CALIFORNIA CLASS ACTION LAW

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The Court of Appeal for the First District granted plaintiff’s motion to dismiss an appeal, where the employer appellant sought review of a trial court order that did not compel an employee to arbitrate her PAGA claims.  Reyes v. Macy’s, Inc., No. A133411, 202 Cal.App.4th 1119 (1st Dist. Dec. 21, 2011).  The court held that the portion of the trial court’s order that failed to compel employee to arbitrate her class claims and PAGA claims was not immediately appealable; and plaintiff’s PAGA claim was not an individual claim and thus was not within the scope of arbitration request.  Id. (holding that the order granting Defendant’s own motion to compel arbitration of the individual claims “is not appealable, and the remainder of the order denying the motion to dismiss representative [PAGA] claims is not a final judgment and, therefore, also is not appealable . . . .”).

Background

Plaintiff and respondent Reyes brought action against her employer Macy’s, alleging numerous class action labor code violations and a cause of action under the Labor Code Private Attorneys General Act of 2004 (“PAGA”), as well as individual claims for discrimination, harassment, and retaliation.  Id.

In the trial court, Macy’s filed a “motion to compel arbitration on an individual basis, dismiss class allegations, and stay civil action,” asking the court to enforce the parties’ agreement to arbitrate, compel the plaintiff to arbitrate individual claims, dismiss class/representative claims and, if the motion were granted, stay the proceedings until arbitration is completed.  Id.  San Francisco Superior Court Judge Charlotte Walter Woolard held that:

All of plaintiff’s individual claims are severed and are subject to arbitration.   These individual claims are to proceed to arbitration.   Plaintiff’s class claims and PAGA claims, and discovery related to those claims, are stayed and shall remain in this court until the individual claims are arbitrated.

Macy’s filed a notice of appeal and plaintiff has moved to dismiss the appeal.

Discussion

An “order granting a motion to compel arbitration is not an appealable order.” Id. (citing Abramson v. Juniper Networks, Inc., 115 Cal.App.4th 638, 648-49 (2004)).  Macy’s argued that an order denying or dismissing a motion to compel arbitration is an appealable order, and “attempt[ed] to justify the present appeal by arguing that by refusing to compel plaintiff to arbitrate her class claims and the claim for penalties under PAGA, the trial court partially denied the motion to compel arbitration, rendering the order appealable.”  Id.  The court did not agree:

Neither literally nor functionally  did Macy’s request the trial court to compel the arbitration of these claims, nor did the court refuse to do so.   Macy’s moved the trial court “to dismiss Reyes’ class allegations set forth in her second amended complaint.”   Macy’s contention is not that the representative claims should be arbitrated, but that they should be dismissed.   The trial court stayed the class and PAGA claims; it has not yet determined whether some or all of these claims should eventually be dismissed or may warrant judicial relief.

Macy’s further argued that plaintiff’s PAGA claim sought relief for herself as well as for other employees and that the court’s order therefore is effectively a denial of the request to arbitrate her individual claim under PAGA.  The court disagreed, noting that “plaintiff may not and does not bring the PAGA claim as an individual claim, but as the proxy or agent of the state’s labor law enforcement agencies.” Id. (internal quotation omitted).

Although plaintiff’s complaint alleges, in conformity with the statutory language, that “as an aggrieved employee, [she] hereby seeks recovery of civil penalties as prescribed by the Labor Code Private Attorney General Act of 2004 on behalf of herself and other current and former employees of Defendant against whom one or more of the violations of the Labor Code was committed,” the claim is not an individual one. A plaintiff asserting a PAGA claim may not bring the claim simply on his or her own behalf but must bring it as a representative action and include “other current or former employees.”

Id.

The Court concluded that “[b]ecause the PAGA claim is not an individual claim, it was not within the scope of Macy’s request that individual claims be submitted to arbitration and the court’s order may not be construed as a denial of any such request.” Id.

Judges and Attorneys

Associate Justice Stuart R. Pollak wrote the opinion for the court.

Administrative Presiding Justice William R. McGuiness and Associate Justice Martin J. Jenkins concurred.

The trial court judge was Hon. Charlotte Walter Woolard of the San Francisco Superior Court.

Daniel H. Qualls, Robin G. Workman, Aviva N. Roller, Qualls & Workman, L.L.P., San Francisco, for plaintiff and respondent.

David S. Bradshaw, Jackson Lewis, L.L.P., Sacramento, Betty Thorne Tierney, Brian M. Parsons, for defendants and appellants.

By CHARLES JUNG