©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 137 101 Gentry v. Sup. Court (Circuit City Stores, Inc.), 42 Cal. 4th 443, 450 (2007). 102 AT&T Mobility LLC v. Concepcion, 563 U.S. 323 (2011). 103 Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348, 364 (2014) (“Concepcion holds that even if a class waiver is exculpatory in a particular case, it is nonetheless preempted by the FAA. Under the logic of Concepcion, the FAA preempts Gentry’s rule against employment class waivers.”) (emphasis in original). 104 Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018). 105 Lamps Plus v. Varela, 139 S. Ct. 1407, 1412-13 (2019). 106 1 Cal. 5th 233 (2016). 107 Id. at 244. 108 Id. at 245-48. 109 Brown v. Ralphs Grocery Co., 197 Cal. App. 4th 489, 502-03 (2011) (PAGA is a mechanism by which the state itself can enforce state labor laws, and a PAGA plaintiff is a state proxy or agent and so the state should be unaffected by a private agreement to arbitrate). Brown relied on Broughton v. Cigna Healthplans, 21 Cal. 4th 1066 (1999) (claims for injunctive relief under the California Consumers Legal Remedies Act are not arbitrable), Cruz v. PacifCare Health Sys., Inc., 30 Cal. 4th 303 (2003) (claims for injunctive relief under the UCL are not arbitrable), and Franco v. Athens Disposal Co., 171 Cal. App. 4th 1277, 1303 (2009) (PAGA waiver in arbitration agreement invalid because it impedes comprehensive enforcement of the Labor Code). Disagreeing with that view was the Court of Appeal decision that the California Supreme Court reviewed in 2014: Iskanian v. CLS Transp., 206 Cal. App. 4th 949 (2012) (disagreeing with Brown: “[W]e disagree with the majority’s holding in Brown. We recognize that the PAGA serves to benefit the public and that private attorney general laws may be severely undercut by application of the FAA. But we believe that the United States Supreme Court has spoken on the issue, and we are required to follow its binding authority.”), judgment rev’d, 59 Cal. 4th 348 (June 23, 2014), review granted, No. S204032 (Cal. Sept. 19, 2012). 110 Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348, 366 (2014) (“Concepcion held that the FAA does prevent states from mandating or promoting procedures incompatible with arbitration. The Gentry rule runs afoul of this latter principle. We thus conclude in light of Concepcion that the FAA preempts the Gentry rule.”). 111 Id. at 384 (“We conclude that the rule against PAGA waivers does not frustrate the FAA’s objectives because, as explained below, the FAA aims to ensure an efficient forum for the resolution of private disputes, whereas a PAGA action is a dispute between an employer and the state Labor and Workforce Development Agency.”). The Supreme Court held that “where … an employment agreement compels the waiver of representative claims,” the agreement “frustrates the PAGA’s objectives” and “is contrary to public policy and unenforceable as a matter of state law.” Id. As the Ninth Circuit has stated, California’s ban on arbitral waivers of representative actions reflects public policy, rather than substantive unconscionability, Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1264 (9th Cir. 2017). 112 Julian v. Glenair, Inc., 17 Cal. App. 5th 853, 860 (2017) (internal quotation marks and citation omitted) (“an agreement to arbitrate a PAGA claim, entered into before an employee is statutorily authorized to bring such a claim on behalf of the state, is an unenforceable predispute waiver. As any agreement by [the plaintiff employees] was entered into before they were authorized to bring a PAGA claim, the trial court properly denied the petition to compel.”). 113 Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018). 114 Correia v. NB Baker Elec., Inc., 32 Cal. App. 5th 602 (2019) (“Although the Epic court reaffirmed the broad preemptive scope of the [FAA], Epic did not address the specific issues before the Iskanian court involving a claim for civil penalties brought on behalf of the government and the enforceability of an agreement barring a PAGA representative action in any forum. We thus conclude the trial court properly ruled the waiver of representative claims in any forum is unenforceable.”) (emphasis in original). 115 Brooks v. AmeriHome Mortgage Co., 47 Cal. App. 5th 624, 629 (2020) (plaintiff “cannot be compelled to separately arbitrate whether he was an aggrieved employee”). See also Contreras v. Sup. Court (Zum Services, Inc.), 61 Cal. App. 5th 461, 477 (Mar. 1, 2021) (“a PAGA plaintiff may not be compelled to arbitrate whether he or she is an aggrieved employee”). 116 Bautista v. Fantasy Activewear, Inc., 52 Cal. App. 5th 650 (2020). 117 Collie v. The Icee Company, 52 Cal. App. 5th 477 (2020). 118 Olson v. Lyft, Inc., 56 Cal. App. 5th 862 (2020). 119 Provost v. YourMechanic, Inc., 55 Cal. App. 5th 982 (2020). 120 Broughton v. Cigna Healthplans of California, 21 Cal. 4th 1066 (1999); Cruz v. PacifiCare Health Sys., Inc. 30 Cal. 4th 303 (2003). 121 McGill v. Citibank, 232 Cal. App. 4th 753 (2014), judgment rev’d, 2 Cal. 5th 945 (April 6, 2017). 122 Id. at 770 (quoting Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th 348, 379 (2014)). 123 Id. at 761. 124 McGill v. Citibank, review granted, 345 P.3d 61 (Cal. April 1, 2015) (granting review to decide: “Does the Federal Arbitration Act (9 U.S.C. § 1 et seq.), as interpreted in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 323, preempt the California rule (Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066; Cruz v. PacifiCare Health Sys., Inc. (2003) 30 Cal.4th 303) that statutory claims for public injunctive relief are not subject to compulsory private arbitration?”). 125 McGill v. Citibank, N.A., 2 Cal. 5th 945, 952, 962 (2017). 126 Clifford v. Quest Software Inc., 38 Cal. App. 5th 745, 753 (2019) (distinguishing the private injunctive relief sought here from the public injunctive relief sought in Broughton and Cruz against misleading advertising practices). 127 Melendez v. San Francisco Baseball Assocs. LLC, 7 Cal. 5th 1, 10 (2019) (“Plaintiffs’ claim arises solely from independent state law— Labor Code section 201—and is not based on the collective bargaining agreement.”).
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