Williams v. RGIS, LLC
C091253
| Cal. Ct. App. | Oct 18, 2021Background
- Plaintiff Carllie Williams worked for RGIS as an hourly employee (May–Dec 2018) and signed RGIS’s electronic dispute-resolution booklet on hire.
- The booklet set a five-step program culminating in mandatory, binding arbitration for claims unless the employee opted out within 60 days; Williams did not opt out.
- The arbitration provision contained an express waiver of class and PAGA representative actions, limiting any PAGA-related dispute to individual arbitration.
- Williams filed a PAGA-only complaint seeking civil penalties for Labor Code violations; RGIS moved to compel individual arbitration and stay court proceedings.
- The trial court denied the motion, relying on Iskanian v. CLS (holding PAGA representative waivers unenforceable and not preempted by the FAA); RGIS appealed arguing Epic Systems abrogated Iskanian.
- The Court of Appeal affirmed the denial, concluding Epic Systems did not address or overrule Iskanian and that PAGA waivers remain unenforceable even when an opt-out was available.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of PAGA representative-waiver in arbitration agreement | Williams: PAGA waiver is unenforceable as contrary to public policy because PAGA deputizes employees to enforce the state’s interest | RGIS: FAA requires enforcement of individual-arbitration and waiver of representative PAGA claims | Held: Waiver unenforceable under Iskanian; FAA does not preempt that rule |
| Whether Epic Systems abrogated Iskanian | Williams: Epic Systems does not govern PAGA because PAGA is a qui tam/state-enforcement claim | RGIS: Epic Systems requires enforcement of individualized arbitration provisions and thus abrogates Iskanian | Held: Epic Systems addressed NLRA/FLSA/class/collective claims and did not decide the PAGA issue; Iskanian remains controlling |
| Effect of pre-dispute opt-out right on waiver enforceability | Williams: Opportunity to opt out does not validate a pre-dispute PAGA waiver | RGIS: Because employees could opt out, the waiver is voluntary and enforceable | Held: Opt-out option does not place agreement outside Iskanian; waiver still unenforceable |
| Persuasive force of lower federal decisions and trend | Williams: State precedent controls; Supreme Court has not overruled Iskanian | RGIS: Some federal trial court decisions suggest future Supreme Court reversal; Ninth Circuit decision Sakkab sided with Iskanian but could be revisited | Held: Court follows California Supreme Court precedent (Iskanian); speculative federal trend does not change binding state law |
Key Cases Cited
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA representative-waivers violate public policy and are not preempted by the FAA)
- Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (U.S. 2018) (FAA requires enforcement of individualized arbitration agreements as to class/collective waiver; addressed NLRA conflict)
- Correia v. NB Baker Electric, Inc., 32 Cal.App.5th 602 (Cal. Ct. App. 2019) (Epic Systems did not overrule Iskanian; PAGA waiver analysis different)
- Collie v. The Icee Co., 52 Cal.App.5th 477 (Cal. Ct. App. 2020) (PAGA is a representative/state-enforcement claim outside FAA coverage for waivers)
- ZB, N.A. v. Superior Court, 8 Cal.5th 175 (Cal. 2019) (distinguishes victim-specific relief from PAGA penalties and cites Iskanian)
- Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425 (9th Cir. 2015) (affirmed Iskanian’s reasoning at the federal appellate level)
- Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83 (Cal. 2000) (discusses voluntariness and post-dispute waiver contexts for arbitration agreements)