Barrera v. Apple Am. Grp.
| Docket Number | A165445 |
| Decision Date | 31 August 2023 |
| Parties | MARIO BARRERA, et al., Plaintiffs and Respondents, v. APPLE AMERICAN GROUP LLC, et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
Marin County Super. Ct. No. CIV2003539, Honorable Stephen Freccero Trial Judge:
Attorney for Plaintiffs and Respondents, Mario Barrera Francisco Varguez: Capstone Law APC, Ryan H. Wu, Tyler Curtis Anderson.
Attorney for Defendants and Appellants, Apple American Group LLC, et al.:, Reed Smith LLP, Kasey J. Curtis, Mara D. Curtis, Brittany M. Hernandez, Tanner Hendershot.
Plaintiffs Mario Barrera and Francisco Varguez sued defendants-a nationwide restaurant chain-to recover civil penalties under the Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.)[1] for various Labor Code violations suffered by them and by other employees. Defendants moved to compel arbitration. The trial court denied the motion and defendants appealed.
Based on Viking River Cruises, Inc. v. Moriana (2022) 596 U.S., (Viking River) and the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.), we conclude the parties' agreements require arbitration of plaintiffs' PAGA claims that seek to recover civil penalties for Labor Code violations committed against plaintiffs. On an issue of California law that the California Supreme Court has recently resolved, we conclude plaintiffs' PAGA claims that seek to recover civil penalties for Labor Code violations committed against employees other than plaintiffs may be pursued by plaintiffs in the trial court. (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104 (Adolph).)
Therefore, the order denying defendants' motion to compel arbitration is reversed in part and affirmed in part.
Defendants and appellants are Apple American Group LLC; Apple American Group II LLC; Apple Mid Cal LLC; Apple Mid Cal II, LLC; Apple NorCal LLC; Apple SoCal LLC; Apple SoCal II LLC; Flynn Restaurant Group LP; Flynn Restaurant Group LLC; and Winecountry Apple, LLC (collectively, defendants). According to the operative complaint, defendants are related companies that together own and operate 460 Applebee's restaurants in California and other states.
Plaintiffs and respondents are Mario Barrera and Francisco Varguez (collectively, plaintiffs). Barrera started working as a kitchen manager at an Applebee's restaurant in San Rafael in approximately October 2001. Varguez started working as a cook at the same restaurant in approximately September 2008.
During their employment, plaintiffs were presented with and signed documents that included an arbitration provision, the details of which will be described below. Plaintiffs were no longer employed by defendants as of March 2020.
On December 31, 2020, plaintiffs filed a complaint against defendants, and on April 15, 2021, a first amended complaint in which plaintiffs alleged a single cause of action under PAGA for civil penalties on behalf of themselves and other current and former employees of defendants. The cause of action is predicated on alleged violations of the Labor Code.[2] The first amended complaint asserts that plaintiffs are "aggrieved employees" for purposes of an action under PAGA, and that they complied with the requirements for commencing a PAGA action.
Initially, the case proceeded in relatively ordinary fashion, with defendants filing a demurrer, plaintiffs serving discovery requests, and defendants responding to those requests.
However, in March 2022, defendants filed a motion to compel arbitration and to stay proceedings. It was accompanied by a memorandum of points and authorities and several declarations, including of Tina Meyer, one of defendants' California human resources business partners.
In her declaration, Meyer stated that in August 2017, defendants migrated their onboarding process onto an online portal that employees could log onto using their own usernames and passwords, and access various employment documents. Barrera, on August 9, 2017, and Varguez, on August 10, 2017, logged onto the online portal; accessed the employee handbook containing the "Dispute Resolution Program" booklet and the "Receipt of Dispute Resolution Program Booklet and Agreement to Abide by Dispute Resolution"; and signed the agreement electronically.
Meyer attached these agreements to her declaration. Under the paragraph entitled "MUTUAL PROMISE TO RESOLVE CLAIMS BY BINDING ARBITRATION," the agreements state: (Italics added.)
The agreements then provide: They also state that by entering into the agreement, "I am giving up my right to have my legal claims against the Company decided in court by a judge or jury" and also "giving up my rights to pursue a class, representative or collective action."
The agreements further state that "the Federal Arbitration Act shall govern the interpretation, enforcement, and proceedings under this Agreement."
Meyer's declaration then explained that "employees such as Mr. Barrera and Mr. Varguez may be asked to read and sign the 'Receipt of Dispute Resolution Program Booklet and Agreement to Abide by Dispute Resolution' during their employment when a new version of the document was issued or for other record-keeping reasons." On January 5, 2018, Barrera and Varguez each signed a paper copy of the updated version of the agreement. A representative of defendants also signed the agreements.
This later version of the agreement contains similar language as the earlier version signed in 2017, except as follows. The paragraph "MUTUAL PROMISE TO RESOLVE CLAIMS BY BINDING ARBITRATION" states: "We also agree that any arbitration between the Company and me will be on an individual basis and not as a class or collective action." (Italics added.) Thus, this version, unlike the earlier version, does not include a reference to "representative" actions.
Meyer then concludes her declaration by stating:
In their motion, defendants sought to compel arbitration of plaintiffs' PAGA claims based on Labor Code violations that plaintiffs suffered personally (rather than their PAGA claims based on violations suffered by other employees). According to defendants, "the only obstacle to arbitration of the claim[s] here" was the California Supreme Court's decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian), which holds that an employee's pre-dispute agreement to waive his or her right to bring a PAGA action in any judicial or arbitral forum is unenforceable. Defendants referred to a pending United States Supreme Court case, Viking River, in which defendants indicated they expected the United States Supreme Court to overturn Iskanian. Based on this, defendants requested the court order arbitration of the PAGA claims predicated on Labor Code violations personally suffered by plaintiffs. Alternatively, defendants requested that the court stay proceedings pending the outcome of Viking River.
Plaintiffs opposed the motion, arguing that under then controlling law, "representative PAGA claims cannot be compelled to individual arbitration"; that defendants failed to establish the prerequisites for the issuance of a stay; and that defendants failed to prove the existence of a valid, binding arbitration clause. On the last point, plaintiffs maintained that the arbitration agreements they signed in 2018, not in 2017, were the operative agreements. Plaintiffs asserted that the operative agreements were unconscionable, and that defendants waived their right to arbitrate by delaying bringing the motion and litigating the case in court.
Defendants filed a reply, responding to, among other arguments, plaintiffs' defenses of unconscionability and waiver.
On May 17, 2022, the motion came on for hearing, prior to which the trial court had issued a tentative ruling denying the motion and stay request. Following argument, the court adopted the tentative as the final order. In denying the motion, the court relied on a rule that pre-dispute agreements to arbitrate PAGA claims are unenforceable, a rule followed by many California Courts of Appeal based on language in Iskanian. (Citing Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 622.) In denying the stay request, the court stated it would not speculate on the outcome of the United States Supreme Court's pending decision in Viking River and that the interests of justice would not be served by further delaying the proceedings.
On June 6, defendants appealed. On June 15, the United States Supreme Court issued its decision in Viking River. (Viking River, supra, 596 U.S. .) Over one month...
To continue reading
Request your trial