Tovar v. Windsor Convalescent and Rehab. Center etc. CA4/3
G060386
| Cal. Ct. App. | Dec 9, 2021Background
- Reina Tovar (former RN) signed Windsor’s arbitration "Policy" and "Agreement" when hired; documents included a class/representative action waiver and a clause stating an arbitrator’s factual/legal determinations would be binding in later court proceedings.
- Tovar filed a putative class action and a representative PAGA claim alleging multiple Labor Code violations and refused Windsor’s demand to arbitrate individual claims.
- Windsor moved to compel arbitration of individual claims, strike class allegations, sever the PAGA-waiver and preclusive clauses, and stay the PAGA claim pending arbitration.
- The trial court severed and struck the PAGA-waiver and the clause giving arbitrator findings preclusive effect, compelled arbitration of Tovar’s individual claims, struck the class allegations, and stayed the PAGA claim.
- Tovar appealed arguing the whole arbitration agreement was tainted by unconscionability (bad‑faith inclusion of an illegal PAGA waiver) and sought review; the Court of Appeal dismissed the appeal as nonappealable and declined to treat it as a writ. The court cautioned employers about violating Iskanian.
Issues
| Issue | Plaintiff's Argument (Tovar) | Defendant's Argument (Windsor) | Held |
|---|---|---|---|
| Appealability under the death‑knell doctrine | Striking class claims while leaving individual claims and only a stayed PAGA claim amounts to a de facto dismissal of the class and is immediately appealable | Order compelling arbitration is interlocutory and not appealable; death‑knell inapplicable because PAGA representative claim remains | Not appealable: death‑knell does not apply because a representative PAGA claim remains and preserves incentives to pursue judgment |
| Treat appeal as writ of mandate | If appeal is not permitted, court should convert the appeal into a writ due to importance and alleged bad faith | Writ review is discretionary and should be sparingly used; no extraordinary circumstances | Court declines to treat the appeal as a writ petition; no unusual circumstances shown |
| Enforceability of arbitration agreement given PAGA waiver and preclusive clause | Agreement is unconscionable and tainted because Windsor knowingly included an unlawful PAGA waiver and a backdoor preclusion clause, so entire agreement should be unenforceable | Agreement is not unconscionable; if a provision is invalid it should be severed and the remainder enforced; Windsor did not seek to enforce the PAGA waiver | Court did not reach the substantive merits (no appealable order), but severed the PAGA‑waiver and preclusion clauses and compelled arbitration of individual claims; court warned employers that continued noncompliance with Iskanian risks unenforceability |
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)
- Baycol Cases I & II, 51 Cal.4th 751 (2011) (death‑knell doctrine applies only where order amounts to de facto final judgment for absent class members)
- Nguyen v. Applied Medical Resources Corp., 4 Cal.App.5th 232 (2016) (death‑knell inapplicable where PAGA claim remains after class claims are struck)
- Munoz v. Chipotle Mexican Grill, Inc., 238 Cal.App.4th 291 (2015) (discusses rare use of writs to review arbitration orders and death‑knell rationale)
- Cortez v. Doty Bros. Equipment Co., 15 Cal.App.5th 1 (2017) (PAGA representative claim precludes death‑knell appealability when class claims are dismissed)
- ZB, N.A. v. Superior Court, 8 Cal.5th 175 (2019) (explains scope of recoverable remedies under PAGA)
- Armendariz v. Foundation Health Psychcare Servs., Inc., 24 Cal.4th 83 (2000) (a party may waive arbitration rights through bad faith or willful misconduct)