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Diaz v. Macys West Stores, Inc. (9th Cir. 22-56209 5/10/24) PAGA | Arbitration

By May 10, 2024June 30th, 2024Uncategorized

The panel affirmed the district court’s order compelling arbitration of Yuriria Diaz’s individual California Private Attorneys General Act (“PAGA”) claims, vacated the order to the extent it compels arbitration of her non-individual claims, and remanded to the district court to dispose of the nonarbitrable claims consistent with the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc., 532 P.3d 682 (Cal. 2023), and the agreement of the parties.

Diaz sued her former employer, Macy’s West Stores, Inc., under PAGA for violations of California’s labor code. Macy’s appealed the district court’s order compelling arbitration of all Diaz’s claims.

The panel concluded that it had jurisdiction to review the district court’s order as a final decision with respect to arbitration. The district court compelled arbitration without explicitly dismissing the underlying claims. The district court’s denial of Diaz’s requested stay, combined with the language of closure, overcame any presumption that the action was stayed pending the arbitration. The panel concluded that the district court intended its administrative closure of the case to be a final decision.

The panel looked to the parties’ agreement to determine whether the parties consented to arbitration of Diaz’s PAGA claims. The panel held that at the time of contracting, the parties consented only to arbitration of individual claims relating to Diaz’s own employment. The agreement’s language was strongly indicative of an intent to exclude any amalgamation of employees’ claims—including non- individual PAGA claims—from arbitration.

The panel rejected Macy’s request that the district court on remand be instructed to dismiss the non-individual claims because under Adolph, those claims cannot be dismissed. The panel remanded with instruction to treat the nonarbitrable non-individual claims consistent with Adolph, anticipating that the parties will, per their agreement, request a stay with respect to those claims.