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Lyft, Inc. v. Seifu

California’s Private Attorneys General Act (PAGA) authorizes an “aggrieved” employee whose employer has violated the state’s Labor Code to sue the employer to enforce the Labor Code on behalf of the state. A PAGA plaintiff may bring both individual claims based on violations the employer has committed against the plaintiff and non-individual claims based on violations the employer has committed against other employees. Under a state-law contract rule that the U.S. Supreme Court upheld as consistent with the Federal Arbitration Act (FAA) in Viking River Cruises, Inc. v. Moriana (2022), an employee’s right to bring individual and non-individual PAGA claims cannot be prospectively waived. The FAA requires, however, that a court must enforce an employee’s agreement to submit individual PAGA claims to arbitration while retaining the ability to bring non-individual claims in court.

In 2018, Million Seifu filed a PAGA lawsuit against his employer, Lyft, in California state court, alleging that Lyft had violated the Labor Code as a result of misclassifying him and his fellow Lyft drivers as independent contractors rather than employees. Pointing to an arbitration provision in Seifu’s employment contract, Lyft moved to compel arbitration of Seifu’s individual PAGA claim. At the same time, Lyft argued that once Seifu’s individual claim had been submitted to arbitration, his non-individual claims should be dismissed because he would no longer have standing under California law to pursue them. When Lyft appealed the denial of its motion, a California court of appeal held that, under Viking River, Seifu’s individual PAGA claim must be arbitrated but that Seifu nonetheless had standing to pursue his non-individual claims in court.

Lyft petitioned the Supreme Court to review the state court’s ruling on standing. Co-counseling with attorneys at Lichten & Liss-Riordan, P.C., Public Citizen represented Seifu in opposing Lyft’s petition. The brief explained that the state-court opinion interpreted state law and that the California Supreme Court (which has adopted the same view of PAGA standing as the court of appeal in this case) is the final authority on California law, as well as that the state court’s state-law holding is consistent with Viking River’s holdings on federal law. The Supreme Court denied the petition.