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This case was last updated from Los Angeles County Superior Courts on 06/02/2019 at 04:30:35 (UTC).

RYAN SHERMAN VS UBER TECHNOLOGIES INC ET AL

Case Summary

On 04/06/2017 RYAN SHERMAN filed a Labor - Other Labor lawsuit against UBER TECHNOLOGIES INC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are KENNETH R. FREEMAN and DANIEL S. MURPHY. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****6880

  • Filing Date:

    04/06/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Labor - Other Labor

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

KENNETH R. FREEMAN

DANIEL S. MURPHY

 

Party Details

Plaintiff and Petitioner

SHERMAN RYAN

Defendants and Respondents

RASIER-CA LLC

UBER TECHNOLOGIES INC

DOES 1-50

Attorney/Law Firm Details

Plaintiff and Petitioner Attorney

DIVERSITY LAW GROUP APC

Defendant and Respondent Attorney

LANE MOLLY M. ESQ.

 

Court Documents

NOTICE OF RULING

2/5/2018: NOTICE OF RULING

Minute Order

1/17/2018: Minute Order

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS' RENEWED MOTION TO STAY ACTION AND TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM

12/15/2017: MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS' RENEWED MOTION TO STAY ACTION AND TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM

DEFENDANTS UBER TECHNOLOGIES, INC. AND RASIER-CA, LLC'S NOTICE OF SPECIAL DEMURRER TO COMPLAINT

12/15/2017: DEFENDANTS UBER TECHNOLOGIES, INC. AND RASIER-CA, LLC'S NOTICE OF SPECIAL DEMURRER TO COMPLAINT

REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF DEFENDANTS' RENEWED MOTION TO STAY ACTION AND TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM; AND, IN SUPPORT OF SPECIAL DEMURRER

12/15/2017: REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF DEFENDANTS' RENEWED MOTION TO STAY ACTION AND TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM; AND, IN SUPPORT OF SPECIAL DEMURRER

NOTICE OF ENTRY OF ORDER

11/17/2017: NOTICE OF ENTRY OF ORDER

SUMMONS

4/6/2017: SUMMONS

Minute Order

4/14/2017: Minute Order

PROOF OF SERVICE OF SUMMONS

4/17/2017: PROOF OF SERVICE OF SUMMONS

NOTICE OF CASE MANAGEMENT CONFERENCE

4/21/2017: NOTICE OF CASE MANAGEMENT CONFERENCE

NOTICE OF CASE MANAGEMENT CONFERENCE

5/1/2017: NOTICE OF CASE MANAGEMENT CONFERENCE

REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF DEFENDANTS' MOTION TO STAY ACTION, OR IN THE ALTERNATIVE, TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM, AND SPECIAL DEMURRER TO COMPLAINT

5/25/2017: REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF DEFENDANTS' MOTION TO STAY ACTION, OR IN THE ALTERNATIVE, TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM, AND SPECIAL DEMURRER TO COMPLAINT

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS UBER TECHNOLOGIES, INC. AND RASIER-CA, LLC'S SPECIAL DEMURRER TO COMPLAINT

5/25/2017: MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS UBER TECHNOLOGIES, INC. AND RASIER-CA, LLC'S SPECIAL DEMURRER TO COMPLAINT

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS' MOTION TO STAY ACTION, OR IN THE ALTERNATIVE, TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM

5/25/2017: MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS' MOTION TO STAY ACTION, OR IN THE ALTERNATIVE, TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM

PROOF OF SERVICE

5/25/2017: PROOF OF SERVICE

DEFENDANTS' NOTICE OF MOTION AND MOTION TO STAY ACTION, OR IN THE ALTERNATIVE, TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM

5/25/2017: DEFENDANTS' NOTICE OF MOTION AND MOTION TO STAY ACTION, OR IN THE ALTERNATIVE, TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM

DEFENDANTS UBER TECHNOLOGIES, INC. AND RASIER-CA, LLC'S NOTICE OF SPECIAL DEMURRER TO COMPLAINT

5/25/2017: DEFENDANTS UBER TECHNOLOGIES, INC. AND RASIER-CA, LLC'S NOTICE OF SPECIAL DEMURRER TO COMPLAINT

STIPULATION AND ORDER REGARDING STAY AND HEARING DATES

6/20/2017: STIPULATION AND ORDER REGARDING STAY AND HEARING DATES

30 More Documents Available

 

Docket Entries

  • 11/01/2018
  • at 08:30 AM in Department 32, Daniel S. Murphy, Presiding; Status Conference - Held - Continued

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  • 11/01/2018
  • Minute Order ( (Status Conference)); Filed by Clerk

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  • 05/01/2018
  • at 08:30 AM in Department 32; Status Conference (Status Conference; Continued by Court) -

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  • 05/01/2018
  • Minute order entered: 2018-05-01 00:00:00; Filed by Clerk

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  • 05/01/2018
  • Minute Order

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  • 02/09/2018
  • at 08:30 AM in Department 32; Case Management Conference - Not Held - Advanced and Vacated

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  • 02/09/2018
  • Minute order entered: 2018-02-09 00:00:00; Filed by Clerk

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  • 02/05/2018
  • NOTICE OF RULING

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  • 01/17/2018
  • at 08:30 AM in Department 32; Hearing on Motion for Stay of Proceedings (MOTION - STAY PROCEEDINGS; Granted in Part) -

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  • 01/17/2018
  • ORDER RE: MOTION TO STAY ACTION AND TO TRANSFER ACTION TO COMPLEX LITIGATION PROGRAM

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58 More Docket Entries
  • 04/21/2017
  • Notice of Case Management Conference; Filed by Clerk

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  • 04/21/2017
  • NOTICE OF CASE MANAGEMENT CONFERENCE

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  • 04/17/2017
  • PROOF OF SERVICE OF SUMMONS

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  • 04/17/2017
  • PROOF OF SERVICE OF SUMMONS

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  • 04/14/2017
  • at 00:00 AM in Department 310; (Order-Complex Determination; Case Determined to be non-Complex) -

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  • 04/14/2017
  • Minute order entered: 2017-04-14 00:00:00; Filed by Clerk

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  • 04/14/2017
  • Minute Order

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  • 04/06/2017
  • Complaint; Filed by Ryan Sherman (Plaintiff)

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  • 04/06/2017
  • SUMMONS

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  • 04/06/2017
  • COMPLAINT FOR DAMA(WS FOR: (1) VIOLATION OF CAL. LABOR CODE 2698, ET SEQ.

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Tentative Rulings

Case Number: BC656880    Hearing Date: August 26, 2020    Dept: 32

ryan sherman,

Plaintiff,

v.

UBER TECHNOLOGIES, INC., et al.

Defendants.

Case No.: BC656880

Hearing Date: August 26, 2020

[TENTATIVE] order RE:

motion TO COMPEL ARBITRATION

Background

Plaintiff Ryan Sherman (Plaintiff) commenced this wage and hour action against Defendants Uber Technologies, Inc. (Uber) and Rasier-CA, LLC (collectively, Defendants) on April 6, 2017. The Complaint asserts a single cause of action for PAGA penalties. Plaintiff alleges that Defendants hired him to work as an Uber driver in January 2016. Plaintiff alleges that Defendants failed to pay wages to their employees in violation of Labor Code section 204.

Discussion

Defendants move to (1) compel Plaintiff to arbitrate the issue of his independent contract status (i.e., whether he was properly classified as an independent contractor) under the parties’ arbitration agreement and (2) stay all judicial proceedings pending the completion of the arbitration. In the alternative, Uber moves to enforce the parties’ arbitration agreement (including its waiver of representative claims), compel Plaintiff to arbitrate his individual claims against Uber, and dismiss Plaintiff’s representative claim under PAGA.[1]

Defendants’ primary argument in this motion is that the delegation clause in the parties’ arbitration agreement requires the arbitrator, not the Court, to decide the threshold issue of whether Plaintiff is an employee or independent contractor of Defendants and, as such, whether Plaintiff has standing to maintain a PAGA claim. The parties’ arbitration agreement states in pertinent part:

This Arbitration Provision is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the “FAA”) and evidences a transaction involving interstate commerce. This Arbitration Provision applies to any dispute arising out of or related to this Agreement or termination of the Agreement and survives after the Agreement terminates.

Except as provided in Section 15.3(v), below, regarding the Class Action Waiver, such disputes include without limitation disputes arising out of or relating to interpretation or application of this Arbitration Provision, including the enforceability, revocability or validity of the Arbitration Provision or any portion

of the Arbitration Provision. All such matters shall be decided by an Arbitrator and not by a court or judge. However, as set forth below, the preceding sentences shall not apply to disputes relating to the interpretation or application of the Class Action Waiver or PAGA Waiver below, including their enforceability, revocability or validity.

(Rosenthal Decl. Ex. C (emphasis added).)

Section 15.3(v) states in pertinent part:

Notwithstanding any other provision of this Agreement or the Arbitration Provision, to the extent permitted by law, (1) You and Company agree not to bring a representative action on behalf of others under the Private Attorneys General Act of 2004 (“PAGA”), California Labor Code § 2698 et seq., in any

court or in arbitration, and (2) for any claim brought on a private attorney general basis — i.e., where you are seeking to pursue a claim on behalf of a government entity — both you and Company agree that any such dispute shall be resolved in arbitration on an individual basis only (i.e., to resolve whether you have personally been aggrieved or subject to any violations of law), and that such an action may not be used to resolve the claims or rights of other individuals in a single or collective proceeding (i.e., to resolve whether other individuals have been aggrieved or subject to any violations of law) (“PAGA Waiver”). Notwithstanding any other provision of this Agreement or the Arbitration Provision, the validity of the PAGA Waiver may be resolved only by a civil court of competent jurisdiction and not by an arbitrator. If any provision of the PAGA Waiver is found to be unenforceable or unlawful for any reason, (1) the unenforceable provision shall be severed from this Agreement; (2) severance of the unenforceable provision shall have no impact whatsoever on the Arbitration Provision or the Parties’ attempt to arbitrate any remaining claims on an individual basis pursuant to the Arbitration Provision; and (3) any representative action brought under PAGA on behalf of others must be litigated in a civil

court of competent jurisdiction and not in arbitration. To the extent that there are any claims to be litigated in a civil court of competent jurisdiction because a civil court of competent jurisdiction determines that the PAGA Waiver is unenforceable with respect to those claims, the Parties agree that litigation of those claims shall be stayed pending the outcome of any individual claims in arbitration.

(Rosenthal Decl. Ex. C (emphasis added).)

The arbitration agreement also states that “to the extent [the PAGA Waiver] is deemed unenforceable by a court of competent jurisdiction,” PAGA claims “shall not be subject to arbitration and the requirement to arbitrate set forth in this Arbitration Provision shall not apply.” (Rosenthal Decl. Ex. C.)

“ ‘There are two prerequisites for a delegation clause to be effective. First, the language of the clause must be clear and unmistakable. [Citation.] Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability.’ ” [Citations.] The ‘clear and unmistakable’ test reflects a ‘heightened standard of proof’ that reverses the typical presumption in favor of the arbitration of disputes.” (Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 892.)

In Mohamed v. Uber Technologies, Inc. (9th Cir. 2016) 848 F.3d 1201,[2] the Ninth Circuit Court of Appeals reviewed an (ostensibly) identical arbitration agreement drafted by Uber. The Ninth Circuit found that the agreement “clearly and unmistakably delegated the question of arbitrability to the arbitrator except as pertained to the arbitrability of class action, collective action, and representative claims.” (Id. at 1208 (emphasis added).)

Consistent with the Ninth Circuit, the Court concludes that the delegation clause does not preclude the Court from deciding arbitrability issues with respect to Plaintiff’s PAGA claim.

First, the delegation clause does not clearly and unmistakably convey this power to the arbitrator with respect to Plaintiff’s PAGA claim. To the contrary, the arbitration agreement explicitly empowers the Court, not the arbitrator, to determine “the validity of the PAGA Waiver” “[n]otwithstanding any other provision of this Agreement or the Arbitration Provision.” Further, the arbitration agreement states that PAGA claims “shall not be subject to arbitration and the requirement to arbitrate set forth in this Arbitration Provision shall not apply” “to the extent [the PAGA Waiver] is deemed unenforceable by a court of competent jurisdiction.” Since a delegation clause is, at bottom, a requirement to arbitrate arbitrability, this latter provision indicates that PAGA claims are not subject to the delegation clause to the extent the PAGA Waiver is deemed invalid (discussed post).

Second, the Court concludes that the parties cannot delegate PAGA issues to the arbitrator as a matter of law. In Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th 439, the employer moving to compel arbitration contended that the parties had “agreed that an arbitrator would decide the scope and application of the agreement to arbitrate, and therefore the arbitrator should decide if the PAGA claims are arbitrable.” The appellate court disagreed. “A PAGA case is ‘a type of qui tam action.’ [Citation.] A PAGA case ‘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….’ [Citation.] ‘[T]he State is the real party in interest.’ [Citation.] The fact that [the employee] agreed to arbitrate his private employment disputes with [the employer] is not relevant. [The employee’s] lawsuit is a PAGA claim, on behalf of the state. The state is not bound by [the employee’s] predispute arbitration agreement.” (Betancourt, supra, 9 Cal.App.5th at 447-48; see also ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 185 (“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.”).) The same result must be reached here.

Because the Court can resolve arbitrability disputes with respect to Plaintiff’s PAGA claim, the Court must determine whether (1) the PAGA Waiver is valid and (2) Defendants can arbitrate Plaintiff’s standing separate from the remainder of his PAGA claim.

The Court determines that the PAGA Waiver is invalid for the simple reason that “ ‘an employee’s right to bring a PAGA action is unwaivable.’ ” (Kec v. Superior Court of Orange County (2020) 51 Cal.App.5th 972 (citing Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 378).) The California Supreme Court has explained that such rights are unwaivable for two reasons. First, “agreements by employees to waive their right to bring a PAGA action serves to disable one of the primary mechanisms for enforcing the Labor Code.” Accordingly, “such an agreement has as its ‘object, … indirectly, to exempt [the employer] from responsibility for [its] own … violation of law,’” and is thus “against public policy and may not be enforced. (Civ. Code, § 1668.).” Second, “such an agreement also violates Civil Code section 3513’s injunction that ‘a law established for a public reason cannot be contravened by a private agreement.’ The PAGA was clearly established for a public reason, and agreements requiring the waiver of PAGA rights would harm the state’s interests in enforcing the Labor Code and in receiving the proceeds of civil penalties used to deter violations.” (Iskanian, supra, 59 Cal.4th at 383.)

Defendants argue that the PAGA Waiver is enforceable in light of the United States Supreme Court’s recent decision Epic Systems Corp. v. Lewis (Epic) (2018) 138 S. Ct. 1612. The California Court of Appeal, however, has already examined and rejected this same argument:

Relying on Epic’s reiteration of the FAA’s broad preemptive scope barring state laws interfering with arbitration provisions requiring individual arbitrations, Baker urges us to disavow Iskanian’s continuing validity on PAGA claims. We decline to do so.

On federal questions, intermediate appellate courts in California must follow the decisions of the California Supreme Court, unless the United States Supreme Court has decided the same question differently. [Citations.]

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 NRLA. [Citation.]

Moreover, the cause of action at issue in Epic differs fundamentally from a PAGA claim. Epic held an employee who agrees to individualized arbitration cannot avoid this agreement by asserting claims on behalf of other employees under the FLSA or federal class action procedures. [Citation.] The Iskanian court distinguished this type of factual scenario from the PAGA context. Forecasting Epic’s outcome, the Iskanian court said: “Our opinion today would not permit a state to circumvent the FAA by, for example, deputizing employee A to bring a suit for the individual damages claims of employees B, C, and D. This pursuit of victim-specific relief by a party to an arbitration agreement on behalf of other parties to an arbitration agreement would be tantamount to a private class action, whatever the designation given by the Legislature. Under Concepcion, such an action could not be maintained in the face of a class waiver.” [Citation.] The Iskanian court found the PAGA claim was outside this rule because the employee had been deputized by the state to bring the qui tam claim on behalf of the state, not on behalf of other employees. [Citation.] Although on somewhat different grounds, the Sakkab court also found a refusal to enforce a total ban on the PAGA claim was not preempted by the FAA. [Citation.]

Epic’s interpretation of the FAA’s preemptive scope does not defeat Iskanian's holding or reasoning for purposes of an intermediate appellate court applying the law. The Iskanian court reached a different conclusion from Concepcion on the enforceability of the contractual waiver — not because the Iskanian court interpreted the FAA differently from Concepcion on the preemption issue, but based on the unique nature of a PAGA claim as a qui tam type action, and the “PAGA litigant’s status as ‘the proxy or agent’ of the state” and his or her “substantive role in enforcing our labor laws on behalf of state law enforcement agencies.” [Citation.]

Because the California Supreme Court found a PAGA claim involved a dispute not governed by the FAA, and the waiver would have precluded the PAGA action in any forum, it held its PAGA-waiver unenforceability determination was not preempted. Epic did not reach the issue regarding whether a governmental claim of this nature is governed by the FAA, or consider the implications of a complete ban on a state law enforcement action. Because Epic did not overrule Iskanian's holding, we remain bound by the California Supreme Court’s decision. [Citation.]

(Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 619-620.)

Like the California Court of Appeal, this Court is not at liberty to deviate from or overrule Iskanian’s holding and remains bound by its decision.

Defendants argue in a footnote that Correia was “wrongly decided.” This argument is inconsequential. Correia is binding precedent on this Court and offers persuasive reasons why Iskanian remains valid.

Under Iskanian, Defendants’ PAGA Waiver is invalid. Because Defendants’ PAGA Waiver is invalid, Plaintiff’s PAGA claim is not subject to arbitration.

The Court concludes that this finding moots the remainder of this motion. Under the express terms of the arbitration agreement, if the Court determines that the PAGA waiver is invalid, “any representative action brought under PAGA on behalf of others must be litigated in a civil court of competent jurisdiction and not in arbitration.” Olabi v. Neutron Holdings, Inc. (2020) 50 Cal.App.5th 1017 compels this conclusion. There, the hiring party argued that the parties must “arbitrate the underlying misclassification dispute” before returning to court to litigate the worker’s PAGA claim. The appellate court concluded that it need not decide this issue because the hiring party’s argument failed “at the first hurdle: the agreement.” The appellate court noted that the arbitration agreement “carves out PAGA representative actions” because the arbitration agreement stated that “Neither this Arbitration Provision nor the Class Action Waiver shall apply to a representative action brought on behalf of others under [PAGA]; any representative action brought under PAGA on behalf of others must be litigated in a court of competent jurisdiction.” The appellate court found that “the plain language of the carve-out removes a PAGA lawsuit from the ‘disputes’ otherwise arbitrable under the Arbitration Provision and requires the lawsuit to be litigated in court.”

The Court finds no meaningful distinction between the arbitration agreement in this case and the one examined by the appellate court in Olabi. The PAGA carve-out in the arbitration agreement in this case, with one inapplicable qualification, states that PAGA claims must be litigated in civil court.

Assuming arguendo that this conclusion did not moot the remainder of this motion, the Court continues its analysis by examining Defendants’ standing argument. Defendants argue that Plaintiff must arbitrate the issue of whether he is an employee as opposed to an independent contractor before he may litigate the remainder of his PAGA claim.

The merits of a similar contention were addressed and rejected in Perez v. U-Haul Co. of California (Perez) (2016) 3 Cal.App.5th 408. There, “U-Haul filed motions seeking to compel plaintiffs to individually arbitrate the ‘predicate issue of whether’ they had personally been subjected to any Labor Code violation, and therefore had standing to assert a PAGA claim.” U-Haul contended that “in this case, it is not seeking to preclude plaintiffs from pursuing a representative PAGA claim, but rather is seeking only to arbitrate the plaintiffs’ individual standing to bring a PAGA claim. If the arbitrator determines the plaintiffs are aggrieved employees within the meaning of the PAGA, they may then proceed with their representative action in the superior court.” The trial court and the appellate court disagreed. The appellate court in Perez provided the following instructive analysis:

Even if we were to accept U–Haul’s interpretation of the employment agreement, we are not aware of any authority supporting its argument that an employer may legally compel an employee to arbitrate the individual aspects of his or her PAGA claim, while simultaneously preserving its own right to litigate the representative aspects of the claim in court. The only decision that has addressed the issue, Williams v. Superior Court (2015) 237 Cal.App.4th 642, 188 Cal.Rptr.3d 83 (Williams), held that an employer could not force employees to proceed in such a manner. As in this case, the plaintiff in Williams signed an arbitration agreement that contained a waiver of his right to assert a representative claim. The plaintiff subsequently a filed “a single-count [PAGA] action” alleging that his employer had “fail[ed] to provide off-duty rest periods, as required by section 226.7.” [Citation.] The employer “moved ... for an order staying the PAGA claim, but sending the ‘individual claim’ that [plaintiff] had been subjected to Labor Code violations to arbitration.” [Citation.] The trial court granted the motion, explaining that while Iskanian precluded the employer from “forc[ing] [plaintiff] to waive or arbitrate his PAGA claim[,] ... the ‘threshold dispute between plaintiff ... and his former employer as to whether or not he was denied off-duty rest periods’ [was] ... ‘amenable to arbitration under Iskanian.’ ” [Citation.]

The appellate court reversed, concluding there was no basis for the trial court’s “determin[ation] that [the plaintiff] must submit the ‘underlying controversy’ to arbitration for a determination whether he is an ‘aggrieved employee’ under the Labor Code with standing to bring a representative PAGA claim. [Citation.]” [Citation.] The court noted that neither the employer nor the trial court had “cited [any] legal authority ... that a single representative action may be split in such a manner.... Indeed, case law suggests that a single representative PAGA claim cannot be split into an arbitrable individual claim and a nonarbitrable representative claim brought solely on the employee’s behalf [because every].... PAGA claim [is brought] ... “as the proxy or agent of the state’s labor law enforcement agencies.” ’ [Citation.] Accordingly, petitioner cannot be compelled to submit any portion of his representative PAGA claim to arbitration, including whether he was an ‘aggrieved employee.’ ” [Citation.]

We agree with Williams’s conclusion that 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.” In Iskanian, the Supreme Court explained that “every PAGA action, whether seeking penalties for Labor Code violations as to only one aggrieved employee—the plaintiff bringing the action—or as to other employees as well, is a representative action on behalf of the state.” [Citation.] The Court also held that requiring an employee to bring a PAGA claim in his or her “individual” capacity, rather than in a “representative” capacity, would undermine the purposes of the statute. [Citation.] Given these conclusions, we do not believe an employer may force an employee to split a PAGA claim into “individual” and “representative” components, with each being litigated in a different forum.

Moreover, the reasoning of Iskanian indicates that an employer is not permitted to impose arbitration provisions that impede an aggrieved employee’s ability to bring a PAGA claim, which is “ ‘fundamentally a law enforcement action designed to protect the public’.” (Iskanian, supra, 59 Cal.4th at pp. 381, 383–384, 173 Cal.Rptr.3d 289, 327 P.3d 129 [because PAGA was “established for a public reason,” it “cannot be contravened by a private agreement”; an employer may not impose arbitration terms that would “frustrate PAGA’s objectives”].) Under “Iskanian’s ... public policy rationale,” an arbitration provision is unenforceable if it “circumvents [PAGA’s] intent to empower employees to enforce the Labor Code as agency representatives and harms the state’s interest in enforcing the Labor Code.” [Citation.] In this cause, U–Haul is, in effect, attempting to impose its preferred forum for different aspects of the PAGA claim by requiring plaintiffs to individually arbitrate whether a Labor Code violation was committed against them, while simultaneously preserving its right to a judicial forum for the “representative” issues. We think it clear that a private agreement requiring an employee to litigate his or her PAGA claim in multiple forums that have been selected based solely on the employer’s own preferences interferes with “the state’s interests in enforcing the Labor Code,” and is therefore against public policy.

(Perez, supra, 3 Cal.App.5th at 420-22.)

Perez and Williams prohibit severance of this standing issue. While Defendants (arguably) are advancing a different claim than U-Haul in Perez, the distinction is meaningless. Defendants are still attempting to compel Plaintiff to submit a threshold issue of PAGA standing to arbitration before litigating the remainder of the PAGA claim. As noted in Perez, an employer cannot “force an employee to split a PAGA claim into ‘individual’ and ‘representative’ components, with each being litigated in a different forum.” (See also Williams, supra, 237 Cal.App.4th at 649 (“case law suggests that a single representative PAGA claim cannot be split into an arbitrable individual claim and a nonarbitrable representative claim”); Hernandez v. Ross Stores, Inc. (2016) 7 Cal.App.5th 171, 178 (“There is no authority supporting Ross’s argument that an employer may legally compel an employee to arbitrate the individual aspects of his PAGA claim while maintaining the representative claim in court.”).) Moreover, the severance sought by Defendants undermines PAGA’s public policy benefits. As noted by Perez, “a private agreement requiring an employee to litigate his or her PAGA claim in multiple forums that have been selected based solely on the employer’s own preferences interferes with ‘the state’s interests in enforcing the Labor Code,’ and is therefore against public policy.” (See also Hernandez, supra, 7 Cal.App.5th at 178 (“[R]equiring an employee to litigate a PAGA claim in multiple forums would thwart the public policy of PAGA to ‘empower employees to enforce the Labor Code’ on behalf of the state.”).)

Defendants’ reliance on federal and out-of-state authorities to show otherwise is misplaced. None of the cases cited by Defendants concern PAGA and grapple with the unique public policy benefits which the statutory scheme provides. Defendants’ citation to a Los Angeles Superior Court ruling is a violation of the California Rules of Court (CRC Rule 8.1115(a)) and was therefore ignored.

Defendants also argue that the threshold issue of whether Plaintiff is an employee is not an element of her PAGA claim and is meaningfully different from reviewing whether an employee is “aggrieved” within the meaning of PAGA. The Court sees no merit to this argument. Standing “is a party’s right to make a legal claim and is a threshold issue to be resolved before reaching the merits of an action.” (Dent v. Wolf (2017) 15 Cal.App.5th 230, 233-34.) PAGA has two standing requirements: (1) plaintiff must be a current or former employee of the violator and (2) plaintiff must be affected by one or more of the alleged violations. (See Huff v. Securitas Security Services USA, Inc. (2018) 23 Cal.App.5th 745, 757 (citing Lab. Code § 2699(c)).) Perez and Williams addressed the latter requirement. Their rationale, however, extends equally to the former requirement as both are elements of PAGA standing.

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Conclusion

Defendants’ motion to compel arbitration is denied. Because of the points presented in this motion, the Court is inclined to adjudicate the issue of whether Plaintiff is an independent contractor or employee in a separate trial.


[1] Defendants’ request for judicial notice are denied as irrelevant. Briefs submitted to the California Court of Appeal and a Los Angeles Superior Court decision are not binding on this Court.

[2] Defendants repeatedly cite Mohamed. The Court fails to see how this opinion helps their case. In Mohamed, the Ninth Circuit found that (1) the delegation clause did not apply to the employee’s PAGA claim, (2) the delegation clause’s inapplicability required the court “to consider on the merits whether the PAGA waiver in that agreement is enforceable, and what effect the waiver has on the arbitration provision as a whole,” and (3) the PAGA Waiver was unenforceable under Iskanian because the PAGA waiver “required employees to make a decision as to whether or not they would preserve their right to bring PAGA claims before they knew any such claims existed.”

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