Williams v. Superior Court of L.A. Cnty.

• Decision Date: 09 June 2015
• Docket Number: B261007
• Citation: 237 Cal.App.4th 642,188 Cal.Rptr.3d 83
• Court: California Court of Appeals Court of Appeals
• Parties: Andre WILLIAMS, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Pinkerton Governmental Services, Inc., Real Party in Interest.

237 Cal.App.4th 642

188 Cal.Rptr.3d 83

Andre WILLIAMS, Petitioner

v. The SUPERIOR COURT of Los Angeles County, Respondent;Pinkerton Governmental Services, Inc., Real Party in Interest.

B261007

Court of Appeal, Second District, Division 4, California.

Filed June 9, 2015

Diversity Law Group, Larry W. Lee and Nicholas Rosenthal, Los Angeles, for Petitioner.

No appearance for Respondent.

Littler Mendelson, Henry D. Lederman, Walnut Creek, J. Kevin Lilly, Los Angeles; Tharpe & Howell, Sherry B. Shavit, and Jennifer S. McGeorge, Sherman Oaks, for Real Party in Interest.

MANELLA, J.

INTRODUCTION

Petitioner Andre Williams filed a single-count representative action pursuant to the Labor Code Private Attorneys General Act of 2004, Labor Code section 2699 et seq. (PAGA), alleging that real party in interest Pinkerton Governmental Services, Inc. (Pinkerton), violated various provisions of the Labor Code.¹ In response, Pinkerton moved to enforce petitioner's waiver of his right to assert a representative PAGA claim, or alternatively, for an order staying the PAGA claim, but sending the “individual claim” that petitioner had been subjected to Labor Code violations to arbitration pursuant to a written agreement. The trial court denied the motion to enforce the waiver, but granted the alternative relief. Williams petitioned this court for a writ reversing the trial court's order, arguing that it violated Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384 [173 Cal.Rptr.3d 289, 327 P.3d 129] (Iskanian ). We agree with the trial court that under Iskanian, the waiver of a right to assert a representative PAGA claim in any forum is unenforceable. However, we conclude that petitioner's single cause of action under PAGA cannot be split into an arbitrable “individual claim” and a nonarbitrable representative claim. Accordingly, we grant the petition.

PROCEDURAL HISTORY

On December 12, 2012, petitioner filed a claim pursuant to PAGA on behalf of himself and similarly situated aggrieved employees. He sought penalties and/or damages against Pinkerton for its alleged failure to provide off-duty rest periods, as required by section 226.7 and the applicable wage orders of the California Industrial Welfare Commission.

On September 17, 2013, Pinkerton moved for an order to enforce petitioner's waiver of his representative PAGA claim, or in the alternative, for an order compelling petitioner to submit “the rest period controversy underlying his PAGA claim” to arbitration pursuant to the Federal Arbitration Act, title 9 United States Code sections 2 et seq. (FAA), while severing and staying the PAGA claim pending the outcome of arbitration pursuant to Code of Civil Procedure section 1281.2. Pinkerton argued that Iskanian does not preclude enforcement of a voluntary agreement to waive a representative PAGA action. Pinkerton noted that the arbitration agreement at issue, which included a class and representative action waiver, allowed petitioner to opt out without suffering any adverse employment action as a consequence of that decision. Alternatively, Pinkerton argued that petitioner must first arbitrate his “individual claim” because “he is required to prove the underlying rest period violation in order to prevail, and the [arbitration agreement] mandates that rest period claims be arbitrated.”

Petitioner opposed the motion, arguing that Iskanian compelled a denial of Pinkerton's motion. He noted that he had brought a single cause of action under PAGA, and had asserted no “individual claims” or class claims. Thus, petitioner argued, under Iskanian, he was entitled to bring the representative PAGA action in court. Petitioner also argued that requiring him to arbitrate first whether he had suffered from violations of the Labor Code—i.e., whether he was an “aggrieved employee”—would render Iskanian meaningless, as only an “aggrieved employee” may bring a PAGA action. According to petitioner, ordering arbitration of the underlying Labor Code violation would establish the merits of the representative PAGA claim, effectively—and improperly—compelling him to resolve his PAGA claim in the arbitral forum.²

In reply, Pinkerton reiterated that the instant case differed from Iskanian because the arbitration agreement here allowed the employee to opt out without any repercussion. Pinkerton also argued that requiring petitioner to arbitrate would resolve only the merits of his underlying rest period claim, not whether any other employee was an “aggrieved employee.” The latter would have to be either “litigated or arbitrated.”

On October 31, 2014, the trial court denied Pinkerton's motion to enforce petitioner's written agreement to waive his right to bring a representative PAGA action, but granted the alternative relief requested. Specifically, the court held that under Iskanian, Pinkerton could not force petitioner to waive or arbitrate his PAGA claim. However, the court found the “threshold dispute between plaintiff ... and his former employer as to whether or not he was denied off-duty rest periods” to be “an unresolved dispute which is amenable to arbitration under Iskanian, ” and that Pinkerton had a right under the arbitration agreement to have that threshold question resolved by arbitration. Accordingly, the court ordered that the “ ‘rest period controversy underlying [petitioner's] PAGA claim’ ” be submitted to arbitration pursuant to the FAA, while purporting to sever and stay the representative PAGA claim pending the outcome of arbitration pursuant to Code of Civil Procedure section 1281.2.

Petitioner filed a motion for reconsideration, which the trial court denied. In the denial order, the court stated that it “continues to believe that arbitration of the narrow question of whether or not plaintiff Williams is factually and legally an ‘aggrieved’ person, not just someone who asserts that he is aggrieved, is required to give force and effect to the parties' binding arbitration agreement, the enforceability of which is controlled by a federal statute.”

On December 30, 2014, petitioner filed a petition for writ of mandate, seeking a reversal of the trial court's order. On February 13, 2015, this court issued an alternative writ of mandate and order. We ordered the trial court either to vacate its prior order and enter an order denying Pinkerton's motion in its entirety, or to show cause why a peremptory writ of mandate ordering the court to do so should not issue. We noted that petitioner had alleged a single cause of action under PAGA which is not subject to arbitration under Iskanian, and that he had asserted no separate individual Labor Code claim for damages. On February 17, 2015, the trial court declined to vacate its October 31, 2014 order.

DISCUSSION

This matter involves the applicability of Iskanian to cases where a plaintiff who agreed to arbitrate Labor Code violations and to waive the right to bring a representative PAGA claim in any forum asserts a single cause of action under PAGA.³ In Iskanian, the plaintiff asserted individual, class and PAGA claims against his former employer for alleged violations of the Labor Code and unfair competition law. As a condition of his employment, the plaintiff had agreed to arbitrate “ ‘any and all claims' ” arising out of his employment. Additionally, he had agreed to waive his right to bring class and representative actions in any forum, including arbitration. (Iskanian, supra, 59 Cal.4th at pp. 360–361, 173 Cal.Rptr.3d 289, 327 P.3d 129.) The California Supreme Court held that the individual claims were subject to arbitration and that the class action waiver was valid. (Id . at pp. 360 & 391, 173 Cal.Rptr.3d 289, 327 P.3d 129.) However, because “an employee's right to bring a PAGA action is unwaivable,” the court found the “agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy” and unenforceable as a matter of state law. (Id . at pp. 360 & 383–384, 173 Cal.Rptr.3d 289, 327 P.3d 129.)

Pinkerton argues that Iskanian is inapplicable, as unlike the representative action waiver there, the instant waiver was not a “condition of employment,” but allowed the employee to opt out of the representative action waiver without adverse consequences. This same argument was raised and rejected in Securitas Security Services USA, Inc. v. Superior Court (2015) 234 Cal.App.4th 1109 (Securitas ). There, the appellate court held that an agreement's PAGA waiver violated public policy, notwithstanding that the employee was not required to enter into it as a condition of employment. (Id . at p. 1121, 184 Cal.Rptr.3d 568.) As the court explained, “Iskanian 's underlying public policy rationale—that a PAGA waiver circumvents the Legislature's intent to empower employees to enforce the Labor Code as agency representatives and harms the state's interest in enforcing the Labor Code—does not turn on how the employer and employee entered into the agreement, or the mandatory or voluntary nature of the employee's initial consent to the agreement.” (Id . at p. 1122, 184 Cal.Rptr.3d 568.) The reason is that “[a] PAGA claim provides a remedy inuring to the state and the public, and the law ... broadly precludes private agreements to waive such public rights.” (Ibid. citing Iskanian, supra, 59 Cal.4th at p. 383, 173 Cal.Rptr.3d 289, 327 P.3d 129 & Civ.Code §§ 1668, 3513.) We agree with the Securitas court. Under Civil Code section 3513, “[a]ny one may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement.” (See Civ.Code, § 1668 [“[a]ll contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for ... violation of the law, whether willful or negligent are against the policy of the law”].) Thus, an employee may not voluntarily waive the advantages of a law intended solely for the...