Hunt v. Simplified Labor Staffing Solutions CA2/8

Filed 7/14/23 Hunt v. Simplified Labor Staffing Solutions CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.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 EIGHT
ANDRE HUNT, B319792
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 21STCV23795)
v.
SIMPLIFIED LABOR STAFFING
SOLUTIONS, INC.,
Defendant and Appellant.
APPEAL from an order of the Superior Court of Los
Angeles County, Stephanie M. Bowick, Judge. Reversed and
remanded with directions.
Hill Farrer & Burrill, E. Sean McLoughlin and Clayton J.
for Defendant and Appellant.
James R. Hawkins, Gregory Mauro, Mitchell J. Murray and
Michael Calvo for Plaintiff and Respondent.
_________________________
INTRODUCTION
Simplified Labor Staffing Solutions, Inc. (Simplified)
appeals an order denying its motion to compel arbitration of
Andre Hunt’s (Hunt) claim under the California Private
Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)
(PAGA).1 Simplified’s motion was based on Hunt’s predispute
agreement to arbitrate all claims arising from their employment
relationship.
On appeal, Hunt concedes that his claim for civil penalties
based on alleged Labor Code violations he personally suffered
(his “individual” PAGA claim) is subject to arbitration under
Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. ___ [213
L.Ed. 2d, 142 S.Ct. 1906] (Viking River), decided three months
after the trial court’s order denying the motion to compel
arbitration. We agree and reverse. We remand with directions to
enter an order compelling Hunt’s individual PAGA claim to
arbitration.
We further hold that the scope of the arbitration agreement
is to be determined by the arbitrator, in accordance with the
American Arbitration Association’s Employment Arbitration
Rules and Mediation Procedures, incorporated into the parties’
arbitration agreement. Specifically, the parties’ dispute about
whether non-individual PAGA claims are governed by the
arbitration agreement, in the same way individual PAGA claims
are, is an issue for the arbitrator to address. Accordingly, we
reverse with directions that the arbitrability of Hunt's non-
individual PAGA claims should be determined by the arbitrator.
1 Undesignated statutory references are to the Labor Code.
2
FACTUAL AND PROCEDURAL BACKGROUND
I. Background Information
Simplified operates as a workforce temporary staffing
agency, providing services to various businesses to meet their
staffing needs.
On May 14, 2020, Hunt was employed by Simplified as a
“non-exempt” employee. He was assigned by Simplified to
perform services at Yusen Logistics (Americas), Inc. (Yusen),
which operates as a transportation and logistics company.
Hunt’s last day of employment was sometime in late
October 2020.
II. Hunt’s Complaint2
On June 28, 2021, Hunt filed a complaint against
Simplified and Yusen, alleging a single PAGA claim “on behalf
[of] the general public and all non-exempt aggrieved employees,
acting on behalf of the California Attorney General as private
attorney general.” Hunt qualified his complaint as a
“representative” action. He alleged Simplified violated various
provisions of the Labor Code by implementing policies and
practices resulting in failure to pay wages (including overtime
and final pay), as well as failure to provide adequate meal
periods, rest breaks, and accurate itemized wage statements.
Hunt sought to recover civil penalties under PAGA for the alleged
violations.
III. Simplified’s Motion to Compel Arbitration
2 Before filing his complaint, Hunt complied with notice
requirements pursuant to section 2699.3 and sent a letter to the
California Labor and Workforce Development Agency (LWDA) on
April 22, 2021, apprising it of his alleged claims.
3
On September 27, 2021, Simplified moved to compel
arbitration of Hunt’s PAGA claim and to stay proceedings in the
trial court pending arbitration.
Simplified alleged it is “involved in interstate commerce”
within the meaning of the Federal Arbitration Act (FAA).3
Simplified “do[es] business in California and other States” and
has “numerous office locations in Southern California and also in
States other than California, including Texas, Nevada and South
Carolina.” Simplified “supplies labor and staffing to customers in
California and to customers who are based outside of California.”
On May 14, 2020, in connection with his employment by
Simplified, Hunt signed the “EMPLOYEE AGREEMENT TO
ARBITRATE (Arbitration Agreement) which required he submit
all claims and disputes related to his employment with Simplified
to binding arbitration. Simplified attached, as an exhibit, a copy
of the Arbitration Agreement. It provides in relevant part:
“I acknowledge that I have received and reviewed a copy of
the Company’s Mutual Arbitration Policy (‘MAP’) and . . . I
understand that the MAP is a condition of my employment. I
agree that it is my obligation . . . to submit to final and binding
arbitration any and all claims and disputes, whether they exist
now or arise in the future, that are related in any way to my
employment or the termination of my employment with the
3 The FAA stands as a congressional declaration of a liberal
policy favoring arbitration agreements, notwithstanding any
state substantive or procedural policies to the contrary. (Vaughn
v. Tesla, Inc. (2023) 87 Cal.App.5th 208, 232.) To ensure that
arbitration agreements are enforced according to their terms, the
FAA preempts state laws which require a judicial forum for the
resolution of claims which the contracting parties agreed to
resolve by arbitration. (Ibid.)
4
Company except as otherwise permitted by MAP. I understand
that final and binding arbitration will be the sole and exclusive
remedy for any such claim or dispute against the Company or
any affiliated companies or entities, . . . and that, by agreeing to
use arbitration to resolve my disputes, both the Company and I
agree to forego any right we each may have had to a jury trial on
issues covered by the MAP, and forego any right to bring claims
on a class or collective basis. I also agree that such arbitration
will be . . . conducted under the [FAA] and the applicable
procedural rules of the American Arbitration Association.”
(Italics added.)
Simplified also attached as an exhibit to its motion a copy
of its MAP. The MAP provides in relevant part:
Simplified “has adopted and implemented a new
arbitration policy, requiring mandatory, binding arbitration of all
disputes, for all employees, regardless of length of service.” The
MAP is a “mandatory condition of employment” and “will govern
any existing and all future disputes between you and the
Company that relate in any way to your employment.” The MAP
“covers all disputes relating to or arising out of or in connection
with employment . . . or the termination of that employment,
whether those disputes already exist today or arise in the future.”
The type of disputes or claims covered by the MAP include
but are not limited to “claims against employees for fraud,
conversion, misappropriation of trade secrets, or claims by
employees for wrongful termination of employment, breach of
contract, fraud, employment discrimination, harassment, or
retaliation under the Americans With Disabilities Act, the Age
Discrimination in Employment Act, the Fair Labor Standards
Act, Title VII of the Civil Rights Act of 1964 and its amendments,
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the California Fair Employment and Housing Act or any other
state or local anti-discrimination laws, tort claims, wage or
overtime claims or other claims under the Labor Code, or any
other legal or equitable claims and causes or action recognized by
local, state or federal law or regulations.” (Italics added.) The
MAP does not cover workers’ compensation claims,
unemployment insurance claims, or any claims that could be
made to the National Labor Relations Board.
The MAP further specifies: “Your decision to accept
employment or to continue employment with the Company
constitutes your agreement to be bound by the MAP. . . . This
mutual obligation to arbitrate claims means that both you and the
Company are bound to use the MAP as the only means of resolving
any employment-related disputes covered by the policy. . . . This
mutual agreement to arbitrate claims also means that both you
and the Company forego any right either may have to a jury trial
on claims relating in any way to your employment. Because the
arbitration proceeding will be a traditional, bilateral arbitration,
it also means that both you and the company forego and waive
any right to join or consolidate claims in arbitration with others
or to make collective or class claims in arbitration, either as a
representative or a member of a class, unless such procedures are
agreed to by both you and the Company.” (Italics added,
underscoring omitted.) The MAP “shall be governed solely by”
the FAA.
6
Simplified also provided a copy of the Employment
Arbitration Rules and Mediation Procedures of the American
Arbitration Association. It provides, in relevant part, under the
heading “Jurisdiction” that “[t]he arbitrator shall have the power
to rule on his or her own jurisdiction, including any objections
with respect to the existence, scope, or validity of the arbitration
agreement.” (Italics added.)
Following Hunt’s last day of employment, “[d]espite his
agreement to arbitrate, [Hunt] initiated a civil action against
Simplified and Yusen [with] claims required to be arbitrated
under [his] May 14, 2020 Arbitration Agreement.” Simplified
argued it is entitled under the FAA to an order directing Hunt to
proceed to arbitration in accordance with the terms of his
Arbitration Agreement. Simplified further argued it is entitled to
an order staying further proceedings in this action until
arbitration is completed.
On November 12, 2021, Hunt opposed the motion to compel
arbitration. Relying on Iskanian v. CLS Transportation Los
Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian), Hunt argued the
FAA does not apply to a PAGA action, which “is strictly a
representative action brought by a plaintiff merely as the ‘proxy’
of the State’s labor law enforcement agencies.” Hunt “is not
suing in his private capacity” but rather “on behalf of the state of
California pursuant to PAGA.” “[T]he fact [that Hunt] entered
into a predispute agreement to arbitrate . . . his employment
claims, does not apply in this instance because the state is not
bound by the MAP.” Hunt argued “no claims exist in this [action]
that permit[] [Simplified] to split [Hunt’s] PAGA claims into
arbitrable ‘individual claims’ and ‘non-arbitrable representative
claims.’ ”
7
On February 2, 2022, Simplified filed a brief in support of
its motion to compel arbitration. Simplified argued Hunt failed
to offer any evidence or declaration in support of his claim.
Simplified also argued that the Arbitration Agreement signed by
Hunt “covers the claims in his lawsuit” as the FAA “has been
applied to require arbitration of exactly the same types of Labor
Code violations alleged by Hunt.” Finally, Simplified argued an
“alternative basis for stay also exists” given that the United
States Supreme Court “recently granted a petition for writ of
certiorari” in Viking River, which will decide “the question of
whether the FAA requires bilateral arbitration of PAGA claims.”
Sandra Senbol (Senbol), the Vice President of Operations at
Simplified since 2016, submitted a declaration in support of
Simplified’s motion, that stated: Simplified “do[es] business in
California and other States” and “supplies labor and staffing to
customers in California and to customers who are based outside
of California.” Simplified has “office locations in Southern
California and also in States other than California, including
Washington and New Jersey.”
IV. Trial Court’s Ruling
On March 2, 2022, the hearing on Simplified’s motion to
compel arbitration and stay the action took place. Following oral
argument by the parties, the court denied Simplified’s request
that the court take the matter under submission and stay the
action pending a decision on the issue by the United States
Supreme Court in the Viking River case. The court then denied
Simplified’s motion and ordered Simplified to file an answer
within 30 days.
This appeal followed.
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DISCUSSION
Relying upon the Viking River decision, Simplified argues
the FAA applies to Hunt’s PAGA claim and preempts California’s
judicially created “State must consent” rule articulated by a
series of post-Iskanian appellate decisions barring enforcement of
an employee’s predispute agreement to arbitrate an “individual”
PAGA claim for civil penalties. Simplified contends the trial
court’s order cannot survive Viking River, and requests that we
reverse the trial court’s denial order and remand with
instructions that the trial court compel arbitration of Hunt’s
“individual” PAGA claim per the terms of the Arbitration
Agreement and the incorporated MAP.
Simplified further argues that because the terms of the
Arbitration Agreement and MAP “prohibit collective claims in
arbitration and because the parties expressly waived any joinder
or aggregation of claims, the arbitration proceeding ordered must
be an individualized one.” Simplified thus requests that further
judicial proceedings be stayed to await completion of the
arbitration proceeding and to not reach the issue of Hunt’s
representative/non-individual PAGA claim until after the
arbitration. Alternatively, Simplified requests we dismiss Hunt’s
non-individual claim.
I. Standard of Review
Where, as here, the trial court’s order denying a motion to
compel arbitration rests solely on a decision of law, we review
that decision de novo. (Seifu v. Lyft, Inc. (2023) 89 Cal.App.5th
1129, 1136 (Seifu); Gregg v. Uber Technologies, Inc. (2023)
89 Cal.App.5th 786, 794.)
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II. Applicable Law
A. PAGA
“California’s Labor Code contains a number of provisions
designed to protect the health, safety, and compensation of
workers. Employers who violate these statutes may be sued by
employees for damages or statutory penalties. [Citations.] . . .
Several Labor Code statutes provide for additional civil penalties,
generally paid to the state unless otherwise provided. [Citation.]
Before PAGA’s enactment, only the state could sue for civil
penalties.” (Kim v. Reins International California, Inc. (2020)
9 Cal.5th 73, 80 (Kim), citing Iskanian, supra, 59 Cal.4th at
p. 378.)
Before 2004, the LWDA was responsible for collecting civil
penalties for labor law violations. (Nickson v. Shemran, Inc.
(2023) 90 Cal.App.5th 121, 127 (Nickson).) The Legislature
found, however, that the LWDA lacked sufficient resources to
keep pace with the sheer number and gravity of offenses. (Ibid.)
As a solution, the Legislature enacted PAGA to empower
aggrieved employees to act as private attorneys general to
prosecute and recover civil penalties for Labor Code violations on
the State’s behalf. (§ 2699, subd. (a); Nickson, at p. 127; Seifu,
supra, 89 Cal.App.5th at p. 1137.) Although an aggrieved
employee is the named plaintiff in a PAGA action, an employee
suing under PAGA “ ‘does so as the proxy or agent of the state’s
labor law enforcement agencies.’ ” (Kim, supra, 9 Cal.5th at
p. 81, italics omitted; Seifu, at p. 1137.) Thus, “[e]very PAGA
claim is ‘a dispute between an employer and the state,’ ” and
“[r]elief under PAGA is designed primarily to benefit the general
public, not the party bringing the action.” (Kim, at p. 81.)
10
Two types of claims authorized by PAGA are “ ‘individual’
PAGA claims, which are based on Labor Code violations
sustained by the plaintiff, [and] ‘representative’ [or non-
individual] PAGA claims, which are based on Labor Code
violations involving employees other than the plaintiff.” (Galarsa
v. Dolgen California, LLC (2023) 88 Cal.App.5th 639, 647, italics
added.)
B. Iskanian Decision
In Iskanian, supra, 59 Cal.4th at p. 382, the California
Supreme Court held that “an employee’s right to bring a PAGA
action is unwaivable.” The court rejected the employer’s
argument that the arbitration agreement was enforceable
because it allowed an individual PAGA claim, barring only
“representative” (i.e., non-individual) PAGA claims, concluding
that “an arbitration 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, 384.) Iskanian also concluded the FAA did not preempt
state law in that respect, because the “FAA’s goal of promoting
arbitration as a means of private dispute resolution does not
preclude our Legislature from deputizing employees to prosecute
Labor Code violations on the state’s behalf.” (Id. at p. 360.)
C. Viking River Decision
On June 15, 2022, the United States Supreme Court
decided Viking River, addressing the extent to which the FAA
preempts the Iskanian rule barring PAGA waivers. Viking River
abrogated Iskanian in part and held that an employer could
enforce an agreement calling for arbitration of individual PAGA
11
claims. (Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at
pp. 1916–1917, 1924–1925].)
The Viking River court described the two rules adopted by
Iskanian. Iskanian’s “principal rule prohibits waivers of
‘representative’ PAGA claims . . . . That is, it prevents parties
from waiving representative standing to bring PAGA claims in a
judicial or arbitral forum.” (Viking River, supra, 596 U.S. at
p. ___ [142 S.Ct. at p. 1916], italics omitted.) Iskanian’s
“secondary rule . . . invalidates agreements to separately
arbitrate or litigate ‘individual PAGA claims for Labor Code
violations that an employee suffered,’ on the theory that resolving
victim-specific claims in separate arbitrations does not serve the
deterrent purpose of PAGA.” (Id. at pp. 1916–1917.)
The Viking River Court explained that PAGA claims are
“representative” in two ways. (Viking River, supra, 596 U.S. at
p. ___ [142 S.Ct. at p. 1916].) First, all PAGA claims are
“representative” because a plaintiff brings a PAGA claim as an
agent or proxy before the state. (Ibid.) Second, some PAGA
claims are “representative” because they are brought by
employees to address violations suffered by other employees as
well as themselves. (Ibid.) In light of this distinction, the
Supreme Court held that Iskanian’s “principal rule” prohibiting
“wholesale” waivers of an employee’s right to pursue a
“representative” PAGA claim on behalf of the state was not
preempted by the FAA. (Id. at pp. 1916–1917.) That is because
“the FAA does not require courts to enforce contractual waivers of
substantive rights and remedies.” (Id. at p. 1919.)
On the other hand, Viking River held Iskanian’s “secondary
rule,” prohibiting the separation of individual and non-individual
PAGA claims, was preempted by the FAA to the extent it
12
“invalidates agreements to arbitrate only ‘individual PAGA
claims for Labor Code violations that an employee suffered.’ ”
(Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at p. 1923].)
Iskanian’s “prohibition on contractual division of PAGA actions
into constituent claims unduly circumscribes the freedom of
parties to determine ‘the issues subject to arbitration’ and ‘the
rules by which they will arbitrate,’ [citation], and does so in a
way that violates the fundamental principle that ‘arbitration is a
matter of consent.’ ” (Ibid.) Accordingly, an arbitration
agreement compelling individual claims to arbitration was
enforceable as to the individual portion of a PAGA claim. (Id. at
p. 1925] [“Viking was entitled to enforce the agreement insofar as
it mandated arbitration of Moriana’s individual PAGA claim.”].)
Viking River stated the “conflict between PAGA’s
procedural structure and the FAA . . . derives from the statute’s
built-in mechanism of claim joinder,” which permits broad joinder
of the claims of other employees to the claim of the individual
plaintiff. (Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at
p. 1923].) “A state rule imposing an expansive rule of joinder in
the arbitral context would defeat the ability of parties to control
which claims are subject to arbitration. Such a rule would permit
parties to superadd new claims to the proceeding, regardless of
whether the agreement between them committed those claims to
arbitration. Requiring arbitration procedures to include a joinder
rule of that kind compels parties to either go along with an
arbitration in which the range of issues under consideration is
determined by coercion rather than consent, or else forgo
arbitration altogether. Either way, the parties are coerced into
giving up a right they enjoy under the FAA.” (Id. at p. 1924.)
13
Viking River continued, “When made compulsory by way of
Iskanian, the joinder rule internal to PAGA functions in exactly
this way. Under that rule, parties cannot agree to restrict the
scope of an arbitration to disputes arising out of a particular
‘ “ ‘transaction’ ” ’ or ‘ “common nucleus of facts.” ’ [Citation.] If
the parties agree to arbitrate ‘individual’ PAGA claims based on
personally sustained violations, Iskanian allows the aggrieved
employee to abrogate the agreement after the fact and demand
either judicial proceedings or an arbitral proceeding that exceeds
the scope jointly intended by the parties. The only way for
parties to agree to arbitrate one of an employee’s PAGA claims is
to also ‘agree’ to arbitrate all other PAGA claims in the same
arbitral proceeding.” (Viking River, supra, 596 U.S. at p. ___
[142 S.Ct. at p. 1924].) For these reasons, Viking River held “the
FAA preempts the rule of Iskanian insofar as it precludes
division of PAGA actions into individual and non-individual
claims through an agreement to arbitrate.” (Ibid.)
Finally, the Viking River decision concluded the
representative/“non-individual” claim had to be dismissed
because the plaintiff no longer had standing to assert the claim.
(Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at p. 1925].)
The court reasoned, “PAGA provides no mechanism to enable a
court to adjudicate non-individual PAGA claims once an
individual claim has been committed to a separate proceeding.
Under PAGA’s standing requirement, a plaintiff can maintain
non-individual PAGA claims in an action only by virtue of also
maintaining an individual claim in that action.” (Ibid.) The
Court continued, “When an employee’s own dispute is pared away
from a PAGA action, the employee is no different from a member
of the general public, and PAGA does not allow such persons to
14
maintain suit. [Citation.] As a result, [the plaintiff] lacks
statutory standing to continue to maintain her non-individual
claims in court, and the correct course is to dismiss her
remaining claims.” (Ibid.)
Regarding this final point, Justice Sotomayor observed in a
concurrence that, “if this Court’s understanding of state law is
wrong, California courts, in an appropriate case, will have the
last word. Alternatively, if this Court’s understanding is right,
the California Legislature is free to modify the scope of statutory
standing under PAGA within state and federal constitutional
limits.” (Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at
p. 1926].) This issue is presently pending before the California
Supreme Court in Adolph v. Uber Technologies, Inc., review
granted July 20, 2022, S274671.
III. Analysis
Preliminarily, we briefly address Hunt’s argument—raised
for the first time on appeal—that Simplified “did not demonstrate
that the Arbitration Agreement involves interstate commerce”
and as such, does not support a finding that the FAA governs the
Arbitration Agreement. As a general rule, issues not raised in
the trial court cannot be raised for the first time on appeal.
(Johnson v. Greenelsh (2009) 47 Cal.4th 598, 603.) Simplified
relies on this general rule in urging us not to consider Hunt’s
argument that Simplified failed to show the FAA applied to the
Arbitration Agreement.
The general rule against new issues is subject to an
exception that grants appellate courts the discretion to address
questions not raised in the trial court when the theory presented
for the first time on appeal involves only a legal question
15
determinable from facts that are (1) uncontroverted in the record
and (2) could not have been altered by the presentation of
additional evidence. (County of Kern v. T.C.E.F., Inc. (2016)
246 Cal.App.4th 301, 326; Redevelopment Agency v. City of
Berkeley (1978) 80 Cal.App.3d 158, 167.)
We conclude the exception to the general rule does not
apply to the new argument raised on appeal by Hunt. First, the
claim that Simplified failed to make a showing that the FAA
applied could have been addressed if it had been raised in the
trial court because such a showing involves the presentation of
evidence. Second, Simplified’s motion to compel arbitration
expressly alleged it is “involved in interstate commerce” within
the meaning of the FAA and explained it “do[es] business in,” has
“numerous office locations in,” and “supplies labor and staffing to
customers in” California and in other states. The record provided
us includes the declaration of Senbol, the Vice President of
Operations at Simplified, who stated: Simplified “do[es] business
in California and other States” and “supplies labor and staffing to
customers in California and to customers who are based outside
of California.” Simplified has “office locations in Southern
California and also in States other than California, including
Washington and New Jersey.” The record also includes a copy of
the Arbitration Agreement which provides that Hunt “agree[s]
that such arbitration will be . . . conducted under the [FAA]” and
a copy of the MAP which specifies the MAP “shall be governed
solely by” the FAA. The foregoing constitutes adequate evidence
in support of our decision not to consider Hunt’s newly raised
claim.
16
A. Individual Claim
Simplified argues that Viking River’s “definitive
interpretation of the FAA requires this Court to enforce the
parties’ agreement to resolve Hunt’s disputes in individual
arbitration.” Hunt concedes in his brief that in light of Viking
River, Hunt’s individual PAGA claim “should be compelled to
arbitration.”
We agree and reverse the trial court’s order as to Hunt’s
individual PAGA claim given the Viking River decision.
The type of disputes or claims that Hunt agreed to
arbitrate include individual PAGA civil penalty claims. The
MAP, incorporated into the Arbitration Agreement, expressly
provided “wage or overtime claims or other claims under the
Labor Code” shall be arbitrated.
In addition, the Arbitration Agreement specifies that Hunt
and Simplified “forego any right to bring claims on a class or
collective basis.” (Italics added.) The MAP explicitly provides
that “[b]ecause the arbitration proceeding will be a traditional,
bilateral arbitration, it also means that both you and the
Company forego and waive any right to join or consolidate claims
in arbitration with others or to make collective or class claims in
arbitration, either as a representative or a member of a class . . . .”
(Italics added.)
As is apparent, the terms include the waiver of the right to
bring a representative PAGA action. It does not involve a waiver
of the right to bring an individual PAGA action. Under Iskanian,
“where, as here, an employment agreement compels the waiver of
representative claims under the PAGA, it is contrary to public
policy and unenforceable as a matter of state law.” (Iskanian,
supra, 59 Cal.4th at p. 384.) Under Viking River, however, where
17
a predispute agreement provides for arbitrating only individual
(not representative) PAGA claims, that portion of the action may
be compelled to arbitration. Thus, per Viking River, we reverse
the denial of the motion to compel arbitration as it relates to
Hunt’s individual PAGA civil penalty claims and enforce the
parties’ agreement to resolve the individual PAGA claims via
arbitration.
B. Representative/Non-Individual Claim
Simplified argues we need not reach the issue of the
remaining representative/non-individual claim and should stay
further judicial proceedings until the arbitration is first
concluded. In the alternative, Simplified argues that we apply
Viking River and order the dismissal of any non-individual PAGA
claims alleged by Hunt, because he agreed to pursue any claims
arising out of his employment exclusively via arbitration—not via
court action—and because of Hunt’s “waive[r] [of] any right to
join or consolidate claims in arbitration with others or to make
collective or class claims in arbitration, either as a representative
or a member of a class.”
Hunt argues his “non-individual” PAGA claims should
remain in court, given that, under Kim, Hunt retains standing to
prosecute such claims, and further, that the parties did not agree
to arbitrate them.
We disagree with both parties.
The parties’ Arbitration Agreement incorporates the
Employment Arbitration Rules and Mediation Procedures of the
American Arbitration Association and provides that the parties
“agree that such arbitration will be . . . conducted under the . . .
applicable procedural rules of the American Arbitration
Association.” It provides, under the heading “Jurisdiction”: “The
18
arbitrator shall have the power to rule on his or her own
jurisdiction, including any objections with respect to the
existence, scope, or validity of the arbitration agreement.” (Italics
added.) This, we find, clearly provides that whether the
agreement to arbitrate extends to Hunt’s non-individual PAGA
claims is an issue that falls within the arbitrator’s
power/jurisdiction and should thus be determined by the
arbitrator. (See Nguyen v. Applied Medical Resources Corp.
(2016) 4 Cal.App.5th 232, 245 [arbitrability is determined by
arbitrator under AAA rules].) The parties’ dispute about whether
non-individual PAGA claims are governed by the arbitration
agreement, in the same way individual PAGA claims are, is an
issue for the arbitrator to address. Similarly, whether or not
Simplified’s request for a stay of judicial proceedings is
warranted is a question within the purview of the arbitrator.
Based on the foregoing, we remand with directions that,
when the case is ordered to arbitration, the scope of the claims
subject to arbitration be submitted for determination by the
arbitrator.
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DISPOSITION
The order denying Simplified’s motion to compel arbitration
is reversed and remanded with directions.
Because reversal is the result of an intervening change in
law, in the interests of justice, the parties shall bear their own
costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
STRATTON, P. J.
We concur:
GRIMES, J.
VIRAMONTES, J.
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