Securitas Sec. Servs. USA, Inc. v. Superior Court of San Diego Cnty.
Decision Date | 27 February 2015 |
Docket Number | D066873 |
Citation | 234 Cal.App.4th 1109,184 Cal.Rptr.3d 568 |
Court | California Court of Appeals Court of Appeals |
Parties | SECURITAS SECURITY SERVICES USA, INC., Petitioner, v. The SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent, Denise Edwards, Real Party in Interest. |
Tharpe & Howell and Sherry B. Shavitt, Sherman Oaks, Jennifer S. McGeorge ; Littler Mendelson and Henry Lederman, Walnut Creek, for Petitioner.
Blumenthal, Nordrehaug & Bhowmik and Norman B. Blumenthal, La Jolla, Kyle R. Nordrehaug ; Mark A. Osman, San Diego, for Real Party in Interest.
Securitas Security Services USA, Inc. (Securitas) petitions for a writ of mandate and/or prohibition challenging the superior court's order granting its amended motion to compel arbitration in which the court ordered the parties to arbitrate all of real party in interest Denise Edwards's claims, including her class action and representative claims under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, §§ 2698 et seq. ). Securitas contends the court impermissibly rewrote the parties' written dispute resolution agreement, which contained an express waiver of class, collective or representative claims; it argues the parties did not mutually agree to arbitrate class and/or representative claims and the agreement should have been deemed silent on arbitration of any class or representative action. It further contends the court erred by refusing to enforce the lawful class action waiver, as well as the PAGA waiver, because as to the latter, Edwards's waiver was voluntary, rendering the circumstances unlike those in Iskanian v. CLS Transportation (2014) 59 Cal.4th 348, [173 Cal.Rptr.3d 289, 327 P.3d 129] (Iskanian ), certiorari denied sub nom. CLS Transportation Los Angeles v. Iskanian (Jan. 20, 2015, No. 14–341) ––– U.S. ––––, 135 S.Ct. 1155, 190 L.Ed.2d 911, 2015 WL 231976. Securitas argues that because Iskanian does not apply, the parties' arbitration agreement should be enforced in its entirety as to Edwards's individual claims.
We conclude the trial court correctly ruled that Iskanian rendered the PAGA waiver within the parties' dispute resolution agreement unenforceable. However, the court then erred by invalidating and severing the waiver provision, including an enforceable class action waiver, from the agreement and sending Edwards's entire complaint, including her class action and PAGA claims, to arbitration. Under the plain language of the parties' agreement, in the event Edwards sought to arbitrate a PAGA claim, her PAGA waiver (or any other waiver of the right to bring a dispute as a class or collectively) was not severable from the remainder of the agreement, thus rendering the entire dispute resolution agreement unenforceable and precluding the court from requiring the parties to arbitrate their disputes. Though we grant Securitas's petition to the extent it seeks to set aside the order compelling Edwards's class and PAGA claims to arbitration, we deny the remainder of its requested relief, and based on our de novo interpretation of the parties' agreement, direct the trial court to enter a new order denying Securitas's amended motion to compel arbitration.
Securitas provides specialized security services throughout the United States. In June 2011, Edwards, a Securitas employee, signed an acknowledgment of receipt of Securitas's dispute resolution agreement, which was eventually placed in her personnel file. Though the dispute resolution agreement gives employees 30 days to opt out of the agreement,1 Edwards did not.
The dispute resolution agreement provides in part:
Paragraph No. 4 of the dispute resolution agreement further provides in part:
Finally, the dispute resolution agreement contains the following severability clause in paragraph No. 10:
In 2013, Edwards sued Securitas in the San Diego Superior Court, and eventually filed a first amended class action complaint alleging Securitas failed to provide all legally required meal and rest breaks to employees and failed to itemize missed meal breaks on wage statements. She sought restitution and injunctive relief under the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq. ), damages (Lab. Code, § 226 ), and a representative claim for civil penalties under the PAGA.
Securitas moved to compel arbitration and stay proceedings first in February 2014, and then via an amended motion filed in August 2014, addressing the California Supreme Court's opinion in Iskanian, supra, 59 Cal.4th 348, 173 Cal.Rptr.3d 289, 327 P.3d 129. It asked the trial court to (1) compel Edwards to arbitrate her individual claims; (2) dismiss and/or sever and stay her class claims; and (3) dismiss and/or stay her PAGA claim. Alternatively, it asked the court to sever and stay Edwards's PAGA claim under Code of Civil Procedure section 1281.2. Securitas argued that the Federal Arbitration Act (9 U.S.C. § 2(FAA) ) required enforcement of Edwards's voluntary agreement to arbitrate her claims on an individual basis, and that the dispute resolution agreement required her class and PAGA claims be dismissed. It argued that Iskanian held agreements containing class action waivers were enforceable, and that Edwards's PAGA claim was an individual claim because Iskanian did not apply to voluntary agreements to arbitrate PAGA claims individually. It maintained that because Edwards was not compelled to agree to the dispute resolution agreement but voluntarily did so by not opting out, Iskanian did not govern, requiring enforcement of the dispute resolution agreement in its entirety. Securitas further challenged Iskanian 's reasoning and viability under other United States Supreme Court precedent and federal preemptive rules.
Edwards opposed the motion. She pointed out that in the absence of the PAGA waiver, she would not contest the enforceability of the class action waiver. As to her right to bring a representative PAGA claim, she argued that notwithstanding the dispute resolution agreement's opt out provision, her right was unwaivable and the PAGA waiver was contrary to public policy under Iskanian, supra, 59 Cal.4th 348, 173 Cal.Rptr.3d 289, 327 P.3d 129, which held prospective, predispute PAGA waivers unenforceable. She asserted that because the dispute resolution agreement prohibited severance of the PAGA waiver, California contract law rendered the entire agreement illegal and unenforceable, and that the forum for her claims was the superior court.
In reply, Securitas argued in part that the dispute resolution agreement did not prohibit the court from severing and staying Edwards's PAGA claim and that a complete reading of the dispute resolution agreement, particularly the class action waiver provision of paragraph No. 4 with the severability provision of paragraph No. 10, made clear that the parties did not agree to arbitrate a PAGA claim, and it was this concept that could not be severed. According to Securitas, if the PAGA waiver was invalid or unenforceable, the proper forum for Edwards's PAGA claim was in court, and it asked for the PAGA claim to be severed and stayed during arbitration of Edwards's individual claims.
After hearing arguments on the matter, the court granted Securitas's motion to compel arbitration. It found “the parties entered into a valid and binding arbitration agreement and there is no contractual basis to revoke the agreement.” It also found the agreement was “neither procedurally nor substantively unconscionable.” However,...
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