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What to Consider When Settling PAGA Cases

The increasing use of arbitration clauses, coupled with class action waivers in standard employment agreements, has led to a dramatic rise in California Labor Code Private Attorneys General Act (PAGA) litigation, which as a matter of California law has been held to be outside the scope of pre-dispute arbitration clauses (Iskanian v. CKS Transportation (2014) 59 Cal. 4th 348). As a result, PAGA claims, which previously may have been an afterthought in employee class action complaints, are now often the primary claims, and plaintiffs sometimes do not include class claims that an employee might have asserted. Apart from the litigation challenges both plaintiffs’ and defense attorneys may face in PAGA-only cases, these actions pose a host of questions that must be addressed when settling them. However, the techniques and formulas used to resolve class actions may not be directly applicable to PAGA-only claims.

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