Rodriguez v. Twitter, Inc.

Background

Francisco Rodriguez sued Twitter, Inc. and Magnit, LLC f/k/a PRO Unlimited, Inc. on behalf of himself and a proposed class of other employees who worked for Twitter through Magnit. He alleged that recent layoffs violated federal and state laws. He also sought civil penalties on behalf of California and other employees under California’s Private Attorneys General Act (PAGA), California Labor Code section 2698 and following.

In November 2021, as a condition of his employment with Magnit, Rodriguez signed an arbitration agreement governed by the Federal Arbitration Act. The agreement covered claims against Magnit and its clients, including claims arising under the California Labor Code. It contained a class-action waiver and generally barred class, collective, or representative proceedings. The agreement excluded claims that governing law made ineligible for mandatory pre-dispute arbitration, including PAGA claims to the extent required by governing law. It also provided that a court, rather than an arbitrator, would decide disputes about the agreement’s validity, enforceability, and scope.

Twitter and Magnit moved to compel arbitration of Rodriguez’s individual claims. Rodriguez did not challenge the agreement’s formation or argue that it was unconscionable. His main arguments concerned the scope of the agreement and the treatment of his PAGA claims. He also argued that Twitter had waived arbitration based on its conduct in a related case involving layoffs.

Court’s analysis

The court rejected the waiver argument. Even assuming Twitter had delayed or otherwise mishandled arbitration in the related case, the court said that conduct would not establish a waiver of Twitter’s right to compel arbitration against Rodriguez, who was differently situated. Rodriguez identified no binding authority supporting waiver under those circumstances.

The court concluded that the agreement covered Rodriguez’s individual claims. Although PAGA was not specifically named in the agreement’s general list of covered claims, that list expressly included California Labor Code violations. The court reasoned that PAGA permits private individuals to seek civil penalties for California Labor Code violations. The agreement’s exclusion for claims not subject to mandatory pre-dispute arbitration did not remove Rodriguez’s PAGA claims because, in the court’s view, the Federal Arbitration Act did not require those claims to be exempted from arbitration.

The parties agreed that Rodriguez’s individual PAGA claims could be compelled to arbitration but that his representative PAGA claims could not. The court explained that compelling the representative portion to arbitration would waive Rodriguez’s ability to pursue those claims in any forum because of the agreement’s limits on representative proceedings and its default prohibition on an arbitrator presiding over such proceedings.

The defendants argued that the representative PAGA claims should instead be dismissed for lack of statutory standing after Rodriguez’s individual PAGA claims went to arbitration. They relied mainly on the United States Supreme Court’s discussion of California law in Viking River Cruises, Inc. v. Moriana. Rodriguez pointed to three California Courts of Appeal decisions reaching a different conclusion and noted that the California Supreme Court was considering the issue in Adolph v. Uber Technologies. Because the California appellate decisions conflicted with the Supreme Court’s interpretation and the state supreme court had not yet resolved the issue, the court chose to wait rather than decide the standing question first.

Disposition

The court ordered Rodriguez’s claims to arbitration on an individual basis. Rodriguez’s remaining representative PAGA claims were stayed pending further order and the disposition of Adolph. The parties were directed to provide a joint status report every 90 days concerning Adolph.