Zamora v. Overhill Farms CA2/5

Filed 3/29/21 Zamora v. Overhill Farms CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
MARLEN A. BELTRAN B302764
ZAMORA,
(Los Angeles County
Plaintiff and Super. Ct. No. 19STCV10854)
Respondent,
v.
OVERHILL FARMS, INC.,
Defendant and
Appellant.
APPEAL from an order of the Superior Court of Los
Angeles County, Elihu M. Berle, Judge. Affirmed.
Troutman Sanders, Mark J. Payne, Misha Tseytlin, for
Defendant and Appellant.
Matern Law Group, Matthew J. Matern, Launa
Adolph, Max Sloves, Shooka Dadashzadeh, for Plaintiff and
Respondent.
__________________________
Defendant and appellant Overhill Farms, Inc. appeals
from an order denying its motion to compel arbitration of
claims brought by plaintiff and respondent Marlen A.
Beltran Zamora. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Zamora was an Overhill employee and a member of the
United Food and Commercial Workers, Local 770 (Union)
between 2008 and 2019. Zamora’s employment was subject
to two consecutive and substantially similar collective
bargaining agreements between the Union and Overhill, the
first running from 2014 to 2017 and the second from 2018 to
2021 (collectively the CBA).1
Article 8 of the CBA is titled “GRIEVANCE AND
ARBITRATION PROCEDURE.” It defines the term
“grievance” as “any dispute between [Overhill] and either
[the] Union or any employee concerning the interpretation,
1 The relevant CBA with the Union covered the period
from September 22, 2014, to September 22, 2017. The
subsequent CBA, which covered the period from September
1, 2018, to August 31, 2021, is the same in all material
respects.
2
application, or enforcement of this Agreement.” Under the
section heading “Arbitrability,” the agreement states: “The
arbitration procedure herein provided shall extend only to
those issues which are arbitrable under this Agreement. In
order for a grievance to be arbitrable . . . it must genuinely
involve the interpretation, application, or enforcement of a
specified provision or provisions of this Agreement; . . . it
must not rest on any alleged understanding, practice, or
other matter outside the scope of this Agreement; [and] it
must not require the arbitrator, in order to rule in favor of
the grievance, to exceed the scope of the arbitrator’s
jurisdiction under this Agreement . . . .” Another section
states “The arbitrator’s jurisdiction to make an award shall
be limited by the arbitration submission agreement, or as
otherwise herein expressly provided, and confined to the
interpretation, application, or enforcement of the provisions
of this Agreement.”
Article 10, titled “MANAGEMENT RIGHTS,” specifies
that except as limited by the CBA, Overhill retains the right
to manage its business, including but not limited to “the
right to hire and direct its employees, to determine the times
and hours of operations, . . . to schedule and change working
hours, shifts, and days off, . . . and to discipline, suspend,
and terminate employees for just cause.”
Articles 11 and 12, titled “HOURS OF WORK” and
“OVERTIME,” respectively, contain detailed provisions for
hours of work, meal and rest breaks, and overtime.
“Employees who claim they were not given the opportunity
3
to take the rest breaks or meal periods described [in the
CBA] must notify the Employer in writing within two (2)
business days and cannot file a grievance or make a claim of
any kind if they have not done so.” Overhill “will pay
overtime premiums only as required by California and
federal law.” No specific statutes are identified, nor are any
remedies for violations.
Article 15, titled “TOOLS AND EQUIPMENT,” states
that Overhill “shall supply all necessary tools, equipment,
and supplies needed in the performance of work, including
uniforms if required.” In some circumstances, Overhill
“shall reimburse Employees for the purchase of the required
safety shoes . . . .” The article does not reference the
grievance procedure or any statutes.
Article 30, titled “WAGES,” includes a detailed
description of wages, including wage premiums for specified
departments, bonuses, and pay caps based on job
classification. The article does not reference the grievance
procedure or any statutes.
Article 31 is titled “COMPLIANCE WITH
APPLICABLE LAWS” and states in its entirety, “The
Company agrees to use its best efforts to comply fully with
California law and United States immigration, social
security, and income tax laws with respect to its Employees.”
Article 32, titled “COMPLETE AGREEMENT” states that
the CBA “constitutes the complete, sole and entire
agreement between the parties” and it can only be altered or
amended by a signed, written agreement.
4
In March 2019, Zamora filed a class action against
Overhill, alleging violations of the California Labor Code2
and Industrial Welfare Commission Wage Order No. 5-2001,
including meal and rest break violations, minimum wage
and overtime violations, failure to pay all wages due, failure
to provide accurate wage statements, and failure to
reimburse business expenses. Zamora also asserted a claim
under the California Unfair Competition Law (UCL) and
sought civil penalties under the Labor Code Private
Attorneys General Act of 2004 (PAGA).
Overhill removed the case to federal court, asserting
preemption under section 301(a) of the Labor Management
Relations Management Act3 on the grounds that Zamora’s
claims required interpretation of the CBA. On Zamora’s
motion, the federal court remanded Zamora’s case to
superior court, reasoning that her claims were grounded in
application of state law, and that any interpretation of the
CBA was merely incidental.
2 All further statutory references are to the Labor
Code, unless otherwise stated.
3 “Title 29 United States Code section 185(a) codifies
section 301(a) of the Labor Management Relations Act.
(Pub.L. No. 101 (June 23, 1947) 61 Stat. 156.) Courts
typically refer to the statutory provisions at issue as ‘section
301(a)’ rather than by citation to the United States Code.”
(Knutsson v. KTLA, LLC (2014) 228 Cal.App.4th 1118, 1126.)
5
After the case returned to superior court, Overhill
moved to compel arbitration, arguing the CBA required
arbitration of Zamora’s claims. The court denied Overhill’s
motion in an oral ruling after hearing. The court reasoned
that while there is usually a presumption favoring
arbitration, because the contract in question here is a CBA,
the presumption does not apply to the alleged statutory
violations. In these circumstances, a CBA would not be
deemed to waive an employee’s right to pursue statutory
claims in a judicial forum unless that waiver is clear and
unmistakable, as explained in Wright v. Universal Maritime
Service Corp. (1998) 525 U.S. 70, 79 (Wright) and Vasserman
v. Henry Mayo Newhall Memorial Hospital (2017) 8
Cal.App.5th 236, 244 (Vasserman). The trial court found no
such clear and unmistakable waiver of plaintiff’s statutory
claims, and so denied Overhill’s motion to compel
arbitration.
Overhill filed a timely notice of appeal.
DISCUSSION
A. Governing Principles
“We review an order denying a petition to compel
arbitration for abuse of discretion unless a pure question of
law is presented, in which case we review the order de novo.”
(Vasserman, supra, 8 Cal.App.5th at p. 244.) “A petition to
compel arbitration should be granted if the court determines
6
that an agreement to arbitrate the controversy exists. (Code
Civ. Proc., § 1281.2.) Fundamental to this inquiry is
whether the parties have agreed to arbitrate their dispute.
(See American Express Co. v. Italian Colors Restaurant
(2013) 570 U.S. 228, 233 [it is “overarching principle that
arbitration is a matter of contract”]; [citations].)” (Cortez v.
Doty Bros. Equipment Co. (2017) 15 Cal.App.5th 1, 11
(Cortez).)
“A union representative may agree on an employee’s
behalf as part of the collective bargaining process to require
the employee to arbitrate controversies relating to an
interpretation or enforcement of a CBA. (14 Penn Plaza LLC
v. Pyett (2009) 556 U.S. 247, 256–257 (Penn Plaza)
[‘“arbitration of labor disputes under collective bargaining
agreements is part and parcel of the collective bargaining
process itself”’]; Wright[, supra,] 525 U.S. [at p.] 79.) In fact,
when a CBA includes an arbitration provision, contractual
matters under a CBA are presumed arbitrable; that is,
arbitration must be granted as long as the CBA is
reasonably susceptible to an interpretation in favor of
arbitration. (Wright, supra, 525 U.S. at pp. 78–79.)” (Cortez,
supra, 15 Cal.App.5th at pp. 11–12, italics added.)
“However, the presumption of arbitration in a CBA does not
apply to statutory violations. (Wright, supra, 525 U.S. at
pp. 78–79 . . . .) . . . [T]he United States Supreme Court has
made clear that waiver of the right to prosecute a statutory
violation in a judicial forum is only effective if it is explicit,
7
‘“clear and unmistakable”’ [citations.]” (Cortez, supra, 15
Cal.App.5th at p. 12.)
“[I]n determining whether there has been a sufficiently
explicit waiver, courts look to the generality of the
arbitration clause, explicit incorporation of statutory
requirements, and the inclusion of specific contractual
provisions.” (Vasserman, supra, 8 Cal.App.5th at p. 246,
citing Vasquez v. Superior Court (2000) 80 Cal.App.4th 430,
434 (Vasquez).) A waiver in a CBA is sufficiently clear if it is
found in an explicit arbitration clause. (Carson v. Giant
Food, Inc. (4th Cir. 1999) 175 F.3d 325, 331.) “‘“Under this
approach, the [CBA] must contain a clear and unmistakable
provision under which the employees agree to submit to
arbitration all [state and federal statutory] causes of action
arising out of their employment.” [Citation.]’ [Citation.]”
(Vasserman, supra, 8 Cal.App.5th at pp. 246–247.)
“A waiver in a [CBA] may also be sufficiently clear if
broad, nonspecific language in the arbitration clause is
coupled with ‘an “explicit incorporation of statutory . . .
requirements” elsewhere in the contract. [Citation.] If
another provision, like a nondiscrimination clause, makes it
unmistakably clear that the discrimination statutes at issue
are part of the agreement, employees will be bound to
arbitrate their [state and federal statutory] claims.’
[Citation.]” (Vasquez, supra, 80 Cal.App.4th at p. 435,
fn. omitted.)
8
B. Clear and unmistakable standard applies to the
pleaded statutory claims
Overhill urges this court to depart from established
California appellate decisions and hold instead that the clear
and unmistakable standard is limited to cases where a union
employee seeks to pursue statutory discrimination claims in
a judicial forum, and that for all other statutory claims, the
CBA is subject to the usual liberal construction in favor of
arbitration. Overhill emphasizes that the two key U.S.
Supreme Court’s decisions in this area, Wright and Penn
Plaza, both involved statutory discrimination claims, and
absent language expressly making the clear and
unmistakable standard applicable to other, non-
discrimination related statutory claims, such a broad
interpretation is unwarranted. The plaintiffs in Wright and
Penn Plaza did bring claims of statutory discrimination, and
neither case involved statutory wage and hour, or other
economic claims. (Penn Plaza, supra, 556 U.S. at pp. 253–
254 [age discrimination]; Wright, supra, 525 U.S. at p. 75
[disability discrimination].) But we are not persuaded by
Overhill’s efforts to limit the requirement of a clear and
unmistakable waiver solely to claims of statutory
discrimination. Rather, we agree with and follow the
approach taken by the California courts, requiring a CBA to
include a clear and unmistakable agreement to waive the
right to enforce other statutory protections—including those
prohibiting the kinds of economic conduct alleged here—in a
9
judicial forum.4 (See, e.g., Cortez, supra, 15 Cal.App.5th at
pp. 11–12 [waiver of the right to prosecute a statutory claim
alleging wage and hour violations must be clear and
unmistakable]; Vasserman, supra, 8 Cal.App.5th at p. 245
[claims alleging statutory violations relating to meal and
rest breaks, unpaid wages, and unpaid overtime not subject
to a presumption of arbitrability and waiver of right to
pursue statutory claims in a judicial forum must be clear
and unmistakable]; Volpei v. County of Ventura (2013) 221
Cal.App.4th 391, 394 [clear and unmistakable waiver
required for statutory discrimination and retaliation claims];
Choate v Celite Corp. (2013) 215 Cal.App.4th 1460, 1465
(Choate) [a CBA “validly waives a union member’s right to
litigate federal or state claims (including for immediate
payment upon termination for vested vacation time) in a
judicial forum only if the waiver is clear and
unmistakable”].)5
4 The conclusion we reach does not disturb California
law that “strongly favors” arbitration. (OTO, LLC v. Kho
(2019) 8 Cal.5th 111, 125.) In the collective bargaining
context, frequently involving sophisticated, repeat players on
both sides, the clear and unmistakable rule has no bias for or
against arbitration; it merely sets the framework in which
negotiations will proceed.
5 Overhill’s criticisms of Vasquez are not well taken,
primarily because they are based on a misquoting and
mischaracterization of the opinion’s language. In its
appellant’s opening brief, Overhill boldly asserts: “This
10
C. No clear and unmistakable waiver
Overhill contends that, even applying the clear and
unmistakable waiver standard, arbitration is still required
here because the CBA makes statutory compliance a
contractual commitment subject to the arbitration clause.6
Specifically, Overhill asserts that the CBA at issue includes
Court’s mistaken path began with Vasquez, which was a
discrimination case and should have been decided on that
limited basis under Wright . . . . Vasquez began with its
framing of the question at issue as ‘whether a union can
waive employees’ rights to a judicial forum for statutory
claims.’ (Vasquez, supra, 80 Cal.App.4th at [p.] 432
[emphases added].)” The very basis for Overhill’s argument
(that our opinion in Vasquez should have limited itself to
statutory discrimination claims, not all statutory claims)
depends on an incorrect quote of the opinion. The correct
language states: “The question presented is whether
arbitration of these statutory discrimination claims is
required under the CBA and, if so, whether a union may
waive its members’ rights to a judicial forum for statutory
discrimination claims.” (Vasquez, supra, 80 Cal.App.4th at
p. 432.)
6 Overhill concedes that it cannot meet one of the two
alternative methods to establish statutory compliance as a
contractual commitment; the CBA at issue does not contain
a clear and unmistakable provision under which the
employees agree to submit to arbitration all state and
federal statutory causes of action arising out of their
employment.
11
“broad, nonspecific language in the arbitration clause” that
is “coupled with ‘an “explicit incorporation of [relevant]
statutory . . . requirements” elsewhere in the contract.’ . . .
[Citation.]” (Vasquez, supra, 80 Cal.App.4th at p. 435.)
The CBA at issue here, however, contains no express
contractual commitment to comply with any particular
statute, much less the specific statutes that Zamora invokes
in her lawsuit. “A simple agreement not to engage in acts
violative of a particular statute will not suffice; . . .
[c]ompliance with a particular statute must be an express
contractual commitment in the collective bargaining
agreement.” (Vasquez, supra, 80 Cal.App.4th at p. 435.)
Articles 11 and 12 govern hours of work, meal and rest
breaks, and overtime. Nowhere in those articles, or
anywhere in the CBA, do we find any contractual
commitment for compliance with a specific statute. Indeed,
Overhill does not point to a single sentence in the CBA that
obliges Overhill to comply with a particular California or
federal statute. “[D]iscussing a topic while at the same time
saying nothing about the statutory right at issue does not
effect a clear and unmistakable waiver of that right.”
(Choate, supra, 215 Cal.App.4th at p. 1467.) Instead,
Overhill points to descriptions given by the federal district
court and Zamora herself to argue that the CBA
incorporated the language of the Labor Code by reference.
We need not concern ourselves with such extraneous
evidence when the CBA contained an integration clause, and
the express terms of the CBA do not meet the standard
12
articulated in Vasquez. (Tahoe National Bank v. Phillips
(1971) 4 Cal.3d 11, 23 [extrinsic evidence cannot be used to
create or alter obligations under an integrated contract].)
We therefore conclude that the CBA does not contain a clear
and unmistakable waiver of the right to pursue statutory
claims against Overhill in court.
D. Zamora’s overtime claims
Overhill contends that Zamora’s overtime claims are
not statutory claims, and therefore they are subject to
arbitration. The third cause of action in Zamora’s complaint
alleges that Overhill failed to pay Zamora and class
members overtime as required under section 5107 and 1194.
Overhill argues that the requirements of section 510 do not
apply because Overhill meets the exemption criteria set
forth in section 514. Section 514 provides that section 510
“do[es] not apply to an employee covered by a valid collective
bargaining agreement if the agreement expressly provides
7 Section 510, subdivision (a) states the overtime pay
requirements for “[a]ny work in excess of eight hours in one
workday and any work in excess of 40 hours in any one
workweek . . .” in addition to other specified circumstances.
Section 510, subdivision (a)(2) states “[t]he requirements of
this section do not apply to the payment of overtime
compensation to an employee working pursuant to . . . [a]n
alternative workweek schedule adopted pursuant to a
collective bargaining agreement pursuant to Section 514.”
13
for the wages, hours of work, and working conditions of the
employees, and if the agreement provides premium wage
rates for all overtime hours worked and a regular hourly rate
of pay for those employees of not less than 30 percent more
than the state minimum wage.” (Italics added.) According to
Overhill, because the CBA identifies a “pay cap” (which we
understand to mean a maximum hourly pay rate) for certain
job classifications that is higher than state minimum wage
for the time period covered by the first CBA (between 2014
and 2018), some employees would meet the criteria of section
514 and thus be exempt from the requirements of section
510. This argument suffers from one key flaw. Nowhere in
its motion to compel arbitration does Overhill argue that
Zamora was paid at least 30 percent more than minimum
wage, or that section 514 precludes Zamora from pursuing a
statutory overtime claim. Because a class has yet to be
identified or certified, if there are employees who meet
section 514 criteria they can be excluded from the definition
of the class. Further, because Overhill did not present this
argument to the trial court, and offers no explanation for the
failure to do so, we deem the argument waived. “‘“Generally,
issues raised for the first time on appeal which were not
litigated in the trial court are waived. [Citations.]”’
[Citation.]” (Bank of America, N.A. v. Roberts (2013) 217
Cal.App.4th 1386, 1399.)
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E. Unconscionability
Because we conclude that the court correctly denied
Overhill’s motion to compel arbitration, we need not consider
whether the CBA was unconscionable.
DISPOSITION
The trial court’s November 14, 2019 order denying
defendant and appellant Overhill Farms, Inc.’s motion to
compel arbitration is affirmed. Costs on appeal are awarded
to plaintiff and respondent Marlen A. Beltran Zamora.
MOOR, J.
We concur:
BAKER, Acting P. J.
KIM, J.
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