Cortez v. Doty Bros. Equip. Co.

• Decision Date: 15 August 2017
• Docket Number: B275255
• Citation: 222 Cal.Rptr.3d 649,15 Cal.App.5th 1
• Parties: Gabriel CORTEZ, Plaintiff and Appellant, v. DOTY BROS. EQUIPMENT COMPANY, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

15 Cal.App.5th 1

222 Cal.Rptr.3d 649

Gabriel CORTEZ, Plaintiff and Appellant,

v.DOTY BROS. EQUIPMENT COMPANY, Defendant and Respondent.

B275255

Court of Appeal, Second District, Division 7, California.

Filed August 15, 2017

As Modified September 6, 2017

Kingsley & Kingsley, Eric B. Kingsley, Liane Katzenstein Ly, Kelsey M. Szamet, Encino, and Ari J. Stiller; DesJardins & Panitz, Michael A. DesJardins and Eric A. Panitz, Long Beach, for Plaintiff and Appellant.

Call & Jensen, John T. Egley, Joshua G. Simon, Newport Beach, and Delavan J. Dickson, San Diego, for Defendant and Respondent.

PERLUSS, P.J.

Gabriel Cortez sued his former employer Doty Bros. Equipment Company for Labor Code and wage and hour violations on behalf of himself and a putative class of employees and former employees. Cortez's complaint included a related representative claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) ( Lab. Code, § 2698 et seq. ). On September 19, 2014 the superior court granted Doty Bros.' petition to compel arbitration of Cortez's individual claims pursuant to an arbitration provision in the collective bargaining agreement (CBA) governing his employment and severed and stayed his PAGA claim, which was not subject to arbitration. The court reserved questions concerning the arbitrability of the class claims for the arbitrator. On November 19, 2014 we summarily denied Cortez's petition for a writ of mandate challenging the court's order compelling arbitration.

Cortez and Doty Bros. then stipulated to allow the superior court, rather than the arbitrator, to determine the arbitrability of the class claims. On March 23, 2015, after substantial briefing and a hearing on this question, the court dismissed the class claims as unauthorized under the CBA. On April 1, 2015 Cortez filed a notice of appeal purporting to appeal from the March 23, 2015 order dismissing his class claims and the September 19, 2014 order compelling arbitration of his individual claims. Cortez argued in his appellate briefs that this court had jurisdiction to review both rulings under the death knell doctrine.

While Cortez's appeal was pending, the appellate courts in Munoz v. Chipotle Mexican Grill, Inc. (2015) 238 Cal.App.4th 291, 310, 189 Cal.Rptr.3d 134 ( Munoz ) and Miranda v. Anderson Enterprises, Inc. (2015) 241 Cal.App.4th 196, 201-202, 193 Cal.Rptr.3d 770 ( Miranda ) held the death knell doctrine did not apply to the denial of class certification or dismissal of class claims while a plaintiff's PAGA claim remained pending in the trial court. Concerned about the viability of his initial appeal, Cortez voluntarily dismissed his PAGA claim with prejudice on March 30, 2016 and filed a second notice of appeal on May 20, 2016, again identifying the September 19, 2014 order compelling arbitration and the March 23, 2015 order dismissing all class claims as the orders subject to appellate review. We consolidated the two appeals.

Cortez contends this court has jurisdiction under the death knell doctrine to review the March 2015 dismissal of his class claims either because the outstanding PAGA claim did not defeat that order's appealability under the death knell doctrine or because he removed any bar to appellate jurisdiction when he dismissed his PAGA claim in March 2016 and filed a new notice of appeal. Cortez also contends the September 2014 order compelling arbitration is an interim order affecting the class's substantial rights and thus is reviewable on appeal from the order dismissing the class claims under Code of Civil Procedure section 906. Alternatively, he requests we treat his consolidated appeal as a petition for writ of mandate, revisit our summary denial of his prior writ petition and address the merits of both the court's order compelling arbitration of his individual claims and the dismissal of his class claims.

On the merits Cortez argues his statutory claims were not encompassed by the terms of the arbitration agreement in the CBA and, even if they were, the court erred in dismissing the class claims because the right to pursue collective action—including prosecution of a class action in an arbitral forum—is a nonwaivable protected right under the National Labor Relations Act (NLRA) ( 29 U.S.C. § 151 et seq. ).

Although not fully identified by the parties in their briefs, Cortez's appeal poses several difficult jurisdictional questions, in particular, the effect of Cortez's dismissal of his PAGA claim on the appealability of the earlier order dismissing the class claims, including whether a plaintiff's voluntary action can create an appealable order under the death knell doctrine and whether the second notice of appeal from an order entered more than a year before was timely; and the applicability of Code of Civil Procedure section 906 to an order made appealable under the judicially created death knell doctrine rather than pursuant to Code of Civil Procedure section 904.1. We resolve none of those issues. Rather, in light of the uncertainty of the appealability of the orders challenged by Cortez and the absence of any delay or prejudice our intervention at this stage would cause, we find this an appropriate case in which to exercise our discretion to treat the consolidated appeal as a petition for writ of mandate and reach the merits of the superior court's orders compelling arbitration of Cortez's individual claims and terminating the class claims.

We grant Cortez's petition in part, finding Cortez's cause of action under the Labor Code for Doty Bros.' failure to timely pay wages upon his separation from employment ( Lab. Code, § 203 ) (sixth cause of action) and his unfair competition action based on that alleged statutory violation ( Bus. & Prof. Code, § 17200 ) (seventh cause of action) are not encompassed by the arbitration provision in the CBA. In all other respects, we deny the petition, concluding the remaining causes of action are subject to arbitration, and the court's termination of class claims proper on the ground the CBA does not authorize classwide arbitration.

FACTUAL AND PROCEDURAL BACKGROUND

1. The CBA Governing Cortez's Employment

From September 2008 through May 2013 Cortez was a member of Teamsters Local Union No. 986 and worked at various times as a truck driver in the employ of Doty Bros. in its water division. Doty Bros. belongs to an association of general contractors that entered into a CBA with the Teamsters on July 1, 2006 and a second CBA on July 1, 2010. Both CBA's provided, "The parties to this Agreement recognize Industrial Wage Order 16-2001 covering On Site Construction, Mining, Drilling, and Logging Industries. Any dispute or grievance arising from this Wage Order shall be processed under and in accordance with Article V, Procedure for Settlement of Grievances and disputes of this agreement." Article V established an arbitration process overseen by a board made up of union and contractor representatives.

2. Cortez's Individual Claims and Putative Class Action

Cortez sued Doty Bros. on behalf of himself and all individuals "who hold or held the position of ‘non-supervisory hourly employees in the following divisions: water, underground, and oil’ currently employed by or formerly employed by" Doty Bros. or its subsidiaries or affiliated companies. In a first amended complaint Cortez alleged on behalf of himself and the putative class that Doty Bros. failed to comply with multiple provisions of the Labor Code governing overtime pay ( Lab. Code, §§ 204, 510, 1194, 1198 ), meal periods ( Lab. Code, §§ 226.7, 512 ) and rest breaks ( Lab. Code, § 226.7 ) and requiring timely payments of wages due following termination of employment ( Lab. Code, §§ 201 - 203 ). He also alleged that Doty Bros. violated the record keeping requirements in Labor Code sections 226, 1174 and 1174.5 and Industrial Welfare Commission (IWC) wage order No. 16-2001 (Wage Order 16). Finally, Cortez alleged Doty Bros.' violations of those statutes and regulations constituted unfair competition ( Bus. & Prof. Code, § 17200 ) and provided the basis for his representative action for civil penalties under PAGA.

3. Doty Bros' Petition To Compel Arbitration

Doty Bros petitioned to compel arbitration of all Cortez's individual statutory claims and to dismiss the class claims and representative PAGA claim as unauthorized under the CBA. Cortez opposed the petition, arguing, among other things, the CBA did not contain a clear and unmistakable waiver of his right to litigate in a judicial forum his statutory claims under the Labor Code. On September 19, 2014 the superior court granted Doty Bros' petition to compel arbitration of all but Cortez's PAGA cause of action, reasoning, as to the latter claim, the right to prosecute the PAGA action in a judicial forum was nonwaivable under the Supreme Court's decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 173 Cal.Rptr.3d 289, 327 P.3d 129. The court severed and stayed the PAGA claim and ordered the remainder of Cortez's individual and class claims to arbitration, leaving it to the arbitrator to decide whether the CBA authorized classwide arbitration.

The parties thereafter stipulated to have the court, not the arbitrator, determine the question whether the CBA authorized arbitration of class claims. On March 23, 2015, following briefing and a hearing on this question, the court concluded the CBA did not contemplate arbitration of class claims. The court rejected Cortez's argument that classwide arbitration was nonwaivable under the NLRA, dismissed the class claims and directed all but the PAGA claim to be individually arbitrated. Cortez filed a notice of appeal. Later, as discussed, Cortez voluntarily dismissed his PAGA claim and filed a second notice of appeal, purporting to appeal from both the September 19, 2014 order compelling arbitration of his individual claims and the March 23, 2015 order dismissing his putative class claims.

DISCUSSION

1. Appealability

a. The March...