Viking River Cruises, Inc. v. Moriana

Viking River Cruises, Inc. v. Moriana

Opinion

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 [*9]  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 impossible 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 [*10]  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, 173 Cal. Rptr. 3d 289, 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, 95 Cal. Rptr. 3d 588, 209 P. 3d 923, 933 (2009)).

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