CA employers: The recent, unpublished California Court of Appeal decision, Hegemier v. A Better Life Recovery LLC (G061892) is a stark reminder to review employee documentation to ensure compliance with the state’s ever-changing legal landscape.
In Hegemier, the Court of Appeals held that a provision in an arbitration agreement that excluded from arbitration “claims that are not subject to arbitration under current law” refers to what was excluded as of the date the arbitration agreement was signed. Therefore, even though the US Supreme Court ruled in Viking River Cruises, Inc. v. Moriana (20-1573 Viking River Cruises, Inc. v. Moriana (06/15/2022)) that individual claims under California’s Private Attorneys General Act (PAGA) could be forced into arbitration, because the plaintiff in this case signed the agreement prior to the Supreme Court’s ruling, the Court of Appeals held that the rule in place at the time the employee signed the agreement (prior to that Supreme Court decision) governed. Accordingly, the court held that the employer could not require the employee to bring her PAGA claim in arbitration.
Employers in California should review their arbitration agreements (including when they were signed) to ensure that they do not run into similar issues.