Provost v. YourMechanic, Inc.

Filed 10/15/20
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
JONATHAN PROVOST, D076569
Plaintiff and Respondent,
v. (Super. Ct. No. 37-2017-
00024056 CU-OE-CTL)
YOURMECHANIC, INC.,
Defendant and Appellant.
APPEAL from an order of the Superior Court of San Diego County,
John S. Meyer, Judge. Affirmed.
Littler Mendelson and Andrew Spurchise; Littler Mendelson, Sophia
Behnia and Perry Miska, for Defendant and Appellant.
Blumenthal Nordrehaug Bhowmik De Blouw, Norman B. Blumenthal
and Kyle R. Nordrehaug, for Plaintiff and Respondent.
Defendant YourMechanic, Inc. (sometimes, YourMechanic or company)
appeals the trial court order denying its motion to compel arbitration
(sometimes, motion). YourMechanic sought to compel plaintiff Jonathan
Provost to arbitrate whether he was an “aggrieved employee” within the
meaning of the Labor Code1 before he could proceed under the Private
Attorneys General Act of 2004 (PAGA) (§ 2698 et seq.) with his single-count
1 All further statutory references are to the Labor Code unless otherwise
noted.
representative action alleging various Labor Code violations against
company.
We independently conclude the court properly denied YourMechanic’s
motion. As we explain, requiring Provost to arbitrate whether he was an
“aggrieved employee” with standing to bring a representative PAGA action
would require splitting that single action into two components: an arbitrable
“individual” claim (i.e., whether he was an independent contractor or
employee under either the parties’ written arbitration provision or section
226.8 (discussed post), making it unlawful to willfully misclassify an
individual as an independent contractor); and a nonarbitrable representative
claim. Our conclusion is based on a series of cases holding a PAGA-only
representative action is not an individual action at all, but instead is one that
is indivisible and belongs solely to the state. Therefore, YourMechanic
cannot require Provost to submit by contract any part of his representative
PAGA action to arbitration. Affirmed.
BACKGROUND
The operative complaint, brought on behalf of Provost, other "aggrieved
employees" of YourMechanic, and the people of this state, sought civil
penalties under PAGA beginning June 30, 2016, until a date determined by
the court (hereinafter, PAGA period). The complaint alleged YourMechanic
during the PAGA period violated myriad sections of the Labor Code and
applicable industrial wage orders, including failing to pay Provost and all
others similarly situated wages in a timely manner, overtime, and for all
other hours worked; and provide all minimum wages, accurate itemized wage
statements, and required business expenses.
2
The complaint further alleged that YourMechanic “willful[ly]
misclassified” (see § 226.8, subd. (a)(1)2) Provost and other aggrieved
employees as independent contractors, subjecting YourMechanic to a
minimum “civil penalty of not less than five thousand dollars ($5,000) and
not more than fifteen thousand dollars ($15,000) for each violation.” (See id.,
subd. (b).) The complaint also provided Provost had notified the Labor and
Workforce Development Agency (LWDA), which enforces California's labor
laws, of his intent to seek PAGA penalties.3
YourMechanic moved to compel arbitration. The premise of
YourMechanic's motion was that the complaint was subject to a four-page,
multi-section binding arbitration provision (sometimes, arbitration provision)
included in its 20-page, pre-printed form Technology Services Agreement
2 Subdivision (a) of section 226.8 provides: “It is unlawful for any person
or employer to engage in any of the following activities: [¶] (1) Willful
misclassification of an individual as an independent contractor.” Subdivision
(i)(4) of this statute defines “willful misclassification” to mean “avoiding
employee status for an individual by voluntarily and knowingly
misclassifying that individual as an independent contractor.”
3 Subdivision (c) of section 226.8 provides that, if the LWDA or a court
determines a person or employer violated section (a) of this statute “and the
person or employer has engaged in or is engaging in a pattern or practice of
these violations, the person or employer shall be subject to a civil penalty of
not less than ten thousand dollars ($10,000) and not more than twenty-five
thousand dollars ($25,000) for each violation, in addition to any other
penalties or fines permitted by law.”
3
(sometimes, TSA)4 executed by Provost when he clicked the "I accept" button
at the end of this Agreement. LWDA was not a party to the TSA.
The arbitration provision in part provided: "Except as it otherwise
provides, this Arbitration Provision also applies, without limitation, to all
disputes between You [i.e., Provost] and the Company, as well as to all
disputes between You and the Company's fiduciaries, administrators,
affiliates, subsidiaries, parents, and all successors and assigns of any of them,
including but not limited to any disputes arising out of or related to this
Agreement and disputes arising out of or related to your relationship with
the Company, including termination of the relationship."
The arbitration provision further provided that all disputes between
Provost and YourMechanic, including those "relating to interpretation or
application of this Arbitration Provision," were to be "resolved only by an
arbitrator through final and binding arbitration on an individual basis only
and not by way of court or jury trial, or by way of class, collective, or
representative action" (emphasis omitted); that arbitration would be
"governed by the Federal Arbitration Act" (FAA), while the interpretation of
the TSA would be "governed by California law"; and that Provost could opt-
out of arbitration within 30 days of executing the TSA, which he did not do.
4 The parties have neither argued nor have we considered whether the
preprinted TSA, including any individual provisions contained therein, were
procedurally or substantively unconscionable. (See e.g., Pinnacle Museum
Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th
223, 246 [noting unconscionability consists of both procedural and
substantive elements, in which procedural unconscionability "addresses the
circumstances of contract negotiation and formation, focusing on oppression
or surprise due to unequal bargaining power," whereas "[s]ubstantive
unconscionability pertains to the fairness of an agreement’s actual terms and
to assessments of whether they are overly harsh or one-sided"].)
4
The trial court in its August 9, 2019 minute order denied
YourMechanic's motion. The court recognized that Provost’s PAGA action
alleged various Labor Code violations, including, as noted, a violation of
section 226.8 for misclassification of an individual as an independent
contractor.
The court next framed as follows YourMechanic’s argument in support
of the motion: “Only an employee is entitled to bring claims under PAGA.
Thus, it is only after a determination by an arbitrator that Plaintiff is an
employee, and not an independent contractor, that the Court may determine
whether and to what extent Plaintiff suffered any Labor Code violations for
which penalties may be recovered under PAGA. [Citation.]”
The court found YourMechanic’s argument would contravene the law
(discussed post) by requiring the court to “split the PAGA into an individual
claim,” including on the section 226.8 alleged misclassification violation, and
a representative claim. The court therefore denied the motion.
The parties subsequently entered into a stipulation to stay the case
after YourMechanic appealed the court's August 9 order, which stipulation
the court approved on September 3.
DISCUSSION
A. PAGA
The Labor Code authorizes LWDA to collect civil penalties from
employers for specified labor law violations. (Julian v. Glenair, Inc. (2017) 17
Cal.App.5th 853, 865 (Julian).) The Legislature in 2003 enacted PAGA and
it became effective on January 1, 2004. (Arias v. Superior Court (2009) 46
Cal.4th 969, 980.) The Legislature found and declared that (1) adequate
financing of labor law enforcement was necessary to achieve maximum
compliance with state labor laws; (2) in some situations the only meaningful
5
deterrent to unlawful conduct was the vigorous assessment and collection of
civil penalties; (3) staffing levels for labor law enforcement agencies had
declined and were unlikely to keep pace with the future growth of the labor
market; and (4) it was therefore in the public interest to allow aggrieved
employees, acting as private attorneys general, to recover civil penalties for
Labor Code violations, while also ensuring that labor law enforcement
agencies' enforcement actions have primacy over private enforcement efforts.
(Stats. 2003, ch. 906, § 1, eff. Jan. 1, 2004.)
The authorization to pursue PAGA civil penalties in a lawsuit is
contained in section 2699, subdivision (a), which states in part: “any
provision of this code that provides for a civil penalty to be assessed and
collected by the [LWDA] . . . for a violation of this code, may, as an
alternative, be recovered through a civil action brought by an aggrieved
employee on behalf of himself or herself and other current or former
employees pursuant to the procedures specified in Section 2699.3.” (Italics
added.) An “aggrieved employee” is defined as “any person who was
employed by the alleged violator and against whom one or more of the alleged
violations was committed.” (§ 2699, subd. (c).)
PAGA therefore works by empowering aggrieved employees to act as
LWDA’s proxy or agent to bring representative actions to recover statutory
civil penalties for their employers’ violations. (Julian, supra, 17 Cal.App.5th
at p. 865.) A PAGA action is “ ‘a substitute for an action brought by the
government itself’ ” (ibid.), where the governmental entity “is always the real
party in interest.” (Iskanian v. CLS Transportation Los Angeles, LLC (2014)
59 Cal.4th 348, 382 (Iskanian).) To obtain authority to prosecute and collect
the penalties, PAGA requires aggrieved employees to give LWDA notice.
(§ 2699.3, subd. (a)(1)(A).)
6
The Legislature provided two financial incentives for aggrieved
employees to pursue the recovery of civil penalties under PAGA. First, when
a civil penalty is recovered under PAGA, 75 percent goes to LWDA and the
remaining 25 percent goes to the aggrieved employees. (§ 2699, subd. (i).)
Second, any employee who prevails in an action is entitled to his or her
reasonable attorney fees and costs. (Id., subd. (g)(1).)
Penalties under PAGA are unique to that statute. “The civil penalties
recovered on behalf of the state under the PAGA are distinct from the
statutory damages to which employees may be entitled in their individual
capacities.” (Iskanian, supra, 59 Cal.4th at p. 381; see ZB, N.A. v. Superior
Court (2019) 8 Cal.5th 175, 197 (ZB, N.A.) [§ 558 unpaid wage action for
compensatory relief different from PAGA civil penalties].) Therefore, a suit
to recover statutory civil penalties under PAGA is “ ‘ “fundamentally a law
enforcement action designed to protect the public and not to benefit private
parties.” ’ ” (Iskanian, at p. 387.)
Additionally, PAGA “forecloses separate but similar actions by different
employees against the same employer.” (Julian, supra, 17 Cal.App.5th at p.
866.) “ ‘Because an aggrieved employee’s action under [PAGA] functions as a
substitute for an action brought by the government itself, a judgment in that
action binds all those, including nonparty aggrieved employees, who would be
bound by a judgment in an action brought by the government. [PAGA]
authorizes a representative action only for the purpose of seeking statutory
penalties for Labor Code violations.’ ” (Iskanian, supra, 59 Cal.4th at p. 381.)
For this reason, “[a]ll PAGA claims are ‘representative’ actions in the sense
that they are brought on the state's behalf.” (ZB, N.A., supra, 8 Cal.5th at p.
185; accord Iskanian, at p. 380.)
7
B. Iskanian
Our high court in Iskanian, supra, 59 Cal.4th at page 360, analyzed
whether a predispute waiver of a representative PAGA claim was valid and
enforceable. In Iskanian, the plaintiff signed an agreement providing that all
claims arising out of his employment were to be submitted to arbitration and
that the parties would not assert representative claims. The plaintiff alleged
causes of action against his employer for violations of the Labor Code and
alleged a PAGA claim. The appellate court affirmed the trial court's grant of
the employer's motion to compel arbitration, reasoning that the plaintiff was
obligated to arbitrate the PAGA claim but was barred from litigating that
claim in a representative capacity. (Id. at pp. 361–362.)
Iskanian found unenforceable predispute waivers requiring employees
to relinquish the right to assert a PAGA claim on behalf of other employees,
as such waivers violated public policy because they “harm the state’s
interests in enforcing the Labor Code and in receiving the proceeds of civil
penalties used to deter violations.” (59 Cal.4th at p. 383.) Iskanian
succinctly declared, “an employee's right to bring a PAGA action is
unwaivable.” (Ibid.)
The Iskanian court also found the FAA did not preempt this state law
rule invalidating waivers in arbitration agreements of the right to bring
representative PAGA actions. (59 Cal.4th at p. 384.) Our high court
reasoned: “Simply put, a PAGA claim lies outside the FAA's coverage
because it is not a dispute between an employer and an employee arising out
of their contractual relationship. It is a dispute between an employer and the
state, which alleges directly or through its agents—either the Agency or
aggrieved employees—that the employer has violated the Labor Code.” (Id.
at pp. 386–387.) The court found “[r]epresentative actions under the PAGA,
8
unlike class action suits for damages, do not displace the bilateral arbitration
of private disputes between employers and employees over their respective
rights and obligations toward each other. Instead, they directly enforce the
state’s interest in penalizing and deterring employers who violate California's
labor laws.” (Id. at p. 387.)
Subsequent cases have held that an aggrieved employee’s predispute
agreement to arbitrate PAGA claims is unenforceable absent a showing the
state also consented to the agreement. (See Julian, supra, 17 Cal.App.5th at
pp. 869–872; Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th
439, 445–449; Tanguilig v. Bloomingdale's, Inc. (2016) 5 Cal.App.5th 665,
677–680.) Each of these cases relied on Iskanian’s reasoning that a PAGA
claim is a representative or qui tam-type action, and that the state is the real
party in interest in the suit. (Julian, at pp. 871–872; Betancourt, at pp. 448–
449; Tanguilig, at pp. 677–680.) Here, the state (i.e., LWDA) did not agree to
arbitrate any part of Provost’s PAGA action, including the misclassification
claim arising under section 226.8, and/or whether under the TSA he was an
independent contractor or employee of company.
C. Case Law Prohibits the Splitting of a Single Representative PAGA
Action into “Individual” Arbitrable and Representative Nonarbitrable
Components in Deciding whether an Individual Has Standing under PAGA
Also relying on Iskanian, there is a long line of cases holding that a
plaintiff’s single-count PAGA action, such as in the instant case, “cannot be
split into an arbitrable ‘individual claim’ and a nonarbitrable representative
claim.” (See e.g., Williams v. Superior Court (2015) 237 Cal.App.4th 642, 649
(Williams). In Williams, the petitioner filed a single cause of action under
PAGA, alleging real party in interest Pinkerton violated various provisions of
the Labor Code. Pinkerton in response moved to enforce the petitioner’s
predispute waiver of his right to assert a PAGA claim; or alternatively, for an
9
order staying that claim but requiring the petitioner’s “individual claim” for
Labor Code violations to be arbitrated pursuant to the parties’ written
arbitration agreement. (Id. at pp. 644–645.) Following Iskanian, the trial
court refused to enforce the waiver, but granted Pinkerton alternative relief.
In granting the petitioner’s writ of mandate, the Williams court found
the trial court had correctly ruled that the predispute waiver of a right to
assert a representative PAGA action in any forum was unenforceable. (See
Williams, supra, 237 Cal.4th at p. 645, citing Iskanian, supra, 59 Cal.4th at
p. 384.) However, as particularly germane here, the Williams court found the
trial court erred in granting Pinkerton alternative relief, concluding the
petitioner’s PAGA claim could not be divided into arbitrable (i.e., the
underlying Labor Code violations) and nonarbitrable (i.e., the PAGA action
itself) components. (Williams, 237 Cal.App.4th at p. 645.)
In reaching its decision, the Williams court first rejected Pinkerton’s
argument that Iskanian was inapplicable because the petitioner in Williams,
not unlike Provost in the instant case, had the opportunity to “opt out of the
representative action waiver without adverse consequences.” (Williams,
supra, 237 Cal.App.4th at pp. 647–648.) The court found this same argument
had been raised and properly rejected by another court. (Ibid., citing
Securitas Security Services USA, Inc. v. Superior Court (2015) 234
Cal.App.4th 1109) (Securitas) [noting “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,” as a
“PAGA claim provides a remedy inuring to the state . . . and the law . . .
10
broadly precludes private agreements to waive such rights”]; see Juarez v.
Wash Depot Holdings, Inc. (2018) 24 Cal.App.5th 1197, 1203 [following
Securitas in refusing to enforce a predispute waiver of a representative PAGA
claim merely because the employee had the opportunity to opt out of such a
waiver]; see also Civ. Code, § 1668 [“[a]ll contracts which have for their
object, directly or indirectly, to exempt anyone from responsibility
for . . . violation of law, whether willful or negligent are against the policy of
the law”].) Thus, Williams concluded the petitioner could not voluntarily
waive the advantages of a law intended solely for his benefit, if doing so
would contravene public policy. (Williams, at p. 648.)
The Williams court next addressed whether the petitioner was required
to arbitrate the underlying controversy involving the alleged Labor Code
violations of Pinkerton for a determination whether he was an “aggrieved
employee” under section 2699, subdivisions (a) and (c) with standing to bring
a representative PAGA claim. (See Williams, supra, 237 Cal.App.4th at
p. 649.) In rejecting this argument, as noted, the Williams court found that,
“ ‘[b]ecause the PAGA claim is not an individual claim, it was not within the
scope of the [employer’s] request that individual claims be submitted to
arbitration’ [citation].” (Ibid.) Therefore, the court in Williams further found
the petitioner could not “be compelled to submit any portion of his
representative claim to arbitration, including whether he was an ‘aggrieved
employee’ ” within the meaning of section 2699, subdivisions (a) and (c).
(Williams, supra, at p. 649, italics added.)
Since being decided, a series of cases have followed Williams and its
holding that a single representative PAGA action is not divisible into
separate arbitrable “individual” and nonarbitrable representative
components in determining whether a plaintiff is an “aggrieved employee”
11
with standing to bring such an action. (See e.g., Jarboe v. Hanlees Auto
Group (2020) 53 Cal.App.5th 539, 557 [“Because a PAGA claim is
representative and does not belong to an employee individually, an employer
should not be able [to] dictate how and where the representative action
proceeds”]; Brooks v. AmeriHome Mortgage Company, LLC (2020) 47
Cal.App.5th 624, 629 [because the plaintiff brought a PAGA representative
claim, “he cannot be compelled to separately arbitrate whether he was an
aggrieved employee”]; Hernandez v. Ross Stores, Inc. (2016) 7 Cal.App.5th
171, 178 [“determination of whether the party bringing the PAGA action is
an aggrieved party . . . should not be decided separately by arbitration”];
Perez v. U-Haul Co. of California (2016) 3 Cal.App.5th 408, 421 (Perez)
[“California law prohibits the enforcement of an employment agreement
provision that requires an employee to individually arbitrate whether he or
she qualifies as an ‘aggrieved employee’ under the PAGA, and then (if
successful) to litigate the remainder of the ‘representative action in the
superior court’ ”].)
Moreover, just recently our high court in Kim v. Reins International
California, Inc. (2020) 9 Cal.5th 73 (Kim), approvingly cited to Williams in
holding that the plaintiff remained an “aggrieved employee” with standing to
sue under PAGA despite settling his individual claims for labor code
violations. (Id. at p. 81.) The Kim court also cited with approval cases,
including Perez, in which “[a]ppellate courts have rejected efforts to split
PAGA claims into individual and representative components.” (Kim, at p. 88,
citing Perez, supra, 3 Cal.App.5th at pp. 420–421.) The court in Kim added,
“Standing for these PAGA-only cases cannot be dependent on the
maintenance of an individual claim because individual relief has not been
sought.” (Kim, at p. 88.)
12
Williams and its progeny, which were recently cited with approval in
Kim for the proposition that a PAGA-only claim cannot be divided into
individual and representative components, firmly reject the contention that
the issue of a plaintiff’s status as an “aggrieved employee” must first be
arbitrated before he or she has standing to pursue such a claim.
D. Standard of Review
The standard of review applicable to the denial of a petition to compel
arbitration is determined by the issues raised by the parties on appeal.
(Julian, supra, 17 Cal.App.5th at p. 864.) “To the extent the denial relies on
a pertinent factual finding, we review that finding for the existence of
substantial evidence. [Citation.] In contrast, to the extent the denial relies
on a determination of law, we review the trial court’s resolution of that
determination de novo. [Citation.] Nonetheless, we are not bound by the
trial court’s rationale, and thus may affirm the denial on any correct legal
theory supported by the record, even if the theory was not invoked by the
trial court. [Citations].” (Ibid.)
Here, we apply a de novo standard of review because the denial of
arbitration of the “individual” claim—whether Provost is an independent
contractor or an “aggrieved employee,” with standing under section 2699,
subdivisions (a) and (c)—rests on a determination of the law. (See Zakaryan
v. The Men’s Wearhouse, Inc. (2019) 33 Cal.App.5th 659, 667 [“arbitrability of
a portion of a PAGA claim presents a legal question that lies at the
intersection of California labor law and arbitration law”], overruled on
another ground as stated in ZB, N.A., supra, 8 Cal.5th at p. 197, fn. 8; see
also Nieto v. Fresno Beverage Co., Inc. (2019) 33 Cal.App.5th 274, 279 [if a
trial court resolves a question of law, its legal conclusion is subject to this
court’s independent review].)
13
E. Analysis
As noted, YourMechanic contends an arbitrator must first decide
whether Provost is an independent contractor, as company contends, or is an
employee of YourMechanic, as Provost contends. YourMechanic further
contends that, until this threshold issue is resolved in arbitration, Provost
has no standing to pursue a representative PAGA action because he cannot
show he is an “aggrieved employee” for purposes of section 2699, subdivisions
(a) and (c). In making this contention, YourMechanic relies on the
arbitration provision in the TSA, including language requiring the parties to
arbitrate any “private dispute[] arising out of or related to [Provost’s]
relationship with the Company.”
We find YourMechanic’s contention unavailing.
Indeed, to accept YourMechanic’s contention would require us to ignore
Williams and its progeny, summarized ante. These cases consistently, and,
in our view, properly hold that threshold issues involving whether a plaintiff
is an “aggrieved employee” for purposes of a representative PAGA-only action
cannot be split into individual arbitrable and representative nonarbitrable
components. (See Williams, supra, 237 Cal.App.4th at p. 649 and its
progeny.) We conclude YourMechanic’s contention in this case in support of
arbitration falls within the ambit of these cases.
Our decision is further compelled by Kim. Although Kim, as noted,
addressed a slightly different issue than the one pending before us, the court
there cited with approval cases, including Perez, which have rejected efforts
to split a PAGA-only action into individual and representative components.
(See Kim, supra, 9 Cal.5th at p. 88.) The Kim court noted standing in such
actions cannot be dependent on the maintenance of an individual claim
because there is no claim for individual relief. (See ibid.)
14
In addition, Kim recognized there were certain penalty provisions in
the Labor Code where no private right of action existed. It noted one such
provision was section 226.8, at issue in the instant case. (See Kim, supra, 9
Cal.5th at p. 89, citing Noe v. Superior Court (2015) 237 Cal.App.4th 316,
337–341 (Noe) [employees misclassified as independent contractors cannot
sue for relief directly under section 226.8].)
In rejecting the defendant’s claim that PAGA standing required a
plaintiff to have an “unredressed injury” (Kim, supra, 9 Cal.5th at p. 89), the
Kim court noted such an argument would not take into consideration Labor
Code violations where there was no private right to sue, reasoning: “But
plaintiffs cannot address a claimed injury by private suit unless the statute
permits it. The concept of injury is especially inapposite in this context.
Requiring the existence of an unredressed injury to support standing would
be problematic for PAGA suits to enforce the many Labor Code statutes that
do not create a private right to sue. Indeed, the very reason the Legislature
enacted PAGA was to enhance enforcement of provisions punishable only
through government-initiated proceedings. [Citations.]” (Kim, at p. 89.)
As noted, Provost’s PAGA-only action against YourMechanic includes
allegations that company “willful[ly] misclassified” Provost and other
similarly situated “aggrieved employees” in violation of section 226.8,
subdivision (a). Provost, however, has no private right of action against
YourMechanic to pursue this alleged Labor Code violation. (See Kim, supra,
9 Cal.5th at p. 89; Noe, supra, 237 Cal.App.4th at pp. 337–341.) Therefore,
the only recourse available to Provost in pursuing such an alleged violation
under this particular statute is through PAGA. (See Kim, at p. 89; Noe, at
pp. 337–341.)
15
It would defy logic to require Provost to arbitrate the issue of whether
he was an independent contractor or employee for purposes of section 226.8,
when he and others similarly situated to him are only able to obtain any
relief under this statute in a nonarbitrable PAGA action. This contradiction
highlights the flaw in YourMechanic’s formulation of standing in support of
its motion. YourMechanic’s reasoning would also “harm the state's interests
in enforcing the Labor Code and in receiving the proceeds of civil penalties
used to deter violations," particularly for violations in which there is no
private right of action. (Iskanian, supra, 59 Cal.4th at p. 383; see Kim, supra,
9 Cal.5th at p. 89.)5
Perhaps in anticipation of our conclusion, YourMechanic also contends
that Iskanian has been implicitly overruled by the recent United States
Supreme Court decision of Epic Systems Corp. v. Lewis (2018) __ U.S.__, 138
S.Ct. 1612 (Epic). We rejected this identical contention in Correia v. NB
Baker Electric, Inc. (2019) 32 Cal.App.5th 602 (Correia).
We reaffirm here our analysis and decision in Correia that Epic did not
overrule Iskanian. In Correia, we observed: “Iskanian held a ban on
bringing PAGA actions in any forum violates public policy and that this rule
is not preempted by the FAA because the claim is a governmental claim.
[Citation.] Epic did not consider this issue and thus did not decide
the same question differently. [Citation.] Epic addressed a different issue
pertaining to the enforceability of an individualized arbitration requirement
against challenges that such enforcement violated” the National Labor
Relations Act. (Correia, supra, 32 Cal.App.5th at pp. 619–620.)
5 We are not called upon to decide in this case whether Provost was an
independent contractor or an employee of YourMechanic, or whether
company willfully misclassified him and others similarly situated as such
under section 226.8. We therefore offer no opinion on these issues.
16
Moreover, more than a year after Epic was decided, our high court
reaffirmed Iskanian in ZB, N.A. Throughout the opinion, ZB., N.A. freely
cited Iskanian with approval, including as follows: “In Iskanian, we declared
unenforceable as a matter of state law an employee’s predispute agreement
waiving the right to bring these representative PAGA claims. Requiring
employees to forgo PAGA claims in this way contravenes public policy by
‘serv[ing] to disable,’ through private agreement, one of the state’s ‘primary
mechanisms’ for enforcing the Labor Code. [Citation.] We then concluded
the FAA did not preempt this rule or otherwise require enforcement of such a
waiver in an arbitration agreement.” (ZB, N.A., supra, 8 Cal.5th at p. 185.)
ZB, N.A. added, “Iskanian established an important principle: employers
cannot compel employees to waive their right to enforce the state’s interests
when the PAGA has empowered employees to do so.” (Id. at p. 197.)
And, as we have noted, just recently our high court in Kim not only
reaffirmed Iskanian and ZB, N.A., but also many of the cases we have cited
in this decision, including among others Williams and Perez. Because we
reaffirm our conclusion that Iskanian has not been overruled, we are bound
to follow it. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d
450, 455 [decisions of our high court “are binding upon and must be followed
by all the state courts of California”]; see also Correia, supra, 32 Cal.App.5th
at p. 619.)
17
DISPOSITION
The order denying YourMechanic’s motion to compel arbitration is
affirmed. Provost to recover his costs of appeal.
BENKE, Acting P. J.
WE CONCUR:
AARON, J.
DATO, J.
18