Esparza v. KS Industries, L.P.

Claims for statutory damages or penalties payable to individual employees are arbitrable; only Private Attorney General Act claims for civil penalties payable to the state are not arbitrable.  Under Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, only claims that are brought on behalf of the state under PAGA and seek civil penalties payable only to the state escape the effect of an arbitration clause.  Claims for statutory damages payable to the employee (even if called a penalty in the statute) are not exempt from arbitration under Iskanian.  So, for example, Lab. Code 558 which allows an employee to recover a $50 or $100 penalty for himself in addition to underpaid wages establishes a claim for statutory damages that is subject to arbitration despite Iskanian because the penalty is recoverable by the employee individually.

California Court of Appeal, Fifth District (Franson, J.); August 2, 2017; 2017 WL 3276363

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