Cortez v. Doty Bros. Equipment Co.
B275255M
| Cal. Ct. App. | Sep 6, 2017Background
- Cortez, a Teamsters member, sued former employer Doty Bros. for wage-and-hour violations on behalf of himself and a putative class and also asserted a PAGA representative claim.
- A collective bargaining agreement (CBA) between Doty Bros. and the union included Article V grievance/arbitration procedures and a clause requiring disputes “arising from” IWC Wage Order 16 to be processed under that Article.
- Doty Bros. petitioned to compel arbitration; the trial court (Sept. 19, 2014) compelled arbitration of Cortez’s individual claims but stayed/severed his PAGA claim and left class-arbitrability to be decided later.
- The parties later agreed the trial court would decide whether the CBA authorized classwide arbitration; on March 23, 2015 the court ruled the CBA did not authorize classwide arbitration and dismissed class claims.
- Cortez appealed but, amid jurisdictional uncertainty due to the pending PAGA claim and the “death knell” doctrine, the Court of Appeal treated the consolidated appeal as a writ petition and reached the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the March 23, 2015 dismissal of class claims was immediately appealable under the death knell doctrine when a PAGA claim remained pending | Cortez: death knell applies or his later voluntary dismissal of PAGA makes the old order appealable | Doty Bros: pending PAGA claim defeats death knell; dismissal not immediately appealable | Death knell inapplicable while PAGA claim pending; appellate court avoided resolving all jurisdictional questions and treated the matter as a writ petition |
| Whether the CBA’s arbitration clause clearly and unmistakably waived a judicial forum for Cortez’s Labor Code claims arising from Wage Order 16 | Cortez: CBA mentions Wage Order 16 but does not cite Labor Code; waiver not explicit for statutory claims | Doty Bros: clause covers disputes arising from Wage Order 16; Labor Code enforcement necessarily enforces the wage order, so claims are arbitrable | First through fifth causes (overtime, meal/rest breaks, recordkeeping tied to Wage Order 16) are arbitrable; waiver was explicit as to Wage Order 16–based claims |
| Whether Labor Code claims for penalties for failure to timely pay wages on termination (Lab. Code §§ 202–203) and related UCL claim are encompassed by the CBA arbitration clause | Cortez: these statutory termination-pay claims are not covered by Wage Order 16 and thus not arbitrable | Doty Bros: those claims are wage-related and should be arbitrated | Sixth (timely post-termination pay) and seventh (UCL based on that violation) causes are not within Wage Order 16 and are not subject to arbitration; trial court’s original order compelling arbitration of these was vacated |
| Whether the CBA authorizes classwide arbitration or whether NLRA protections render a class-waiver invalid | Cortez: NLRA protects collective action and bars class-waivers; class arbitration should be allowed | Doty Bros: CBA’s silence regarding class arbitration means no class arbitration; NLRA does not render such contractual terms invalid | CBA does not contemplate classwide arbitration; dismissal of class claims was proper; the NLRA argument rejected consistent with California Supreme Court precedent |
Key Cases Cited
- In re Baycol Cases I & II, 51 Cal.4th 751 (California Supreme Court 2011) (death knell doctrine allows immediate appeal of orders effectively terminating class claims)
- Munoz v. Chipotle Mexican Grill, Inc., 238 Cal.App.4th 291 (California Court of Appeal 2015) (death knell inapplicable when representative PAGA claim remains)
- Miranda v. Anderson Enterprises, Inc., 241 Cal.App.4th 196 (California Court of Appeal 2015) (same conclusion on death knell and pending PAGA)
- Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (California Supreme Court 2014) (PAGA claims are representative and generally not waivable; court retained PAGA claims from arbitration)
- Penn Plaza LLC v. Pyett, 556 U.S. 247 (U.S. Supreme Court 2009) (a CBA can waive a judicial forum for statutory claims only by a clear and unmistakable waiver)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (U.S. Supreme Court 2010) (parties must have contracted to authorize class arbitration; silence does not imply consent)
- Wright v. Universal Maritime Service Corp., 525 U.S. 70 (U.S. Supreme Court 1998) (CBAs may bind employees to arbitrate disputes over interpretation/enforcement of the agreement)
- Martinez v. Combs, 49 Cal.4th 35 (California Supreme Court 2010) (wage orders and Labor Code interact; enforcing wage order protections typically requires statutory claims)
- Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728 (U.S. Supreme Court 1981) (limitations on union waiver of certain statutory rights; discussed in context of waiver doctrine)