August 5, 2021

Winns v. Postmates Inc., A155717 (July 20, 2021)

Many California companies include arbitration provisions in their agreements with workers. Some of these provisions bar workers from pursuing class-action and representative claims. In Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, the California Supreme Court held these provisions are enforceable as to class claims seeking private remedies, but not as to representative claims under California’s Private Attorneys General Act (PAGA). PAGA enables employees to sue on behalf of the State to recover civil penalties the Labor Commissioner would otherwise seek. Iskanian also concluded the Federal Arbitration Act (FAA) did not preempt this rule.

The U.S. Supreme Court has not expressly addressed whether the FAA preempts Iskanian’s PAGA rule. But many companies have challenged Iskanian in light of intervening, pro-arbitration high court precedent, such as Epic Systems Corp. v. Lewis (2018) 138 S.Ct. 1612. California Courts of Appeal have rejected every such challenge to date, including the recent decision in Winns v. Postmates Inc., holding that Epic addressed different issues and that Iskanian remains binding law in California courts. These decisions stand in contrast to the views of some Ninth Circuit judges, who believe the FAA preempts Iskanian. As Winns acknowledged, multiple companies have filed petitions for writs of certiorari seeking U.S. Supreme Court review. The high court could decide as soon as this fall whether to accept review and resolve this festering preemption dispute.

Horvitz & Levy represents other entities currently litigating these issues (but not Postmates).