The US Supreme Court Wednesday heard oral arguments in Viking River Cruises v. Moriana, a case that could make pursuing legal action against an employer harder for workers who have signed arbitration agreements as a condition of their employment.

An employee of Viking River Cruises sued the company in state court under the California Private Attorneys General Act (PAGA) claiming widespread violations of California wage and hour laws. PAGA creates a right of action in which individual employees bring suit on behalf of the State to recover penalties from employers for violations of California’s Labor Code. Vikings River Cruise sought to compel arbitration considering the employee had signed an arbitration agreement that purports to forbid an employee from bringing any private attorney general action.

The trial court and the California Court of Appeal held that the waiver of PAGA claims was unenforceable, thus allowing PAGA claims to proceed in court. The California Supreme Court denied review.

Viking River Cruises filed a petition for certiorari in the US Supreme Court, which was granted. The question before the Court on Wednesday was:

Does the Federal Arbitration Act require enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims?

Viking River Cruise argues that the decisions of the California courts were flagrant departures from the Supreme Court’s rulings in the area and that a decision in its favor follows directly from AT&T Mobility v. Concepcion. Whereas Plaintiff argues that the case is not at all like Concepcion. Concepcion barred California’s insistence on a particular process for adjudicating and aggregating claims. However, in the current case, the contract seeks “forfeiture” of the PAGA claims authorized by the state legislature.

Justice Kagan, Justice Sotomayor, and Justice Breyer expressed skepticism that the Federal Arbitration Act (FAA) would preempt a state’s decision to outsource enforcement of its labor laws to individuals. Justice Kagan, in particular, expressed concern that ruling in the favor of the employer would result in entire procedural remedies being lost in other types of cases.

Whereas, Chief Justice Roberts, Justice Alito, and Justice Barrett asked questions suggesting that they were open and ready to extend Concepcion to PAGA cases.

The decision is expected by the end of June 2022.