Collie v. Icee Co.
Decision Date | 20 July 2020 |
Docket Number | E071654 |
Citation | 266 Cal.Rptr.3d 145,52 Cal.App.5th 477 |
Court | California Court of Appeals Court of Appeals |
Parties | Taraun COLLIE, Plaintiff and Respondent, v. The ICEE COMPANY et al., Defendants and Appellants. |
Lewis Brisbois Bisgaard & Smith, Lann G. McIntyre, San Diego, Jeffrey S. Ranen, Los Angeles, Erica Rocush and Aashish Bhargava, Los Angeles, for Defendants and Appellants.
Protection Law Group, Heather Davis, Amir Nayebdadash, El Segundo, and Priscilla Gamino for Plaintiff and Respondent.
The Icee Company and J & J Snack Foods Corp. (collectively, Icee) appeal the trial court's order denying their motion to compel arbitration of a dispute with a former employee. The employee, Taraun Collie, alleged a single cause of action against Icee under the Private Attorneys General Act of 2004 (PAGA). ( Lab. Code, § 2698 et seq. )1 We hold that under Iskanian v. CLS Transportation Los Angeles LLC (2014) 59 Cal.4th 348, 173 Cal.Rptr.3d 289, 327 P.3d 129 ( Iskanian ) and Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th 439, 215 Cal.Rptr.3d 344 ( Betancourt ), an employee cannot be compelled to arbitrate a PAGA cause of action on the basis of a predispute arbitration agreement. ( Iskanian, supra , at pp. 386-387, 173 Cal.Rptr.3d 289, 327 P.3d 129 ; Betancourt, supra , at pp. 445-446, 215 Cal.Rptr.3d 344.) We also join Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 244 Cal.Rptr.3d 177 ( Correia ) in holding that Epic Systems Corp. v. Lewis (2018) ––– U.S. ––––, 138 S.Ct. 1612, 200 L.Ed.2d 889 ( Epic ) does not undermine the reasoning of Iskanian and Betancourt. ( Correia , at pp. 619-622, 244 Cal.Rptr.3d 177.) We therefore affirm.
Collie alleged that he worked for Icee from November 2014 to August 2015. When he began his employment, he signed an arbitration agreement, which stated in pertinent part: The agreement provided that the Federal Arbitration Act (FAA; 9 U.S.C. § 1, et seq. ) would govern interpretation and enforcement of the agreement and all proceedings under it.
In July 2016, Collie filed his PAGA complaint on behalf of himself and other aggrieved employees. Icee moved to compel arbitration of Collie's "individual claim" in August 2018. It argued that the parties had agreed to bilateral arbitration only, so Collie had to arbitrate his PAGA cause of action on an individual basis—that is, he could not seek PAGA penalties on behalf of other Icee employees. And because Collie had agreed to arbitrate all claims or controversies with Icee, neither could he maintain a PAGA action on behalf of other employees in court. In other words, he had effectively waived his right to bring a PAGA action on behalf of other employees in any forum.
The trial court denied Icee's motion, concluding that our Supreme Court's decision in Iskanian, supra , 59 Cal.4th 348, 173 Cal.Rptr.3d 289, 327 P.3d 129 required that result.
Because the trial court relied on a determination of law to deny Icee's motion, we apply the de novo standard of review. ( Betancourt, supra , 9 Cal.App.5th at p. 444, 215 Cal.Rptr.3d 344.) We are not bound by the trial court's reasoning and "may affirm the denial on any correct legal theory supported by the record." ( Julian v. Glenair, Inc. (2017) 17 Cal.App.5th 853, 864, 225 Cal.Rptr.3d 798.)
The court did not err by denying Icee's motion to compel arbitration. Under PAGA, " ‘an "aggrieved employee" may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations.’ " ( Iskanian, supra , 59 Cal.4th at p. 380, 173 Cal.Rptr.3d 289, 327 P.3d 129.) Before bringing the PAGA action, the employee must give notice of the alleged Labor Code violations to the employer and the Labor and Workforce Development Agency (LWDA). (§ 2699.3, subd. (a)(1)(A); Iskanian , at p. 380, 173 Cal.Rptr.3d 289, 327 P.3d 129.) The employee may bring the PAGA action only after the LWDA refuses to investigate or the agency's investigation results in no citation. (§ 2699.3, subd. (a)(2)(A)-(B); Iskanian , at p. 380, 173 Cal.Rptr.3d 289, 327 P.3d 129.) Most of the recovered civil penalties (75 percent) go to the LWDA, with the remainder going to the aggrieved employees. (§ 2699, subd. (i); Iskanian , at p. 380, 173 Cal.Rptr.3d 289, 327 P.3d 129.) "All PAGA claims are ‘representative’ actions in the sense that they are brought on the state's behalf. The employee acts as " ‘the proxy or agent of the state's labor law enforcement agencies’ " and " ‘represents the same legal right and interest as’ " those agencies." ( ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 185, 252 Cal.Rptr.3d 228, 448 P.3d 239 ( ZB ).) Thus, a PAGA action to " ‘recover civil penalties "is fundamentally a law enforcement action designed to protect the public and not to benefit private parties." ’ " ( Iskanian , at p. 381, 173 Cal.Rptr.3d 289, 327 P.3d 129.)
We held in Betancourt that an employer cannot rely on an employee's predispute arbitration agreement to compel arbitration of a PAGA claim. ( Betancourt, supra , 9 Cal.App.5th at pp. 445-449, 215 Cal.Rptr.3d 344.) We explained that, generally, a nonparty to an arbitration agreement cannot be compelled to arbitrate. ( Id. at p. 445, 215 Cal.Rptr.3d 344.) And given that a PAGA claim " ‘is a dispute between an employer and the state ,’ " the employee's "predispute agreement to arbitrate does not bind the state to arbitration." ( Id. at p. 447, 215 Cal.Rptr.3d 344 ; accord id. at p. 449, 215 Cal.Rptr.3d 344 [reasoning that the " " and is not bound by the employee's predispute arbitration agreement].) Several other courts considering the issue have reached the same conclusion. ( Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 622, 244 Cal.Rptr.3d 177 ( Correia ) []; Julian v. Glenair, Inc., supra , 17 Cal.App.5th at p. 872, 225 Cal.Rptr.3d 798 [ ]; Tanguilig v. Bloomingdale's, Inc. (2016) 5 Cal.App.5th 665, 678, 210 Cal.Rptr.3d 352 [].)
We see no reason to depart from Betancourt here. Collie signed the arbitration agreement when he began his employment with Icee and before his PAGA claim arose. He executed the agreement in his individual capacity. The state had not deputized him to act at the time, and he therefore could not agree to arbitrate on behalf of the state. It does not matter that Icee wants to compel arbitration of Collie's cause of action on "an individual basis," as opposed to as a representative of other aggrieved employees. Either way, Collie is suing "as a proxy for the state [and] only with the state's acquiescence." ( Tanguilig v. Bloomingdale's, Inc., supra , 5 Cal.App.5th at p. 678, 210 Cal.Rptr.3d 352.) His predispute arbitration agreement does not encompass this PAGA action.
Icee argues that Betancourt and Iskanian are no longer good law after the United States Supreme Court's decision in Epic. The argument is unpersuasive. Epic considered the relationship between the FAA and the National Labor Relations Act (NLRA; 29 U.S.C. § 151 et seq. ). ( Epic , at p. 1619.) The employees argued that the NLRA's provision guaranteeing workers the right to engage in concerted activity conflicted with the class action waiver in their arbitration agreements, thereby rendering the class action waiver illegal. ( Id. at p. 1624.) The Epic court rejected the employees' argument, "reconfirmed ... that the FAA requires enforcement of class action waivers," and "determined the NLRA does not take precedence over the FAA on this issue." ( Correia, supra , 32 Cal.App.5th at p. 618, 244 Cal.Rptr.3d 177, citing Epic , at pp. 1623-1630.)
Betancourt relied on Iskanian 's discussion of the unique nature of a PAGA claim. But Epic does not address "the unique nature of a PAGA claim"—that is, the " ‘PAGA litigant's status as "the proxy or agent" of the state’ and his or her ‘substantive role in enforcing our labor laws on behalf of state law enforcement agencies.’ " ( Correia, supra , 32 Cal.App.5th at p. 620, 244 Cal.Rptr.3d 177.) Epic , therefore, does not undermine Iskanian 's or Betancourt 's characterization of...
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