events calendar.

11150 Santa Monica Boulevard, Suite 350 Los Angeles, CA 90025 323-549-5225

ADVERTISE WITH US

• Editorial Calendar
• Ad Inquiries
• About SFVBJ
• Newsstand Locations

Membership Center

• Join Our Membership
• Newsletter Sign-up
• Buy Back Issues
• Renew Your Subscription
• Reprint and Licensing Requests
• Forgot Your Password
• Reset Your Password

OTHER JOURNALS

• Los Angeles Business Journal
• Orange County Business Journal
• San Diego Business Journal

*The San Fernando Valley Business Journal is committed to making our website’s content accessible and user friendly to our subscribers. If you are having difficulty viewing or navigating the content of this website, or notice any content, feature, or functionality that you believe is not fully accessible to people with disabilities, please call our Reception at 855-293-9394, or email them at [email protected] with “Disabled Access” in the subject line. Please include a description of the specific feature you feel is not fully accessible or a suggestion for improvement. We take your feedback seriously and will consider it as we evaluate ways to accommodate all of our community and our overall accessibility policies. Additionally, while we do not control such vendors, we strongly encourage vendors of third-party digital content to provide content that is accessible and user friendly.

• Terms & Privacy Policy

© San Fernando Valley Business Journal | Website by Web Publisher PRO

Trending News

Related Practices & Jurisdictions

• Labor & Employment
• Litigation / Trial Practice

As we predicted ( here ), employees can be compelled to individually arbitrate their Labor Code claims under the Private Attorneys General Act of 2004 (“PAGA”), but an arbitration agreement that prohibits employees from bringing a representative action on behalf of other employees in court violates California public policy.  In  Adolph v. Uber Technologies ,  Inc. , S274671 (July 17, 2023) (“ Adolph ”), the California Supreme Court analyzed whether an employee retained standing to bring a PAGA action on behalf of other aggrieved employees despite the existence of a valid arbitration agreement requiring arbitration of the employee’s individual PAGA claims.  The Court answered with an unequivocal and unanimous “yes.”  

Erik Adolph filed a class action and PAGA representative action lawsuit against Uber arising from his work as a delivery food driver for Uber Eats.  Previously, Adolph had signed an arbitration agreement that contained a class action waiver and required Adolph to arbitrate any claims against Uber on an individual basis.  The agreement also stated that Adolph would not “bring a representative action on behalf of others under [PAGA] in any court or in arbitration.”  Based on the agreement, Uber moved to compel arbitration of Adolph’s individual claims and dismiss the class claims, which the trial court granted.  Adolph then sought to pursue only his PAGA claims on behalf of himself and other aggrieved employees.  Uber again moved to compel, claiming Adolph had to arbitrate the question of whether he was an aggrieved employee under PAGA.  Based on existing California case law that did not permit the splitting of PAGA claims into individual and representative claims, the trial court denied the motion, which the court of appeal affirmed.

One month later, the U.S. Supreme Court decided  Viking River Cruises, Inc. v. Moriana , 596 U.S. _, 142 S.Ct. 1906 (2022), which permitted arbitration of individual PAGA claims.  In the decision, the U.S. Supreme Court also reasoned that an employee litigating individual PAGA claims in arbitration would be deprived of standing to bring a representative action in court and would be placed in a position no different than a member of the general public.  Justice Sotomayor, writing in a concurrence, stressed that the issue of standing is a question for the state court to decide.

Not surprisingly, when the question was posed to the California Supreme Court, it rejected the standing analysis by the U.S. Supreme Court.  The  Adolph  Court held that even if an employee is required to arbitrate his or her individual PAGA claims, the employee retains statutory standing under Labor Code section 2699(c) to bring claims on behalf of other aggrieved employees as long as the employee was employed by the “alleged violator,” and had suffered one or more alleged Labor Code violations. 

Notably, the Court also rejected the argument that an individual settlement of the employee’s Labor Code claims deprives the employee of standing to represent other aggrieved employees.  Rather, the Court found standing required only “the  fact  of a violation” (emphasis added), regardless of whether it had been remedied, and “post-violation events,” such as an individual settlement, added an unacceptable “expiration element” to the statutory standing requirements.

Addressing Uber’s concern that employees might be able to relitigate the issue of whether they are an aggrieved employee after arbitration concluded,  Adolph  holds that the decision of the arbitrator is binding once it is confirmed and entered as a final judgment under Civil Code section 1287.4.  Employees cannot relitigate whether they are aggrieved for standing purposes should an arbitrator determine the employee suffered no Labor Code violations, but this may be cold comfort to employers.  If the arbitrator finds the employee suffered one Labor Code violation, the employee has standing to litigate a whole host of alleged Labor Code violations on behalf of other employees.  And while the Court stated that a trial court may exercise its discretion to stay the non-individual PAGA claims while the arbitration proceeds, it did not require the trial court to do so, again leaving the employer possibly defending individual and non-individual claims in different locations.

Adolph  certainly deals a blow to the benefits that employers may have obtained from the  Viking River  decision, and should raise questions with employers as to what they should do with their current arbitration agreements.  Employers would be wise to thoroughly examine the issues and review their current arbitration agreements with experienced employment counsel. 

Employers also should take note that this is the first of several upcoming PAGA cases to be decided by the Court.  Up next are two more:  Can a plaintiff in one PAGA representative action intervene and object to a settlement or judgment in another action that tries to extinguish the plaintiff’s case?  Does a trial court have inherent authority to strike representative PAGA claims if they are unmanageable and require extensive individualized analysis of each employee’s factual circumstances?  Again, stay tuned.

Current Legal Analysis

More from vedder price, upcoming legal education events.

Sign Up for e-NewsBulletins

Cruise Operator Viking’s IPO Looks Like a Winner

V iking Cruises has turned European river travel into a lucrative business by catering to the Masterpiece Theater crowd—affluent older American tourists interested in culture, art, and history.

The cruise line’s parent, Viking Holdings, plans to go public in the coming week. The deal could generate a positive reception from investors due to the company’s profitability, high-end niche, and growth prospects.

Viking plans to sell 44 million shares in a price range of $21 to $25, which would raise $1 billion and value the company at around $10 billion based on 431 million shares outstanding, according to its prospectus. The deal is expected to be priced on April 30 and begin trading on May 1. The stock will trade on the NYSE under the ticker VIK. Underwriters include BofA Securities, J.P. Morgan, UBS, and Wells Fargo.

The company operates 92 vessels including 58 of its signature flat, long ships accommodating 190 passengers each that ply European rivers such as the Seine, Rhine, and Danube. The company’s slogan is “Exploring the World in Comfort.”

The Viking experience is the antithesis of boozy fun marketed by big cruise lines on their massive ships. There are no children under 18 allowed on Viking vessels and there are no casinos on board.

Founded in 1997, Viking has become synonymous with European river travel due in part to shrewd marketing. It sponsored PBS’s Masterpiece Theater, including the hit series Downton Abbey. The company diversified into the luxury ocean market in 2015 and now leads in that sector.

The company had $4.7 billion in revenue in 2023, up nearly 50% from 2022, and it earned a pro forma 56 cents a share excluding special factors. At the midpoint of the pricing range, the company would be valued at a steep 41 times its 2023 pro forma earnings.

But the stock looks reasonable based on free cash flow. It’s valued at about 10 times the $1 billion of free cash flow that it generated last year. Using another metric, the company is valued at about 13 times its 2023 earnings before interest, taxes, depreciation, and amortization, or Ebitda. Viking has less than $4 billion of net debt.

Viking released some first-quarter financials in its prospectus that showed improvement over the same period in 2023. Revenue of $715 million at the midpoint of a range was up 14% versus the year-earlier period, and its operating loss narrowed to $80 million at the midpoint of the range, against a $116 million loss in the first quarter of 2023. The first quarter is seasonally weak, with the company profitable in the second and third quarters of the year.

The luxury market is hot, with investors gravitating toward stocks such as Ferrari and Hermès. The company bills itself as the only “pure play luxury public cruise line.”

The initial public offering will represent a score for CEO, chairman and founder Torstein Hagen and for investors TPG and the Canada Pension Plan Investment Board.

Before the IPO, Hagen owned about 54% of the company, with TPG and CPP at roughly 21% each. In the IPO, the company will sell 11 million shares and TPG and CPP a total of 33 million.

Viking carried about 650,000 passengers in 2023, who paid an average of more than $7,000 per trip against about $2,000 for cruise line industry leader Carnival, which is a mostly mass-market company. Viking caters to travelers, mostly Americans, who are 55 years old or over and who are interested in culture, art, music, history, and science. it caters to what it calls “thinking people.”

Viking says it has 51% of the riverboat market for North American tourists. In 2015, it started an ocean cruising division and now has an industry-leading share of 26%.

In a presentation available on the RetailRoadshow website, Hagen said that Viking has disproved the industry view that it’s “tough making money on smaller ships.” Viking’s riverboats are larger than those of many of its competitors, which allows for more passengers and profitability.

The company sees considerable growth potential in coming years, with 18 new riverboats and six oceangoing ships due for delivery through 2028. Part of its strategy is to operate identical river long-ships and oceangoing ships to simplify marketing and maintenance.

Challenges for Viking include growing competition in the European river market, with some rivals offering what they tout as a more exclusive experience than Viking. Travel specialist Tauck, for instance, notes on its website that its riverboats carry no more than 130 guests.

There are only so many European rivers to experience. Viking’s growth could come from its ocean travel focused on Europe (mostly the Mediterranean and Baltic seas) as well as the Antarctic. River travel is growing on waterways such as the Mississippi in the U.S. and the Mekong in Southeast Asia.

“We maintain a clear focus on our most relevant customer group: English-speaking travelers aged 55 years old and over, who have the time, money, and desire to explore the world,” Hagen wrote in the prospectus. That strategy has worked, and Viking could be rewarded for it when it goes public soon.

Write to Andrew Bary at [email protected]