Tanguilig v. Bloomingdale's, Inc., 5 Cal. App. 5th 665

Background

Bernadette Tanguilig, a Bloomingdale’s employee, filed a representative PAGA action alleging multiple Labor Code violations and seeking civil penalties on behalf of the state and other employees.
Bloomingdale’s moved to compel arbitration under an employment dispute-resolution Agreement that required arbitration of all employment disputes and barred consolidation/class/collective arbitrations; the Agreement included an opt-out procedure.
The trial court denied Bloomingdale’s motion, ruling the Agreement’s waiver of representative PAGA claims unenforceable under California law (Iskanian).
Bloomingdale’s appealed, arguing Iskanian was wrongly decided and that at minimum Tanguilig’s “individual” PAGA claims should be arbitrated.
The Court of Appeal affirmed: it held Iskanian binds the court, the representative-action waiver is unenforceable and, regardless of whether an individual PAGA claim exists, PAGA claims cannot be compelled to arbitration without the state’s consent.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a predispute arbitration agreement can waive an employee’s right to bring representative PAGA claims	Tanguilig: such waivers are unenforceable under Iskanian; PAGA suits are representative and for the state	Bloomingdale’s: Iskanian was wrongly decided or inapplicable here (opt-out existed); waiver should be enforced	Waiver unenforceable; Iskanian controls and FAA does not preempt the state rule forbidding PAGA waivers
Whether the court should follow Iskanian despite subsequent federal decisions (e.g., DIRECTV)	Tanguilig: Iskanian remains binding and consistent with FAA; subsequent federal cases don’t undermine it	Bloomingdale’s: DIRECTV shows state rules cannot be applied to arbitration clauses differently, undermining Iskanian	Iskanian remains binding; DIRECTV is distinguishable and does not nullify Iskanian’s reasoning
Whether an "individual" PAGA claim (plaintiff-only) is arbitrable separately from the representative component	Tanguilig: PAGA is inherently representative; claim cannot be split; no individual PAGA arbitration	Bloomingdale’s: If representative portion is not arbitrable, the individual portion should be sent to arbitration	Court assumes but does not decide cognizability of an individual-only PAGA cause; regardless, PAGA claims (individual or representative) cannot be compelled to arbitration without the state’s consent
Whether compelling arbitration of individual PAGA penalties conflicts with PAGA’s enforcement purpose and FAA	Tanguilig: PAGA is a qui tam–style enforcement action for the state; FAA’s private-arbitration aims don’t apply	Bloomingdale’s: Permitting arbitration of individual penalties but not PAGA is absurd/inconsistent	Court: No conflict—PAGA is principally a dispute with the state (real party in interest); arbitration requires the state’s consent, so private predispute waivers cannot compel PAGA arbitration

Key Cases Cited

Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA representative-waiver rule; PAGA actions are representative/qui tam for the state and nonwaivable)
Arias v. Superior Court, 46 Cal.4th 969 (Cal. 2009) (PAGA framework and procedural notice requirements)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (FAA preemption of state rules that categorically prohibit class arbitration)
EEOC v. Waffle House, Inc., 534 U.S. 279 (U.S. 2002) (agency enforcement actions cannot be compelled to arbitration based on victim’s arbitration agreement)
DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (U.S. 2015) (limits on construing arbitration contracts to incorporate state law as-if-not-preempted)
Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425 (9th Cir. 2015) (agreeing Iskanian’s federal-law analysis is correct; PAGA waivers unenforceable)
Brown v. Ralphs Grocery Co., 197 Cal.App.4th 489 (Cal. Ct. App. 2011) (discussing limitations of single-claimant PAGA arbitrations)