
On June 15, the U.S. Supreme Court finally brought closure to the long-running, unsettled issue of whether California’s prohibition against arbitration agreement waivers of the right to bring representative actions under the California Labor Code Private Attorneys General Act (PAGA) is preempted by the Federal Arbitration Act (FAA). California’s appellate courts and the Ninth Circuit Court of Appeals have long held that such waivers are unenforceable under California state law (the Iskanian Rule). In Viking River Cruises, Inc. v. Moriana (U.S.S.C. Case No. 20-1573) (Viking River Cruises), the Supreme Court held that while the FAA does not preempt the Iskanian Rule’s prohibition on wholesale waivers of PAGA claims, the FAA does preempt the Iskanian Rule insofar as that rule precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.