35 Cal. App. 5th 838
Cal. Ct. App. 5th2019Background
- Plaintiff Nunez sued employer Nevell for wage-and-hour claims and sought to represent a class of ~2,686 workers; claims alleged Labor Code and UCL violations tied to Wage Order 16.
- Nevell was party to a CBA that incorporated Wage Order 16 and provided that wage-order disputes are subject to the CBA’s grievance and arbitration procedures.
- The trial court twice gave Nevell deadlines to move to compel arbitration; Nevell missed both deadlines and later expressly told the court in writing it elected not to proceed with a petition to compel arbitration.
- After Nevell’s written election, parties engaged in class discovery, including court orders to produce putative class contact information and issuance of Belaire‑West notices; Nunez prepared a class-based damages valuation and mediation demand.
- The Court of Appeal issued Cortez (15 Cal.App.5th 1) in Aug–Oct 2017 holding CBA language requiring arbitration of Wage Order 16 claims covers Labor Code claims that enforce the wage order.
- Nevell filed a motion to compel arbitration in April 2018 (over three years after suit began and ~8 months after Cortez); the trial court denied the motion as waived and prejudicial; this appeal was affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nevell waived the right to compel arbitration | Nevell waived by expressly electing not to file petition and by invoking litigation steps inconsistent with arbitration | Nevell argued it could not have succeeded earlier because Cortez changed the law, so delay was excusable | Court held Nevell explicitly and impliedly waived arbitration; waiver upheld |
| Whether engaging in class discovery and sending Belaire‑West notices prejudiced plaintiffs | These steps imposed significant litigation cost and reliance; arbitration now would be prejudicial | Nevell claimed prejudice argument is negated because Cortez postdated earlier opportunities to move | Court found plaintiffs prejudiced by delay and litigation steps taken after Nevell’s written election not to arbitrate |
| Whether Cortez represented a change in controlling law excusing delay | Nunez argued Cortez merely applied existing law that wage‑order arbitration covers Labor Code claims | Nevell argued Cortez changed law and therefore earlier motion would have failed | Court ruled Cortez did not change the law; precedent already supported Cortez’s reasoning |
| Whether factors in St. Agnes support denying motion to compel (e.g., substantial invocation of litigation, delay) | Nunez pointed to missed deadlines, discovery, motions, notices, and mediation | Nevell emphasized previous written arbitration demand and affirmative defense invoking arbitration | Court applied St. Agnes factors and found multiple grounds (explicit waiver, delay, invoked litigation, prejudice) to deny arbitration |
Key Cases Cited
- St. Agnes Medical Center v. PacifiCare of California, 31 Cal.4th 1187 (2003) (sets factors for waiver and review standard for denial of motion to compel arbitration)
- Cortez v. Doty Bros. Equipment Co., 15 Cal.App.5th 1 (2017) (CBA language requiring arbitration of Wage Order 16 disputes covers Labor Code claims enforcing the wage order)
- Vasquez v. Superior Court, 80 Cal.App.4th 430 (2000) (CBA must clearly and unmistakably waive judicial forum for statutory discrimination claims)
- Martinez v. Combs, 49 Cal.4th 35 (2010) (employees enforcing wage orders do so via Labor Code; wage order protections enforced through statutory claims)
- Flowers v. Los Angeles County Metropolitan Transportation Authority, 243 Cal.App.4th 66 (2015) (court recognition that wage‑order enforcement is effectuated through Labor Code claims)
- Vasserman v. Henry Mayo Newhall Memorial Hospital, 8 Cal.App.5th 236 (2017) (distinguishes agreements to pay statutory penalties from clear waiver of judicial forum for statutory claims)