Garrido v. Air Liquide Industrial U.S. LP
194 Cal. Rptr. 3d 297
Cal. Ct. App.2015Background
- Mario Garrido, a truck driver for Air Liquide, signed an ADR agreement at hiring requiring arbitration of employment disputes and expressly stating the agreement is governed by the Federal Arbitration Act (FAA); it also contained a class/collective/representative-action waiver.
- Garrido was terminated and filed a class action alleging Labor Code violations (meal breaks, wage statements, waiting-time penalties) and UCL claims.
- Air Liquide moved to compel individual arbitration; Garrido opposed, arguing the FAA §1 exemption for transportation workers applies and, if the FAA does not govern, the California Arbitration Act (CAA) controls and the class waiver is unenforceable under Gentry.
- Trial court denied the motion to compel, finding the class waiver invalid under Gentry; Air Liquide appealed.
- The Court of Appeal held (1) Garrido is a transportation worker exempt from the FAA, (2) the CAA applies in the FAA’s absence, (3) Gentry’s public-policy rule against certain employment class waivers remains viable under the CAA (Iskanian did not abolish Gentry outside FAA-governed cases), and (4) substantial evidence supported application of Gentry’s four-factor test to invalidate the class waiver; therefore the denial of the motion to compel individual arbitration was affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FAA governs the ADR agreement | FAA §1 exempts transportation workers; Garrido is a truck driver and thus exempt | ADR agreement expressly states it is governed by the FAA, so FAA applies | FAA does not apply; Garrido is a transportation worker and §1 exemption controls despite the agreement’s language |
| Whether the CAA can govern if the FAA does not | CAA governs even if not expressly referenced; lack of FAA means California law applies | Air Liquide initially relied on FAA but argued CAA applies after FAA challenge | CAA applies; an agreement need not expressly reference the CAA to be governed by it |
| Whether Gentry’s rule invalidating certain employment class waivers survives after Concepcion/Iskanian when FAA does not apply | Gentry remains good law under the CAA because Iskanian held only that FAA preempts Gentry when the FAA governs | Iskanian and Concepcion abrogated Gentry entirely | Gentry remains applicable under the CAA; Iskanian preempts Gentry only where the FAA governs |
| Whether the class-waiver should be invalidated under Gentry’s four-factor test | Garrido: small individual recoveries, retaliation risk, lack of worker knowledge, and other obstacles make class arbitration necessary | Air Liquide: class waiver enforceable; move limited to individual arbitration | Court affirmed trial court: substantial evidence supported all four Gentry factors; class waiver unenforceable and motion to compel individual arbitration denied |
Key Cases Cited
- Gentry v. Superior Court, 42 Cal.4th 443 (Cal. 2007) (establishing four-factor test for invalidating employment class-waivers under California public policy)
- Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (holding the FAA preempts Gentry when the FAA governs employment arbitration agreements)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (FAA preemption of state rules forbidding class-waiver enforcement in arbitration)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (U.S. 2001) (interpreting FAA §1 exemption to cover transportation workers)
- Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (Cal. 2000) (CAA may render arbitration provisions unenforceable when they violate public policy)
- International Brotherhood of Teamsters Local Union No. 50 v. Kienstra Precast, LLC, 702 F.3d 954 (7th Cir. 2012) (truck drivers crossing state lines are transportation workers under FAA §1)