K&L Gates Represents Medely in Private Attorney General Act Arbitration Suit

Los Angeles – K&L Gates represented Medely, Inc., an online platform to help health care workers seeking jobs connect with medical facilities needing workers, in a suit determining whether a Private Attorney General Act (PAGA) claim by an independent contractor can be compelled to arbitration.

On September 30, the Second District Court of Appeal ordered the plaintiff’s individual PAGA claim to arbitration, making Jean Hensley v. Medely, Inc., the first California Court of Appeal decision to enforce an arbitration agreement in a PAGA case pursuant to the U.S. Supreme Court’s decision in Moriana v. Viking River Cruises.

Despite agreeing to arbitrate disputes under the Federal Arbitration Act (FAA), the plaintiff in Hensley sued Medely on behalf of herself and others under PAGA for alleged Labor Code violations. The California Supreme Court’s 2014 case of Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 previously established that PAGA claims could not be compelled to arbitration, and an employee’s individual PAGA claim could not be split from that of other employees and arbitrated.

But, in June, the U.S. Supreme Court’s ruling in the Viking River Cruises case partially abrogated Iskanian and held that an employer is entitled under the FAA to compel arbitration of an employee’s individual claims, separate and apart from PAGA claims alleged on behalf of others.

Los Angeles partner Eugene Ryu and associate Penny Chen Fox represented Medley in this matter.

"In the last few years, there were a number of decisions holding that a PAGA plaintiff cannot be compelled to arbitrate threshold disputes over their standing, including independent contractor status," Ryu told The Recorder. "We argued that those cases should not be followed because Ms. Hensley had not proven she was an employee. The decision seems to validate that theory under Viking and opens the door for other litigants faced with this question to revisit arguments that a PAGA plaintiff should first be required to prove standing in arbitration before pursuing PAGA."

The largest labor marketplace for short- and long- term health care jobs, Medely helps professionals access health care jobs with the freedom and flexibility to work when and where they want. Medely also provides health care facilities with the tools needed to manage their contingent workforce, time tracking, billing, and credentials management.