Correia v. NB Baker Elec., Inc.
244 Cal. Rptr. 3d 177
Cal. Ct. App. 5th2019Background
- Plaintiffs Correia and Stow (former employees) signed identical predispute arbitration agreements with Baker that (1) made arbitration the exclusive forum for employment disputes and (2) barred class and representative actions in any forum.
- Plaintiffs sued Baker for wage-and-hour violations and sought civil penalties under PAGA (Labor Code §2699 et seq.).
- Baker petitioned to compel individual arbitration of all claims; plaintiffs opposed, arguing the PAGA representative-action waiver is unenforceable and PAGA claims cannot be compelled to arbitration.
- The trial court compelled arbitration for all claims except the PAGA claim, staying the PAGA claim pending arbitration of individual claims, relying on Iskanian and Tanguilig.
- Baker appealed, arguing plaintiffs’ opposition was untimely, Iskanian is undermined by Epic Systems, and that even if the waiver is invalid the PAGA claim (representative or individual aspects) should still be arbitrable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused discretion by considering plaintiffs' late opposition to the petition to compel arbitration | Plaintiffs urged the court to consider the response and that good-cause discretion permits late filing | Baker argued the opposition was untimely under CCP §1290.6 and should be ignored | Court upheld exercise of discretion to consider the late opposition — no undue prejudice to Baker and courts favor merits decisions |
| Whether Iskanian remains binding after Epic Systems | Plaintiffs relied on Iskanian: PAGA waivers that bar representative actions in any forum are unenforceable because PAGA is a public enforcement (qui tam) action outside FAA coverage | Baker argued Epic reasserts FAA breadth and preemption, undermining Iskanian’s rule | Court held Iskanian remains controlling; Epic did not address the governmental/qui tam nature of PAGA and thus did not overrule Iskanian |
| Whether a predispute agreement can bar bringing PAGA representative actions in any forum | Plaintiffs: such blanket waivers violate public policy and are unenforceable per Iskanian | Baker: arbitration agreement’s waiver should be enforced; alternatively, any surviving PAGA claims can be ordered to arbitration | Court ruled the blanket representative-action waiver is unenforceable under Iskanian |
| Whether a PAGA representative or individual claim may be compelled to arbitration absent state consent | Plaintiffs: the state is the real party in interest in PAGA claims; the state did not consent to arbitration so PAGA claims cannot be compelled | Baker: even if waiver is invalid, PAGA claims (or at least the individual aspects) can be arbitrated; federal decisions say PAGA claims can be arbitrated | Court held predispute arbitration cannot be used to compel representative PAGA claims because the state — the real party in interest — did not agree to arbitrate; individual/representative aspects cannot be split for arbitration |
Key Cases Cited
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA representative-action waivers that bar suits in any forum are unenforceable because PAGA is a public enforcement/qui tam action outside FAA coverage)
- Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (U.S. 2018) (FAA requires enforcement of individualized-arbitration/class-waiver terms against NLRA-based objections; reiterates broad FAA preemption principles)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (FAA preempts state rules that prohibit class-action waivers when they interfere with arbitration’s attributes)
- Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425 (9th Cir. 2015) (upheld Iskanian’s core holding that blanket PAGA waivers are not preempted by FAA but left open where surviving PAGA claims must be resolved)
- Tanguilig v. Bloomingdale's, Inc., 5 Cal.App.5th 665 (Cal. Ct. App. 2016) (predispute arbitration cannot be used to force PAGA claims into arbitration without state consent)
- Julian v. Glenair, Inc., 17 Cal.App.5th 853 (Cal. Ct. App. 2017) (predispute arbitration agreements do not permit compelled arbitration of PAGA representative claims because the state is the real party in interest)