Cortez v. Doty Bros. Equipment Co.
B275255
| Cal. Ct. App. | Sep 1, 2017Background
- Plaintiff Gabriel Cortez, a Teamsters member employed by Doty Bros., sued for wage-and-hour violations individually, on behalf of a putative class, and under PAGA; claims invoked Labor Code provisions and IWC Wage Order 16.
- Doty Bros. moved to compel arbitration under the CBA’s grievance/arbitration Article V; trial court compelled arbitration of individual and class claims but severed and stayed the PAGA claim as nonarbitrable.
- The parties agreed the superior court (not the arbitrator) would decide whether the CBA authorized classwide arbitration; on March 23, 2015 the court concluded the CBA did not authorize class arbitration and dismissed class claims.
- Cortez appealed; while the appeal was pending he voluntarily dismissed his PAGA claim and filed a new appeal. Jurisdictional questions arose about the death knell doctrine and whether the earlier arbitration order was reviewable.
- The Court of Appeal treated the consolidated appeal as a writ petition to consider the merits and held: (1) most wage-and-hour claims that enforce Wage Order 16 (CAUSES 1–5) are arbitrable under the CBA; (2) Labor Code § 203 penalties for post-termination pay (cause 6) and the UCL claim based on that violation (cause 7) are not covered by the CBA and thus not arbitrable; and (3) the CBA does not authorize classwide arbitration, so dismissal of class claims was proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court’s March 23, 2015 dismissal of class claims was immediately appealable under the "death knell" doctrine while a PAGA claim remained pending | Death-knell applies; order terminating class claims is appealable even with PAGA claim pending | PAGA claim preserves plaintiff’s incentive to proceed so death-knell does not apply | Death-knell inapplicable when PAGA claim remains pending; order was not appealable at that time |
| Whether Cortez’s later voluntary dismissal of PAGA revived appealability or rendered the earlier order timely on new appeal | Voluntary dismissal sounded the death knell and made the prior dismissal appealable; new notice of appeal perfected review | Dismissal cannot retroactively create appealability or toll appeal deadlines | Court declined to resolve novel jurisdictional timing questions and exercised discretion to treat the appeal as a writ petition to reach merits |
| Whether the CBA’s arbitration clause (referring to disputes “arising from Wage Order 16”) clearly and unmistakably waived judicial forum for Labor Code claims enforcing Wage Order 16 | CBA does not mention Labor Code; waiver not clear and unmistakable for statutory claims | CBA explicitly requires arbitration of disputes arising under Wage Order 16; claims enforcing Wage Order 16 necessarily implicate Labor Code and are arbitrable | First–fifth causes (overtime, meal/rest breaks, recordkeeping) arise under Wage Order 16 and are arbitrable; sixth (Lab. Code §203 post-termination pay penalties) and related UCL claim are not covered and not arbitrable |
| Whether the CBA authorizes classwide arbitration or whether NLRA §7/§8 prevents excluding class arbitration from a CBA | NLRA’s protection of collective activity forbids disclaimers of classwide remedies; class arbitration waiver invalid | CBA language contemplates individual grievances; silence on class arbitration means no class arbitration; Iskanian and state law permit excluding class arbitration | CBA does not manifest agreement to class arbitration; dismissal of class claims was proper; NLRA argument rejected under California precedent |
Key Cases Cited
- In re Baycol Cases I & II, 51 Cal.4th 751 (Cal. 2011) (explains the death-knell doctrine allowing appeal from orders terminating class claims in some circumstances)
- Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA claims are nonwaivable; NLRA does not bar excluding class claims from CBA arbitration)
- Penn Plaza v. Pyett, 556 U.S. 247 (U.S.) (statutory claims may be subject to arbitration under a CBA only if waiver of judicial forum is "clear and unmistakable")
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (U.S.) (class arbitration cannot be imposed absent contractual basis showing parties agreed to class arbitration)
- Mendez v. Mid-Wilshire Health Care Ctr., 220 Cal.App.4th 534 (Cal. Ct. App.) (arbitration is a matter of contract; clear textual reference required to show waiver of statutory judicial forum)
- Auto Equity Sales, Inc. v. Superior Court, 57 Cal.2d 450 (Cal. 1962) (appellate courts must follow controlling decisions of the state supreme court)