The Motion to Compel Arbitration brought by Defendant Automobile Club of Southern California is denied.
Per Defendant’s Second Amended Notice of Motion, Defendant seeks “an order compelling arbitration of Plaintiff Santiago Ochoa’s individual claim and staying the PAGA claim and all proceedings in this court.” (ROA 53 at 1:6-9). The action before this court is a representative action for civil penalties pursuant to Labor Code § 2699, et seq., for violations of Labor Code §226(a). (ROA 2). The operative complaint specifies that Plaintiff “does not seek to recover anything other than penalties as permitted by California Labor Code §2699.” (ROA 2 at 2:10-11).
Plaintiff initiated an arbitration on January 12, 2021. (Cole Decl. ¶5, Ex. 4). In the arbitration, Plaintiff asserts claims for:
- discrimination and retaliation in violation of FEHA;
- failure to prevent discrimination, harassment and/or retaliation in violation of FEHA;
- failure to engage in the interactive process in violation of Cal. Gov. Code § 12940(n);
- failure to provide reasonable accommodation in violation of Cal. Gov. Code § 12940(m); and
- retaliation in violation of Labor Code § 1102.5, et seq.
(Cole Decl. Ex. 4).
Defendant filed a counterclaim in the arbitration, alleging a single claim for declaratory relief. (Cole Decl., ¶6, Ex. 5). The prayer for relief in the arbitration counterclaim seeks:
- Entry of a declaratory judgment affirming that the Auto Club issued to Ochoa for the time period of September 24, 2019 to the present accurate wage statements in compliance with Labor Code section 226(a);
- Entry of a declaratory judgment affirming that the wage statements that the Auto Club issued to Ochoa for the time period of September 24, 2019 to the present comply with Labor Code section 226(a)(1) by identifying gross wages earned by Ochoa;
- Entry of a declaratory judgment affirming that the wage statements that the Auto Club issued to Ochoa for the time period of September 24, 2019 to the present comply with Labor Code section 226(a)(9) by identifying the correct rates of pay for and number of hours worked by Ochoa, including, but not limited to, for the “COMMOT” and EXTRAOT” items of pay
(Cole Decl., Ex. 5).
Defendant does not explain what individual claim it seeks to compel Plaintiff to arbitrate. As the only claim asserted in this action is not an individual claim, but rather a representative claim, the court finds that there is nothing to compel to arbitration.
Defendant asks this court to stay this action pending arbitration pursuant to CCP §1281.4 or, alternatively, pursuant to this court’s inherent authority as set forth in CCP §187.
CCP §1281.4 on its face requires a court order compelling arbitration as a prerequisite for a Court to stay the matter. As the court has not ordered arbitration, it cannot stay the case under this statute.
The court declines to stay the case pursuant to CCP §187, as Defendant has not demonstrated that a stay is appropriate in this case.
Defendant argues that the stay is necessary because “Plaintiff’s PAGA claim is based on alleged wage and hour violations that are the subject of a pending arbitration.” (Mtn. at 17:4-5). Defendant further argues that the stay will promote judicial efficiency because “[t]o have standing to pursue a PAGA claim, Plaintiff must have suffered a Labor Code violation during his employment with Auto Club. This pending arbitration will proceed to a resolution of the dispute over whether Plaintiff suffered the alleged Labor Code violation. If he did not . . . the result of the pending arbitration will impact Plaintiff’s purported PAGA claim.” (Mtn. at 18:24-28).
Defendant’s justification for the stay directly contravenes binding California authority. California courts are clear that PAGA actions cannot be split into individual arbitrable and representative nonarbitrable components. (Provost v. YourMechanic, Inc. (2020) 55 Cal.App.5th 982, 996; see also Contreras v. Superior Court of Los Angeles County (2021) 61 Cal.App.5th 461). The only claim in arbitration that overlaps the Labor Code violations alleged in this PAGA action is Defendant’s counterclaim for declaratory relief.
As explained by the Court in Provost: “[T]here is a long line of cases holding that a plaintiff’s single-count PAGA action, such as in the instant case, ‘cannot be split into an arbitrable ‘individual claim’ and a nonarbitrable representative claim.’” (Provost, supra, 55 Cal.App.5th at 993).
The Court in Provost cited language from Williams v. Superior Court (2015) 237 Cal.App.4th 642, noting that “[b]ecause the PAGA claim is not an individual claim…[Plaintiff] cannot be compelled to submit any portion of his representative PAGA claim to arbitration, including whether he was an “aggrieved employee.” (Id. at 649; see also Provost, supra, 55 Cal.App.5th at 994).
“Since being decided, a series of cases have followed Williams and its holding that a single representative PAGA action is not divisible into separate arbitrable ‘individual’ and nonarbitrable representative components in determining whether a plaintiff is an ‘aggrieved employee’ with standing to bring such an action.” (Provost, supra, 55 Cal.App.5th at 994). “Williams and its progeny…firmly reject the contention that the issue of a plaintiff’s status as an ‘aggrieved employee’ must first be arbitrated before he or she has standing to pursue such a claim.” (Id. at 995).
As recently explained in Contreras v. Superior Court of Los Angeles County, “[t]he ‘preliminary’ question of whether Petitioners are “aggrieved employees” under PAGA may not be decided in private party arbitration.” Contreras v. Superior Court (2021) 61 Cal.App.5th 461, 473. “If an arbitrator rules that petitioners are not ‘aggrieved employees,’ there will be no remaining PAGA claim anywhere. By virtue of an arbitration to which it did not consent the state will have lost one of its weapons in the enforcement of California’s labor laws. This result would be at odds with the several appellate opinions we previously have cited…” (Id. at 474). Further, “[c]haracterizing the process as resolving only an ‘arbitrability,’ ‘delegatable’ or ‘gateway’ issue, or the adjudication of an ‘antecedent’ fact, does not extinguish the risk to the state that it is an arbitrator, not a court, who nullifies the state’s PAGA claim.” (Id.).
For these reasons, Defendant Automobile Club of Southern California’s Motion to Compel Arbitration of Plaintiff Santiago Ochoa’s Individual Claims, to Stay the Private Attorneys General Act (“PAGA”) Claim Proceedings, and to Stay the Action Pursuant to Code of Civil Procedure Section 1281.4 is denied.