When an arbitration agreement contained an unenforceable waiver of claims under California’s Private Attorneys General Act (“PAGA”) and the agreement further provided that the PAGA waiver was non-severable from the remainder of the arbitration agreement, a California court of appeal held that the arbitration agreement could not be enforced.

In Montano v. The Wet Seal Retail, Inc., the arbitration agreement signed by Montano contained a waiver of the right to “make claims with others as a representative or a member of a class or as a private attorney general.” However, the agreement also provided that if the waiver is found to be unenforceable by a court or arbitrator, then the entire agreement is void and unenforceable. In light of the California Supreme Court’s recent decision in Iskanian (July 2014 FEB), the trial court in Montano held that the waiver of the right to assert a PAGA claims was unenforceable and therefore the entire arbitration agreement could not be enforced pursuant to the parties’ non-severability agreement.