Julian v. Glenair, Inc.
B277064
| Cal. Ct. App. | Nov 27, 2017Background
- Plaintiffs Malissa and Machele Julian were hourly employees of Glenair and received a proposed "Glenair Dispute Resolution Program" arbitration agreement in July 2014 that required opting out within 30 days; they did not opt out.
- The proposed agreement covered broad employment-related claims and referenced an ongoing Rojas action that then included a PAGA claim.
- Plaintiffs were later terminated and in April 2015 provided notice to the LWDA (triggering PAGA procedural steps); in October 2015 they filed a representative PAGA action seeking civil penalties on behalf of themselves and other employees.
- Glenair petitioned to compel arbitration under the distributed agreement; the trial court denied the petition, concluding the agreement was unenforceable to compel the PAGA claim.
- On appeal, Glenair argued the agreement was an enforceable postdispute waiver (per Iskanian's allowance of postdispute waivers), while plaintiffs argued the agreement was a predispute waiver and therefore unenforceable under Iskanian and public-policy principles.
- The Court of Appeal affirmed, holding the July 2014 agreement was a predispute waiver with respect to the Julians’ PAGA claim and therefore unenforceable to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration agreement can compel arbitration of a PAGA representative claim | The Julians argued the agreement was a predispute waiver executed before they were authorized as the state’s agents and thus unenforceable | Glenair argued the agreement functioned as a postdispute waiver (given the Rojas litigation and described PAGA claims) and therefore could be enforced to arbitrate the PAGA claim | Held: The agreement was a predispute waiver as to the Julians’ PAGA claim (signed before they satisfied PAGA notice/authorization) and unenforceable to compel arbitration |
| Whether employees can be compelled to arbitrate PAGA claims absent LWDA consent when they signed arbitration agreements before meeting PAGA procedural requirements | Plaintiffs: Pre-authorization signings do not bind the state’s enforcement interest; employees lacked authority to waive the state’s forum choice | Glenair: Notice of the Rojas action and description of alleged violations converted the agreement into a postdispute waiver covering similar claims | Held: Individual employees are not state agents until they satisfy PAGA statutory steps; predispute arbitration agreements signed earlier cannot bind PAGA claims |
| Whether Iskanian permits enforcement of postdispute waivers of PAGA claims in these circumstances | Plaintiffs: Iskanian invalidates predispute waivers; postdispute waivers require the employee actually be in a position to make a knowing, voluntary choice (i.e., authorized agent status) | Glenair: Read Iskanian as allowing postdispute waivers once a related action exists and employees have notice | Held: Iskanian supports the distinction but requires the employee to have authority (after PAGA procedural compliance) to be able to knowingly waive; Julians did not have that status when they received the agreement |
| Whether the Rojas action’s PAGA claim meant all employees thereafter faced a "postdispute" situation | Plaintiffs: Each employee must individually satisfy PAGA notice/procedural requirements; one employee’s PAGA authorization does not convert others’ prior agreements into postdispute waivers | Glenair: The Rojas complaint and described violations put employees on notice so the July 2014 agreement was effectively postdispute | Held: Rejected Glenair; each employee’s waiver status is judged by when that employee became authorized as the state’s agent, not by another plaintiff’s status |
Key Cases Cited
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (2014) (predispute waivers of representative PAGA claims are contrary to public policy and unenforceable; FAA does not preempt that rule)
- Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83 (2000) (mandatory employment arbitration may be enforceable if postdispute or if procedural protections preserve statutory rights; postdispute agreements may involve voluntary trade-offs)
- Arias v. Superior Court, 46 Cal.4th 969 (2009) (PAGA actions are representative actions serving as a procedural substitute for government enforcement; LWDA initially controls penalty enforcement)
- Betancourt v. Prudential Overall Supply, 9 Cal.App.5th 439 (2017) (predispute arbitration agreement ineffective to compel arbitration of PAGA claim because employee lacked authority to waive state’s claim)
- Tanguilig v. Bloomingdale’s, Inc., 5 Cal.App.5th 665 (2016) (PAGA claim cannot be arbitrated pursuant to a predispute arbitration agreement absent state consent)