Lawson v. ZB, N.A., D071279

CourtCalifornia Court of Appeals
Writing for the CourtBENKE, Acting P. J.
Citation227 Cal.Rptr.3d 613,18 Cal.App.5th 705
Parties Kalethia LAWSON, Plaintiff and Respondent, v. ZB, N.A. et al., Defendants and Appellants. ZB, N.A. et al., Petitioners, v. The Superior Court of San Diego County, Respondent; Kalethia Lawson, Real Party in Interest.
Docket NumberD071279,D071376
Decision Date19 December 2017

18 Cal.App.5th 705
227 Cal.Rptr.3d 613

Kalethia LAWSON, Plaintiff and Respondent,
ZB, N.A. et al., Defendants and Appellants.

ZB, N.A. et al., Petitioners,
The Superior Court of San Diego County, Respondent;

Kalethia Lawson, Real Party in Interest.


Court of Appeal, Fourth District, Division 1, California.

Filed December 19, 2017
As Modified December 21, 2017

Rutan & Tucker, James L. Morris and Brian C. Sinclair, Costa Mesa, for Defendants and Appellants.

Lawyers for Justice, Edwin Aiwazian, Arby Aiwazian, Glendale, and Joanna Ghosh, for Plaintiff and Respondent.

BENKE, Acting P. J.

18 Cal.App.5th 712

An order granting a motion to arbitrate is not appealable. Here, the trial court granted appellant ZB, N.A.'s (ZB)1 motion to arbitrate respondent Kalethia Lawson's wage and hour claim, which was brought under the provisions of the Private Attorneys General Act (the PAGA), Labor Code 2 section 2698 et seq. The fact Lawson's PAGA claim, of necessity, included not only Labor Code violations committed with respect to her employment, but violations with respect to other employees, and that the arbitration ordered by the trial court included those violations, does not alter the fact the trial court ordered that Lawson's claim be arbitrated. Hence, we have no appellate jurisdiction over the trial court's order compelling arbitration.

However, apparently recognizing the potential defect in its appeal, shortly after ZB filed its notice of appeal, ZB filed a petition for a writ of mandate challenging the trial court's order. We thereafter ordered that the appeal and petition be considered together and issued an order to show cause. By separate order we have now consolidated the appeal and the writ proceeding and reach the merits of ZB's contentions with respect to the trial court's order in our disposition of ZB's petition for extraordinary relief.

In our disposition on the merits, we find the trial court erred in bifurcating the underpaid wages portion of Lawson's PAGA claim and ordering arbitration of that portion of the claim. Accordingly, we issue a writ directing the trial court to vacate its order bifurcating and compelling arbitration of the underpaid wages portion of Lawson's PAGA claim.


According to the allegations of her complaint Lawson began working for California Bank & Trust (CBT) as an hourly employee in 2013. CBT is a

18 Cal.App.5th 713

wholly owned subsidiary of ZB. In February 2016, Lawson

227 Cal.Rptr.3d 616

filed a complaint against CBT and ZB, in which she alleged that CBT and ZB violated a host of labor laws and regulations including required: overtime compensation, meal and rest periods, minimum wages, payment upon discharge or resignation, timely wage payments, accurate age statements, payroll records, and reimbursement for work-related expenses. Lawson alleged she was acting as a representative under PAGA and was entitled to recover from the defendant the penalties imposed under section 558 subdivisions (a)(1) and (a)(2), including in particular underpaid wages owed to her and other CBT employees.3

In response to Lawson's complaint, and relying on an arbitration provision in her employment agreement, ZB filed a motion to compel Lawson to arbitrate the underpaid wages she asserted she, as an individual , was owed. ZB noted that Lawson had waived the right to bring either a class action or representative action against it. ZB argued that in light of that waiver, in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 387–388, 173 Cal.Rptr.3d 289, 327 P.3d 129 ( Iskanian ), our Supreme Court prevented her from asserting lost wage claims on behalf of other CBT employees. ZB did not ask the trial court to order arbitration of the specific $50 and $100 amounts set forth in section 558 subdivisions (a)(1) and (a)(2), as

18 Cal.App.5th 714

part of the civil penalties the statute imposes for violations of the Labor Code and orders of the Industrial Welfare Commission. The trial court granted ZB's motion. The trial court bifurcated Lawson's underpaid wage claims from her claim to the specific $50 and $100 amounts imposed by section 558. However, because Lawson was acting as a PAGA representative, the trial court ordered that the underpaid wage portion of her claim would be arbitrated as a representative claim. The trial court's order states in pertinent part: "[T]he Court bifurcates this issue of unpaid wages and premium wages per

227 Cal.Rptr.3d 617

California Labor Code section 558 against Defendants and compels that issue to arbitration. This is a representative action. PAGA, by its very nature, is a representative statute. Therefore, the court sends the claim under Labor Code Section 558 to arbitration as a representative action."

ZB filed a timely notice of appeal, as well as a petition for a writ of mandate.


ZB's Appeal


Code of Civil Procedure section 1294 provides in pertinent part: "An aggrieved party may appeal from: (a) An order dismissing or denying a petition to compel arbitration." (Italics added.) The right to appeal is solely statutory and no statute permits an appeal from an order compelling arbitration. ( Porter v. United Services Automobile Assn. (2001) 90 Cal.App.4th 837, 839–840, 108 Cal.Rptr.2d 860 [appeal wholly statutory] ( Porter ); Abramson v. Juniper Networks, Inc. (2004) 115 Cal.App.4th 638, 648–649, 9 Cal.Rptr.3d 422 ; Gordon v. G.R.O.U.P., Inc. (1996) 49 Cal.App.4th 998, 1004, fn. 8, 56 Cal.Rptr.2d 914. [no appeal from order granting arbitration].)4

We of course agree that when an order delays or otherwise interferes with arbitration, it is the functional equivalent of an order denying arbitration and appealable under section 1294, subdivision (a). (See Sanders v. Kinko's Inc. (2002) 99 Cal.App.4th 1106, 1109-1110, 121 Cal.Rptr.2d 766 ; Porter, supra , 90 Cal.App.4th at p. 840, 108 Cal.Rptr.2d 860 ;

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Henry v. Alcove Investment, Inc. (1991) 233 Cal.App.3d 94, 99, 284 Cal.Rptr. 255.) Here, admittedly, the scope of the arbitration ordered by the trial court is broader than ZB requested and arguably frustrated the purposes of arbitration. (See AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 346, 131 S.Ct. 1740, 179 L.Ed.2d 742 ( Concepcion ).) Nonetheless, we are not willing to agree that an order, which on its face compels arbitration, albeit an arbitration which is so broad that it may undermine the benefits usually provided by arbitral forums, may be treated as an order which, as a practical matter, denies arbitration.

Our unwillingness to find appellate jurisdiction here is, in some measure, informed by ZB's petition for a writ of mandate by which it raises the same arguments on the merits it asserts on appeal and our conclusion those issues are the appropriate subject of writ review. "California courts had held that writ review of orders compelling arbitration is proper in at least two circumstances: (1) if the matters ordered arbitrated fall clearly outside the scope of the arbitration agreement or (2) if the arbitration would appear to be unduly time consuming or expensive. [Citations.]" ( Zembsch v. Superior Court (2006) 146 Cal.App.4th 153, 160, 53 Cal.Rptr.3d 69 ; see also Wheeler, supra , 63 Cal.App.3d at p. 353, 133 Cal.Rptr. 775.) As we discuss more fully below, in bringing her PAGA claim Lawson was acting on behalf of the state and the state has not agreed to arbitrate its claim. Hence, it is clear Lawson's

227 Cal.Rptr.3d 618

claim is outside the scope of the arbitration agreement she signed and that writ relief is appropriate. In considering whether extraordinary relief is appropriate, we must recognize also the express public interest, which we discuss more fully below, embraced in the PAGA and the consequent public interest in assuring that PAGA claims are enforced under the circumstances contemplated by the Legislature. (See Babb v. Superior Court (1971) 3 Cal.3d 841, 851, 92 Cal.Rptr. 179, 479 P.2d 379.)



The court summarized the Legislature's enactment of PAGA in Arias v. Superior Court (2009) 46 Cal.4th 969, 980–981, 95 Cal.Rptr.3d 588, 209 P.3d 923 ( Arias ): "In September 2003, the Legislature enacted the Labor Code Private Attorneys General Act of 2004 [citations]. The Legislature declared that adequate financing of labor law enforcement was necessary to achieve maximum compliance with state labor laws, that staffing levels for labor law enforcement agencies had declined and were unlikely to keep pace with the future growth of the labor market, and that it was therefore in the public interest to allow aggrieved employees, acting as private attorneys general, to recover civil penalties for Labor Code violations, with the understanding that labor law enforcement agencies were to retain primacy over private enforcement efforts. (Stats. 2003, ch. 906, § 1.)

18 Cal.App.5th 716

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