Cortez v. Doty Bros. Equip. Co.
15 Cal. App. 5th 1
| Cal. Ct. App. 5th | 2017Background
- Cortez, a Teamsters-represented truck driver, sued Doty Bros. individually and on behalf of a putative class for various Labor Code and Wage Order 16 violations and brought a representative PAGA claim.
- Doty Bros. petitioned to compel arbitration under the parties’ collective bargaining agreement (CBA); the trial court granted arbitration for individual claims but severed and stayed the PAGA claim and reserved class-arbitrability to the arbitrator.
- The parties agreed the trial court (not the arbitrator) would decide whether the CBA authorized classwide arbitration; the court held the CBA did not authorize class arbitration and dismissed the class claims (March 23, 2015).
- Cortez appealed; jurisdictional issues arose because the PAGA claim was pending, and appellate courts had held the death knell doctrine does not apply when a PAGA claim survives.
- Cortez later voluntarily dismissed his PAGA claim and sought review again; the appellate court exercised its discretion to treat the consolidated appeal as a petition for writ of mandate and reached the merits.
- Holding on the merits: the CBA clearly and unmistakably required arbitration of Wage Order 16–based claims (overtime, meal/rest breaks, recordkeeping), but did not cover (1) post-termination wage-payment penalties (Lab. Code § 203) or (2) the UCL claim premised on that wage-payment violation; the CBA did not authorize classwide arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether death knell doctrine made the March 23, 2015 order dismissing class claims immediately appealable while PAGA claim remained pending | Cortez: order was appealable under death knell; later dismissal of PAGA cured any defect | Doty Bros.: PAGA survival defeats death knell appealability | Death knell does not apply when a PAGA claim remains pending; court declined to rely on appeal route and treated matter as writ petition |
| Whether the court could be treated as deciding class-arbitrability (procedural posture) | Cortez: appeal permitted review of related arbitration order as intermediate order affecting substantial rights | Doty Bros.: trial-court determination of class arbitrability appropriate | Appellate court exercised discretion to treat consolidated appeal as writ and review both orders for efficiency |
| Whether the CBA’s arbitration clause clearly and unmistakably covered Labor Code/Wage Order claims | Cortez: CBA doesn’t mention Labor Code, so statutory claims aren’t waived/arbitrable | Doty Bros.: CBA expressly requires arbitration of disputes "arising from" Wage Order 16, thus covers related Labor Code claims | Claims enforcing Wage Order 16 (overtime, meal/rest breaks, recordkeeping) are arbitrable; but §203 post-termination wage-payment penalty and related UCL claim are not covered |
| Whether the CBA authorizes classwide arbitration, or NLRA makes class-waiver invalid | Cortez: NLRA’s protection of concerted activity makes class-waivers invalid; class arbitration should be allowed | Doty Bros.: CBA language limits arbitration to individual grievances; no contractual authorization for class arbitration | CBA does not authorize class arbitration; NLRA argument rejected under California precedent (Iskanian) |
Key Cases Cited
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA actions nonwaivable; NLRA does not bar excluding class claims from CBA arbitration)
- In re Baycol Cases I & II, 51 Cal.4th 751 (Cal. 2011) (death knell doctrine permits immediate appeal of orders that effectively terminate class claims)
- Penn Plaza LLC v. Pyett, 556 U.S. 247 (U.S. 2009) (CBA can clear and unmistakably waive employees’ judicial forum rights for statutory claims)
- Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (U.S. 2010) (class arbitration unavailable absent contractual authorization)
- Munoz v. Chipotle Mexican Grill, Inc., 238 Cal.App.4th 291 (Cal. Ct. App. 2015) (death knell inapplicable while PAGA claim pending)