Winns v. Postmates Inc.
A155717
| Cal. Ct. App. | Jul 20, 2021Background
- Postmates required couriers who used its app after March 1, 2017 to accept a Fleet Agreement containing a mutual arbitration clause and a "Representative Action Waiver" precluding representative or class arbitration; couriers had a 30‑day opt‑out right which the three plaintiffs did not use.
- Plaintiffs (Winns, Hickey, Logan) sued Postmates alleging wage‑related Labor Code violations, including a PAGA representative action seeking civil penalties on behalf of the state.
- Postmates moved to compel arbitration of individual claims and to stay or compel arbitration of the PAGA claim, arguing Epic Systems and later U.S. Supreme Court decisions effectively overruled Iskanian and required enforcement of the waiver.
- The trial court compelled individual arbitration but denied Postmates’ petition to compel arbitration of the PAGA claim, relying on Iskanian v. CLS Transportation (holding PAGA waivers unenforceable) and on the agreement’s explicit bar to arbitrating representative actions.
- On appeal Postmates limited its challenge to the denial as to the PAGA claim; the Court of Appeal affirmed, holding Iskanian remains controlling and Epic Systems/Harry Schein/Lamps Plus did not address or overrule Iskanian’s reasoning.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of pre‑dispute PAGA waivers | Iskanian: PAGA waivers are unenforceable as contrary to public policy and harm state enforcement interests | Waiver should be enforced per arbitration agreement terms | Waiver unenforceable under Iskanian; PAGA claim not compelled to arbitration |
| Whether Epic Systems (and later U.S. Supreme Court decisions) overruled Iskanian | Iskanian remains controlling; Epic did not address PAGA’s public‑enforcement character | Epic Systems (and Harry Schein, Lamps Plus) effectively abrogated Iskanian and require enforcement | Epic and the other decisions do not decide the same question; Iskanian controls |
| Effect of opt‑out provision/voluntary assent | Plaintiffs’ failure to opt out does not validate a PAGA waiver because Iskanian’s rule rests on public‑policy and state interest, not voluntariness | Because arbitration and waiver were optional (opt‑out available), plaintiffs consented and waiver is enforceable | Opt‑out availability is irrelevant; Iskanian does not turn on mandatory vs voluntary assent |
| FAA preemption and savings clause applicability | PAGA claims lie outside FAA coverage because they are actions on behalf of the state; FAA doesn’t preempt state rule invalidating PAGA waivers | FAA (and its savings clause jurisprudence) displaces state rule; generally applicable defenses or FAA principles require enforcement | Court holds FAA does not preempt Iskanian: PAGA actions are public enforcement claims and not within FAA’s private‑dispute focus |
Key Cases Cited
- Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA waivers unenforceable; PAGA actions are public enforcement claims and FAA does not preempt)
- Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (U.S. 2018) (FAA enforces arbitration agreements and class/collective waivers; did not address PAGA)
- Harry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (U.S. 2019) (rejects "wholly groundless" exception to arbitrability when parties delegate that question to arbitrator)
- Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (U.S. 2019) (FAA preempts state contra proferentem rule when used to infer consent to class arbitration)
- Correia v. NB Baker Electric, Inc., 32 Cal.App.5th 602 (Cal. Ct. App. 2019) (rejects argument that Epic Systems overruled Iskanian; state is real party in PAGA actions)
- Collie v. Icee Co., 52 Cal.App.5th 477 (Cal. Ct. App. 2020) (reaffirms that PAGA waivers remain unenforceable absent state consent)