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Did the Supreme Court Oral Argument on Viking River Cruises Signal a Coming Sea Change for California Employment Law?

Silence can be telling.

That is especially so in the legal industry.

In the context of a hearing or oral argument, if judges or justices don’t ask an attorney a question, it can be incredibly encouraging – or incredibly discouraging.  It often means that the judges or justices have already made up their minds after having read the parties’ briefs and simply don’t have any questions or don’t need to hear anything more.

The meaning of silence (or relative silence) is something to be considered in light of the March 30, 2022 United States Supreme Court oral argument in Viking River Cruises v. Moriana.

Viking River Cruises addresses an issue that will have far-reaching impact upon employers with operations in California – whether claims under the California Private Attorneys General Act (“PAGA”) are subject to the Federal Arbitration Act (“FAA”) such that an arbitration agreement with a class and representative action waiver would be effective to halt the massive PAGA representative actions filed with regularity against California employers, just as those agreements can halt class actions post-Epic Systems v. Lewis.

Given the current composition of the United States Supreme Court, many pundits predicted a 6-3 decision holding that the FAA in fact extends to PAGA claims.

Following the oral argument, during which Viking River Cruise’s counsel was occasionally peppered by questions about PAGA, some commentators now seem to believe that the Court may instead conclude that PAGA claims are not subject to the FAA.

Respectfully, nothing unexpected happened during the oral argument on Viking River Cruises.  And while a surprise is not out of the question, nothing happened during the oral argument that would suggest that the originally expected, pro-employer decision will not be forthcoming.

Commentators have noted that Viking River Cruises’ counsel was asked pointed questions by the bench.  But, critically, not by the entire bench.  Those pointed questions were asked by the very three justices who would be expected to ask those questions – Justices Kagan, Sotomayor and Breyer. The six other Justices, expectedly, did not join in that pointed questioning of Viking River Cruises’ counsel.

That said, here are a few additional observations:

  1. While the three liberal justices asked Viking River Cruise’s counsel pointed questions, the six conservatives generally did not do the same with Moriana’s counsel. They may not have been entirely silent, but they were relatively so.  You could read this many ways, but one way to read it is that all nine justices had already made up their minds after having read the extensive briefing in the case, including numerous amicus briefs.
  2. Other than a hypothetical by Justice Breyer about spiders sitting next to contracts, there was not a single question that counsel for either side should not have anticipated.  And both sides in fact seem to have anticipated them.
  3. It’s difficult to think of anything said by either side that was different from what was already argued in their respective briefs (other than Viking River Cruise’s counsel using part of the rebuttal to address the overwhelming number of PAGA actions that have been filed).  They might have used some different language than they had used in their briefs, but they seemed to be hammering home the same points.
  4. There was nothing said by either side that should change any of the justices’ minds.

Assuming that the Court issues the 6-3 employer-friendly decision that many have predicted, not only will employers need to address the impact of that decision in pending PAGA lawsuits involving arbitration agreements – the courts are likely to be inundated with thousands of motions to compel arbitration and to strike PAGA claims – but many employers in California that do not already have arbitration programs will certainly want to consider implementing them.  They will want to consider the pros and cons of those arbitration agreements.

And they will also want to consider California’s AB51, as well as the possibility of reactive legislation carving out all or some employment claims from the FAA, not unlike the recent amendment carving out sexual harassment and sexual assault claims.

A pro-employer decision in Viking River Cruises will not be the end of this issue.