Thursday, June 11, 2015
C.A. Overturns Order That Worker Arbitrate PAGA Claim
Panel Says Trial Court Erred in Splitting Action Into Arbitrable and Non-Arbitrable Components
By a MetNews Staff Writer
A plaintiff who brings a representative action under the Labor Code Private Attorney Generals Act cannot be forced to arbitrate any aspect of the suit, including his personal claim, the Court of Appeal for this district has ruled.
Div. Four Tuesday granted a writ of mandate overturning Los Angeles Superior Court Judge William Highberger’s order requiring Andre Williams to take his personal claim against Pinkerton Governmental Services, Inc. to arbitration, even as his claim was proceeding on behalf of his fellow workers in court.
The statute, commonly known as PAGA, allows an employee to bring a qui tam action, suing his or her employer in order to collect penalties for violations of certain Labor Code provisions if the Division of Labor Standards Enforcement does not. The state Supreme Court held in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 that a contractual agreement to arbitrate cannot be enforced against a PAGA claim because such claims are brought on behalf of the state, which is not a party to the contract.
Williams alleged in his PAGA claim, filed in 2012, that Pinkerton violated Labor Code §227 by failing to provide off-duty rest periods. Pinkerton moved to compel arbitration pursuant to the Federal Arbitration Act, arguing that Iskanian does not apply where the employee could have opted out of arbitration without adverse employment consequences, and that even if it did apply, Williams’ waiver of the right to bring representative claims could be enforced against him personally if not against the rest of the class.
Highberger rejected Pinkerton’s first argument, but accepted the second, at least as to the “threshold question” of whether Williams personally had been denied rest breaks. In denying Williams’ motion for reconsideration, the judge said he “continues to believe that arbitration of the narrow question of whether or not plaintiff Williams is factually and legally an ‘aggrieved’ person, not just someone who asserts that he is aggrieved, is required to give force and effect to the parties’ binding arbitration agreement, the enforceability of which is controlled by a federal statute.”
But Justice Nora Manella, writing for the Court of Appeal, agreed with the plaintiff that a PAGA claim is not divisible in the manner stated by the trial judge.
“The trial court cited no legal authority for its determination that a single representative action may be split in such a manner; Pinkerton has identified no case so holding, and we have located none. Indeed, case law suggests that a single representative PAGA claim cannot be split into an arbitrable individual claim and a nonarbitrable representative claim.”
The jurist cited Reyes v. Macy’s, Inc. (2011) 202 Cal.App.4th 1119, holding that a PAGA claim may not be brought solely on the employee’s behalf, but must be brought in a representative capacity, and is thus not amenable to arbitration.
Attorneys on appeal were Larry W. Lee and Nicholas Rosenthal of Diversity Law Group for the plaintiff and Henry D. Lederman and J. Kevin Lilly of Littler Mendelson, along with Sherry B. Shavit and Jennifer S. McGeorge of Tharpe & Howell for the defendant.
The case is Williams v. Superior Court (Pinkerton Governmental Services, Inc.), 15 S.O.S. 2918.
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