A California law allowing individuals to sue on behalf of the state is thwarting companies’ efforts to force misclassification claims into arbitration.
Courts in the state so far have rejected arguments that gig workers must first let an arbitrator decide if they are contractors or employees before they are allowed to proceed with Private Attorneys General Act lawsuits alleging labor violations, Bloomberg Tax reported.
Last month, Uber Technologies Inc. lost its bid to pause a PAGA lawsuit brought against it by drivers on arbitration grounds.
PAGA allows “aggrieved employees” to represent other workers in litigation, and courts have held that mandatory arbitration agreements the workers signed can be bypassed to keep disputes in court.
Read more from Bloomberg Tax.