Tanguilig v. Bloomingdale's, Inc.
Decision Date | 16 November 2016 |
Docket Number | A145283 |
Court | California Court of Appeals Court of Appeals |
Parties | Bernadette TANGUILIG, Plaintiff and Respondent, v. BLOOMINGDALE'S, INC., Defendant and Appellant. |
Jackson Lewis, David S. Bradshaw, Nathan W. Austin, Sacramento, Patrick C. Mullin, San Francisco; and Michael C. Christman for Defendant and Appellant.
Cornerstone Law Group, Gordon W. Renneisen, Harry G. Lewis and Jennifer A. Donnellan, San Francisco, for Plaintiff and Respondent.
Bernadette Tanguilig, an employee at Bloomingdale's, Inc. (Bloomingdale's), filed a representative action on behalf of herself and fellow employees pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq. ),1 alleging several Labor Code violations by the company. Bloomingdale's moved to compel arbitration of Tanguilig's "individual PAGA claim" and stay or dismiss the remainder of the complaint. The trial court denied the motion. We affirm. Under Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 173 Cal.Rptr.3d 289, 327 P.3d 129 (Iskanian ) and consistent with the Federal Arbitration Act (FAA) (9 U.S.C. et seq.), a PAGA representative claim is nonwaivable by a plaintiff-employee via a predispute arbitration agreement with an employer, and a PAGA claim (whether individual or representative) cannot be ordered to arbitration without the state's consent.
Because this case turns on a proper understanding of PAGA and application of Supreme Court precedent, we begin with pertinent passages from Iskanian discussing these issues: " ‘In September 2003, the Legislature enacted [PAGA]. 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.)
Iskanian holds that an employee's right to bring a PAGA action is nonwaivable under state law (Iskanian, supra, 59 Cal.4th at pp. 382–383, 173 Cal.Rptr.3d 289, 327 P.3d 129, citing Civ. Code, §§ 1668, 3513 ), and this state-law rule is not preempted by the FAA: "We conclude that the rule against PAGA waivers does not frustrate the FAA's objectives because ... the FAA aims to ensure an efficient forum for the resolution of private disputes, whereas a PAGA action is a dispute between an employer and the state [Labor and Workforce Development] Agency." (Iskanian , at p. 384, 173 Cal.Rptr.3d 289, 327 P.3d 129.) (Id. at pp. 387–388, 173 Cal.Rptr.3d 289, 327 P.3d 129 ; see Sakkab v. Luxottica Retail North America, Inc. (9th Cir. 2015) 803 F.3d 425, 431–440 [ ].)
On August 15, 2014, Tanguilig filed a "representative PAGA action ... on behalf of the state of California, and on behalf of herself and other current or former employees ..., assert[ing] claims for civil penalties and statutory remedies." Tanguilig alleged she was a current Bloomingdale's employee and the company failed to provide its commission-earning employees with paid rest periods, minimum wage for noncommission-producing activities, complete and accurate wage statements, and timely payment of their wages.
Bloomingdale's filed a motion to compel arbitration. The company produced a copy of the dispute resolution procedure (Agreement) that Tanguilig accepted as a condition of her employment. The Agreement required Tanguilig to submit "all employment-related legal disputes, controversies or claims" to a four-step dispute resolution process that culminated in final and binding arbitration. The Agreement prohibited an arbitrator from "consolidat[ing] claims of different [employees] into one (1) proceeding" and from "hear[ing] an arbitration as a class or collective action."2
Iskanian had been decided by the time Bloomingdale's filed its motion. However, Bloomingdale's argued Iskanian was wrongly decided. It also argued this case was distinguishable from Iskanian because Tanguilig, unlike Iskanian, had the ability to opt out of the arbitration process. Bloomingdale's asked the trial court to "(1) compel the arbitration of Tanguilig's individual claims; and (2) stay this litigation as required by the [FAA]." In opposition, Tanguilig argued she had asserted no individual claims; a predispute waiver of representative PAGA claims was unenforceable under Iskanian ; Iskanian was not distinguishable on the basis of the Agreement's opt-out provision as Iskanian exempted only certain postdispute waivers; and the representative action waiver rendered the Agreement unconscionable. In reply, Bloomingdale's argued the individual element of Tanguilig's PAGA claim was subject to arbitration and, even if the individual element was not arbitrable, the representative action waiver was enforceable. Bloomingdale's asked the court to "compel [Tanguilig's] individual PAGA claim to arbitration," or "[i]f the Court concludes that the PAGA claim cannot be brought on an individual basis, ... [to] dismiss the Complaint."
The court denied the motion to compel, ruling the representative action waiver was unenforceable under Iskanian despite the existence of an opt-out procedure in the Agreement. Bloomingdale's appealed.
On appeal, Bloomingdale's no longer argues Iskanian is distinguishable based on the opt-out provision. Instead, it argues that the case was wrongly decided or, if Iskanian correctly ruled that a representative action waiver is unenforceable despite the FAA, that Tanguilig should have been required to arbitrate the individual element of her PAGA claim.
This appeal presents questions of law that we review de novo. (Franco v. Arakelian Enterprises, Inc. (2015) 234 Cal.App.4th 947, 955, 184 Cal.Rptr.3d 501.) We affirm the trial court's denial of the motion to compel arbitration in its entirety.
We first reject Bloomingdale's suggestion that we depart from Iskanian either as wrongly decided or as superseded by intervening United States Supreme Court precedent.
In its opening brief, Bloomingdale's relies on pre-Iskanian United States Supreme Court decisions and post-Iskanian federal district court decisions to support its argument that the case was wrongly decided....
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