Employee Losing Labor Code Claims in Arbitration Has No Standing to Pursue PAGA Representative Action

A recent California Court of Appeal decision, Sorokunov v. NetApp, Inc., ruled that an employee who lost individual Labor Code claims in arbitration cannot subsequently pursue a PAGA representative action based on the same alleged violations. The court found that issue preclusion applied, stripping the employee of PAGA standing when the underlying Labor Code violations were determined not to exist in arbitration. This ruling suggests that successful defense against Labor Code claims in arbitration can prevent their re-litigation under PAGA, and also offers guidance on the enforceability of arbitration agreements with modification clauses.