Wilson-Davis v. SSP Am., Inc.

• Decision Date: 11 March 2021
• Docket Number: B306781
• Citation: 62 Cal.App.5th 1080,277 Cal.Rptr.3d 258
• Court: California Court of Appeals Court of Appeals
• Parties: Tramon WILSON-DAVIS, Plaintiff and Respondent, v. SSP AMERICA, INC. et al., Defendants and Appellants.

62 Cal.App.5th 1080

277 Cal.Rptr.3d 258

Tramon WILSON-DAVIS, Plaintiff and Respondent,

v.SSP AMERICA, INC. et al., Defendants and Appellants.

B306781

Court of Appeal, Second District, Division 3, California.

Filed March 11, 2021

Littler Mendelson, Denise M. Visconti and Christina H. Hayes, San Diego, for Defendants and Appellants.

Aegis Law Firm, Kashif Haque, Irvine, Jessica L. Campbell and Ali S. Carlsen, Irvine, for Plaintiff and Respondent.

EDMON, P. J.

Plaintiff Tramon Wilson-Davis (plaintiff), individually and on behalf of a putative class, sued his employers, defendants SSP America LAX, LLC (SSP LAX) and SSP America, Inc. (SSP Inc.) (collectively, SSP) for violations of various provisions of California's wage and hour laws. SSP moved to compel arbitration pursuant to the collective bargaining agreement between it and the labor union representing plaintiff. The trial court denied the motion to compel arbitration, and SSP appealed.

We affirm. The collective bargaining agreement between SSP and the union provides for arbitration of claims arising under the agreement , but it does not waive the right to a judicial forum for claims based on statutes . The trial court therefore correctly denied SSP's motion to compel arbitration.

FACTUAL AND PROCEDURAL BACKGROUND

SSP Inc. operates food, beverage, and concessions services in airports around the country, including in California. SSP LAX, which operates out of the Los Angeles International Airport, is a subsidiary of SSP Inc. Plaintiff was employed by SSP LAX as a dishwasher beginning in August 2018.

A. The Collective Bargaining Agreement

In December 2018, SSP Inc. and Unite Here Local 11, a labor union (the union), entered into a collective bargaining agreement covering "certain employees of [SSP]," including dishwashers, "at Los Angeles International Airport."¹

Article 10 of the collective bargaining agreement, titled "Grievance Procedure," sets out a process for resolving disputes between employees and SSP.

Paragraph 10.1 defines a "grievance" as "any claim or dispute between the Employee and the Union or between the Employer and any employee which involves interpretation, application or enforcement of this Agreement disputed between the parties." Paragraph 10.2 requires that "[a]ll grievances must be filed and processed in accordance with the following exclusive procedure"—namely:

"a. The employee or Union that has a grievance shall discuss his Grievances with his supervisor or the Manager within fifteen days of the occurrence or of the time the Grievant should have reasonably had knowledge of the occurrence which gave rise to the grievance. The Grievant has the right to request the presence of a Union Representative at this Step One meeting. Similarly, Employer grievances must be discussed with the Union within said fifteen days.

"b. If the grievance is not settled in the Step One meeting, the grievance may be appealed by the employee or the Union to Step Two by filing a written grievance with the General Manager or his designated representative within ten days of the Step One meeting. Each written grievance must set forth the facts giving rise to it, any additional facts relied upon, the Section or Sections of the Agreement alleged to have been violated and the remedy or correction desired. Within five days after the filing of the written grievance, the General Manager or his designated representative will meet with the Union in an attempt to settle the grievance. The Company shall submit a written response to the grievance within ten days of the Step Two meeting ...."

Paragraph 10.3 provides that if the grievance is not resolved through the Step Two meeting, "it may be submitted ... for non-binding mediation. Both parties must agree in writing in order for a grievance to be so mediated."

Article 11 of the collective bargaining agreement is titled "Arbitration." In relevant part, it provides as follows:

"11.1 In the event the Union or the Employer desires to pursue or grieve to arbitration, they shall so notify the other party in writing within fifteen days from receipt of the written response after the Step Two meeting, or, in the event of mediation pursuant to Section 10.3, within fifteen days after the mediation hearing.

"11.2 If the grievance is not settled on the basis of the foregoing procedures, the Union or the Employer may submit the issue, in writing, to final and binding arbitration. Whichever party filed the grievance shall then have seven (7) days from the date of the letter of intent to arbitrate, to request a panel of arbitrators ....

"11.3 Before submission of the grievance to the arbitrator, the parties shall set forth in writing specifically the issue or issues to be submitted to arbitration and the arbitrator shall confine his decision to such stipulation of issue or issues. If the stipulation of issue or issues has not been arrived at by the parties at the time the arbitrator is present to hear the case, the original grievance and the written decision and appeals submitted during the processing of the grievance shall be used and considered as the subject matter for the issues of the case.... [¶] ... [¶]

"11.8 Arbitrators shall have no authority to amend, alter, add to or subtract from the terms of the Agreement.

"11.9 All arbitration decisions shall be final and binding on the parties."

B. The Present Action

Plaintiff, individually and on behalf of a putative class,² filed the present action against SSP on March 13, 2019. Plaintiff asserted eight causes of action: (1) failure to pay minimum wages ( Lab. Code,³ §§ 1194, 1197 ); (2) failure to pay overtime wages (§§ 510, 1198); (3) failure to provide meal breaks (§§ 226.7, 512); (4) failure to permit rest breaks (§ 226.7); (5) failure to reimburse business expenses (§§ 2800, 2802); (6) failure to provide accurate itemized wage statements (§ 226); (7) failure to pay all wages due upon separation of employment (§§ 201–203); and (8) unlawful business practices ( Bus. & Prof. Code, §§ 17200 et seq. ).

SSP removed the action to federal court, asserting that federal jurisdiction existed under the federal Labor Management Relations Act (LMRA) ( 29 U.S.C. §§ 151 et seq. ) because resolving the dispute would require interpreting the collective bargaining agreement. The district court disagreed and remanded the case to state court. It explained that while the LMRA gives federal courts exclusive jurisdiction of suits "for violation of contracts between an employer and a labor organization" ( 29 U.S.C. § 185, subd. (a), italics added), none of plaintiff's claims alleged a violation of a labor contract. Moreover, the court said, the collective bargaining agreement's language did not contain a " ‘clear and unmistakable’ waiver" of the employees’ rights to pursue their claims in a judicial forum. It explained: "The CBA makes clear that its grievance and arbitration procedures apply only to claims that involve ‘interpretation, application or enforcement of th[e] [CBA].’ (CBA, art. 10.1.) Plaintiff's claims, brought specifically under state law, involve neither." The court thus concluded that it did not have subject matter jurisdiction over plaintiff's claims. ( Wilson-Davis v. SSP America, Inc. (C.D. Cal. 2020) 434 F.Supp.3d 806, 810, 818.)

Following remand, plaintiff filed a first amended complaint. The amended complaint repeated the allegations from the original complaint and added a new cause of action for enforcement of the Private Attorney General Act (PAGA) (§§ 2698 et seq.).

C. Motion to Compel Arbitration

On March 13, 2020, SSP filed a motion to compel arbitration of plaintiff's claims. SSP urged: (1) the Federal Arbitration Act (FAA) governed plaintiff's claims; (2) whether plaintiff's claims were subject to arbitration was to be decided by an arbitrator, not the court; and (3) the collective bargaining agreement contained a clear and unmistakable agreement to arbitrate plaintiff's individual claims. Defendants thus asked the court to compel plaintiff to arbitrate his individual claims, and to stay any further judicial proceedings pending the outcome of the arbitration.

Plaintiff opposed the motion. He appeared to concede that the FAA governed the arbitration agreement, but urged that (1) the parties did not delegate the issue of arbitrability to the arbitrator, and (2) the collective bargaining agreement did not require arbitration of claims, like plaintiff's, that alleged violations of California law, rather than of the collective bargaining agreement. Plaintiff thus urged that none of his claims was subject to arbitration.

The trial court denied the motion to compel arbitration. The court explained that the collective bargaining agreement did not contain a " ‘clear and unmistakable’ waiver" of the rights to have either arbitrability or plaintiff's substantive claims decided by a court. Thus, it concluded, "there exists no agreement to arbitrate the statutory claims at issue in this case."

Defendants timely appealed from the order denying the petition to compel arbitration.⁴

DISCUSSION

When a dispute arises between parties to an arbitration agreement, the parties may disagree about two issues that must be addressed prior to resolving the merits of the dispute. First, parties may disagree about "the threshold arbitrability question—that is, whether their arbitration agreement applies to the particular dispute." ( Henry Schein, Inc. v. Archer and White Sales, Inc . (2019) ––– U.S. ––––, 139 S.Ct. 524, 527, 202 L.Ed.2d 480 ( Schein ); Sandoval-Ryan v. Oleander Holdings LLC (2020) 58 Cal.App.5th 217, 223, 272 Cal.Rptr.3d 314 ( Sandoval-Ryan ).) Second, parties may disagree about who —the court or the arbitrator—has the power to decide whether the dispute is arbitrable. (See First Options of Chicago v. Kaplan (1995) 514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 ( First Options ).)

Both questions are before us in the present case. First, SSP contends that the trial court erred in deciding the question of...