Plaintiffs, employees of a healthcare staffing company, filed a putative class action and representative PAGA suit alleging various wage and hour violations. Defendant’s motion to compel arbitration was denied by the trial court, which found the arbitration agreement, when read with the employment agreement, unconscionable and wholly unenforceable due in part to forcing employee claims into arbitration while permitting defendant to litigate. Defendant appealed.

The Court of Appeal affirmed the denial of the motion to compel arbitration. Following Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482, it held that the arbitration and employment agreements must be read together under Civ. Code § 1642. It rejected Defendant’s argument that the trial court erred by failing to consider the parties’ subjective intent and its argument that contracts need to explicitly cross-reference or necessarily depend on each other while having the same consideration to be taken together under § 1642. The Court of Appeal also rejected a “clear and unequivocal” standard for construing instruments together under § 1642, and held that the supersession clause in the employment agreement allowed the two agreements to be read together despite apparently contradictory terms. 

The court then found “notable substantive unconscionability,” citing the combined agreement’s imbalanced arbitration obligations, nonmutual attorney fees provisions, and injunctive relief available solely to Defendant. It declined to address whether the employment agreement’s unlawful salary disclosure restriction added to unconscionability. Finally, it determined the trial court did not abuse its discretion by refusing to sever the unconscionable sections, holding that California’s severance doctrine may apply to FAA-governed arbitration agreements and that severance would not serve justice.

Full opinion

Plaintiff sued alleging disability discrimination, whistleblower retaliation, and other violations following her termination. The trial court denied Defendant’s motion to compel arbitration, finding the arbitration agreement procedurally unconscionable due to pressure on Plaintiff to sign it, and substantively unconscionable because the agreement did not allow judicial review of the arbitration award. Defendant appealed.

The Court of Appeal affirmed the denial of the motion to compel arbitration. It found the agreement procedurally unconscionable due to its adhesive nature, Plaintiff’s limited review opportunity, and an HR manager’s misrepresentations about the agreement. Citing OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, the Court of Appeal held that strong procedural unconscionability, particularly when combined with the defendant’s express misleading of the plaintiff, also rendered the agreement substantively unconscionable. Given these findings, the court determined it did not need to address whether the agreement unlawfully prohibited judicial review, as the agreement was already unenforceable.

Full opinion

The parties’ arbitration agreement excluded representative PAGA claims. Plaintiff then brought a PAGA claim alleging off-the-clock work. Defendant moved to compel arbitration of individual PAGA claims and dismiss the representative portion. The trial court denied the motion, interpreting the parties’ arbitration agreement to exclude Plaintiff’s individual PAGA claims. Defendant appealed.

The Court of Appeal affirmed the denial of Defendant’s motion to compel arbitration. The parties disputed whether “representative” referred to all PAGA claims or just non-individual ones. Defendant argued that the court should apply the FAA’s presumption of arbitrability, while Plaintiff argued that the trial court correctly resolved the ambiguity against the drafter. The court found based on noscitur a sociis that the parties intended a broad construction of the PAGA carve-out. It also noted that when the agreement was executed (pre-Viking River), individual and representative PAGA claims were indivisible. Following Mondragon v. Sunrun Inc. (2024) 101 Cal.App.5th 592, the court held that Plaintiff could not be compelled to arbitrate a dispute he didn’t agree to arbitrate. Finally, the court rejected Defendant’s reliance on Hernandez v. Sohnen Enterprises, Inc. (2024) 102 Cal.App.5th 222 to interpret contract language to avoid surplusage, reasoning that this principle is only a guideline, and similar redundancies are common in PAGA contexts.

Full opinion

Plaintiff sued under PAGA “in a Representative Capacity only” (emphasis in original) for various wage and hour violations. Defendant moved to compel arbitration and subsequently moved to dismiss or stay the case pending Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639. Following the decision in Viking River, Defendant argued that Plaintiff’s “individual PAGA claim” should be compelled to arbitration and his non-individual PAGA claim dismissed. The trial court denied the motion, finding that Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 was “current law” when the agreement was signed. Defendant appealed.

The Court of Appeal affirmed denial of the motion to compel arbitration, finding that because  Plaintiff did not assert individual PAGA claims in the complaint, there was nothing to compel to arbitration. The court disapproved Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001, which required arbitration of unasserted individual PAGA claims. Instead, the court emphasized the complaint’s contents as the determinative factor. Notably, the court declined to address Defendant’s argument regarding Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533 and its potential conflict with Labor Code § 2699(a). However, it left open the possibility that the complaint, lacking an individual component, might not comply with § 2699(a), and that Defendant could raise this issue through an appropriate pleading challenge.

Full opinion

Plaintiff sued for various FEHA violations after being terminated. The trial court found the parties’ arbitration agreement procedurally and substantively unconscionable and refused to enforce it. Defendant appealed, and the Court of Appeal affirmed. On review, the California Supreme Court reversed in part, remanding to the Court of Appeal to determine whether to sever the objectionable portions or refuse to enforce the entire agreement. 

Following the Supreme Court’s guidance (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478), the Court of Appeal affirmed the trial court’s refusal to enforce the agreement. It held that severing the unconscionable provisions would impermissibly rewrite the agreement and impose terms not agreed to by the parties. The court also found that the agreement’s multiple defects indicated an intent to secure an unfair advantage for the employer, making severance an “inappropriate remedy”. Allowing severance in such cases, the court reasoned, could encourage employers to draft one-sided agreements.

Full opinion

Plaintiffs filed a putative class action, alleging various wage and hour violations, and later amended their complaint to include representative PAGA claims. The trial court granted Defendant’s motion to compel arbitration, staying Plaintiff’s remaining PAGA claim. After the deadline for initiating arbitration had passed, Plaintiffs moved to lift the stay, arguing that Defendant was required to initiate arbitration under the parties’ agreement. The trial court agreed, finding that Defendant was in material breach of the arbitration agreement, because it hadn’t filed a demand within the prescribed 30 days. Defendant appealed.

The Court of Appeal reversed the approval of Plaintiff’s motion to lift the stay. As a threshold matter, following Hernandez v. Sohnen Enterprises, Inc. (2024) 102 Cal.App.5th 222, the Court of Appeal determined that the trial court’s order was functionally equivalent to an order denying a motion to compel arbitration, and thus appealable. It also found that, under 9 U.S.C. § 16, Defendants were entitled to appeal from an order refusing a stay. The court examined the parties’ agreement and found that Plaintiff, not Defendant, was required to initiate arbitration. The parties’ dispute centered on the definition of “the party who wants to start the [a]rbitration [p]rocedure.” The court found that, in the context of the entire agreement and its incorporated arbitration rules (which were generally based on the AAA rules), the phrase necessarily referred to Plaintiff.

Full opinion

Plaintiff contracted COVID-19 while employed at Defendant and developed long-term health issues. Defendant terminated Plaintiff, and he sued alleging various FEHA causes of action. Defendant moved to compel arbitration, but the trial court denied the motion, finding the arbitration agreement impermissibly failed to incorporate a California Arbitration Act provision allowing third-party discovery. Defendant appealed.

The Court of Appeal reversed the denial of the motion to compel. While the court upheld the denial of Defendant’s request for judicial notice of the JAMS rules incorporated into the agreement, it took judicial notice of those rules itself. Following Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, the court found a minimal degree of procedural unconscionability but no substantive unconscionability,  because Rule 17(b) of the JAMS rules “provide[s] the arbitrator the authority to make available additional nonparty discovery”. Notably, the court disapproved of the contrary holding in Aixtron, Inc. v. Veeco Instruments Inc. (2020) 52 Cal.App.5th 360 that “the terms of Rule 17 did not authorize discovery from nonparties.” The court reasoned that Aixtron‘s holding was based on an impermissible assumption that third parties might refuse to comply with an arbitrator’s discovery order, an assumption Ramirez precludes.

Full opinion

Plaintiff sued for sexual harassment after a coworker made repeated unwanted sexual remarks, causing her to take medical leave and resign from Defendant. The trial court granted Defendant’s motion to compel arbitration based on a choice-of-law provision in the parties’ agreement.

On appeal, the Court of Appeal reversed the order compelling arbitration. Finding a sufficient link to interstate commerce to bring the dispute within the EFAA’s scope (following Nguyen v. Applied Medical Resources Corp. (2016) 4 Cal.App.5th 232), the court held that the EFAA preempts conflicting state law under conflict preemption principles (following Keeton v. Tesla, Inc. (2024) 103 Cal.App.5th 26). The court rejected Defendant’s argument that selecting state law in an arbitration agreement effectively opts out of the Federal Arbitration Act (FAA) even in contracts involving interstate commerce. Because Plaintiff’s claims accrued after the EFAA’s enactment, retroactivity was not an issue. Finally, citing Liu v. Miniso Depot CA, Inc. (2024) 105 Cal.App.5th 791, 800 the court ruled that the EFAA rendered the parties’ arbitration agreement unenforceable as to all of Plaintiff’s claims.

Full opinion

Plaintiff entered a subcontract with Defendants, but Defendants failed to inform Plaintiff that the subcontracted work was public work subject to prevailing wage laws. Plaintiff’s employees subsequently prevailed in wage arbitrations against Plaintiff. Plaintiff then sued Defendants for indemnity under Lab. Code §§ 1784 and 1781. The trial court sustained Defendants’ demurrer to the § 1784 cause of action without leave to amend, finding that the statute did not apply retroactively. It sustained the demurrer to the the § 1781 cause of action with leave to amend. Plaintiff filed a first amended complaint, but the trial court sustained Defendants’ subsequent demurrer, concluding that § 1781 does not permit losses related to arbitration awards and settlements. Plaintiff appealed.

On appeal, the Court of Appeal affirmed the dismissal of the § 1784 claim but reversed dismissal of the § 1781 claim. Plaintiff argued the trial court erred in interpreting § 1781 to exclude arbitration awards. The Court of Appeal agreed, holding per NTCH-WA, Inc. v. ZTE Corp. (9th Cir. 2019) 921 F.3d 1175 that a judgment confirming an arbitration award has the same force and effect as a court judgment. However, the court rejected Plaintiff’s argument for retroactive application of § 1784, which was enacted after the conduct underlying Plaintiff’s claims. The court reasoned that § 1784 created new rights, not merely clarified existing ones, and that legislative history did not indicate an intent for retroactive application.

Full opinion

Plaintiff, a gig worker classified as an independent contractor, brought a collective PAGA action alleging misclassification. Defendant moved to compel arbitration of the individual portion of the action. The trial court denied the motion, finding no individual cause of action, and Defendant appealed.

On appeal, the Court of Appeal reversed the trial court’s order denying the motion to compel arbitration. Focusing on the statutory language of Lab. Code § 2699 (a), the Court of Appeal held that PAGA actions inherently include both individual and representative claims. It distinguished this case from Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, and Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, finding that they did not address whether a PAGA action can be brought without including an individual PAGA claim. The Court of Appeal ordered the trial court to compel arbitration of the individual claim and stay the representative PAGA claim.

Full opinion

Plaintiff sued for individual wage and hour violations and a related PAGA claim. After the trial court compelled arbitration of the non-PAGA claims, an arbitrator ruled against Plaintiff for all her individual Labor Code claims. The trial court confirmed the arbitration award, and the Court of Appeal affirmed. The trial court subsequently granted Defendant judgment on the pleadings as to Plaintiff’s PAGA claim due to a lack of standing. 

Plaintiff appealed, and the Court of Appeal affirmed the trial court’s judgment. Following Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65, 77 and Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1124, the court applied issue preclusion. It found all elements met because the arbitrator’s explicit findings that Plaintiff personally suffered no underlying violations were identical to the issue of her “aggrieved employee” status, were actually litigated, and necessarily decided. The court rejected Plaintiff’s argument that the issues were not identical for her specific Labor Code claims. While acknowledging the general principle that arbitrators need not issue findings or reasons (Rodrigues v. Keller (1980) 113 Cal.App.3d 838, 842), the court emphasized that in this case, the arbitrator did provide clear adverse findings against Plaintiff on her individual claims, which formed the basis for preclusion.

Full opinion

Defendant allegedly misclassified Plaintiff as exempt and subjected her to sexual harassment, discrimination, and retaliation. Plaintiff resigned then sued, alleging FEHA and wage and hour violations and other claims. Defendant moved to compel arbitration, arguing Plaintiff failed to state a claim for harassment under FEHA. The trial court denied the motion, finding plaintiff adequately stated a sexual harassment claim and that the EFAA rendered the parties’ arbitration agreement unenforceable for all claims. Defendant appealed. 

On appeal, the Court of Appeal affirmed the trial court’s order denying the motion to compel arbitration. It held that the EFAA invalidates pre-dispute arbitration agreements “with respect to a case which is filed under … state law and relates to … the sexual harassment dispute” (9 U.S.C. § 402(a)). Emphasizing the word “case,” the court held that the EFAA precludes arbitration of the entire case, not just the sexual harassment claim. This interpretation, the court noted, is consistent with Doe v. Second Street Corp. (Sept. 30, 2024, B330281) ___ Cal.App.5th ___ and federal district court decisions. The court distinguished this case from KPMG LLP v. Cocchi (2011) 565 U.S. 18 and Dean Witter Reynolds Inc. v. Byrd (1985) 470 U.S. 213, where the Supreme Court allowed separation of arbitrable and non-arbitrable claims.

Full opinion

Plaintiff became disabled due to a work injury. After her wage replacement benefits ended, Defendant placed her on unpaid leave. Plaintiff’s doctor determined she had permanent limitations preventing her from performing essential job duties. Defendant refused her request to file for disability retirement pending exhaustion of return-to-work options. Plaintiff accepted a demotion but later informed Defendant she could not work due to mental health treatment. She sued, alleging FEHA disability discrimination and retaliation. The trial court granted summary adjudication for Defendant on all claims, and Plaintiff appealed. 

On appeal, the Court of Appeal affirmed. It upheld summary adjudication of Plaintiff’s disability discrimination claim because Plaintiff could not perform her job duties, even with the offered accommodation. Regarding Plaintiff’s failure-to-accommodate claim, the court held that Defendant’s refusal to file for disability retirement was not a failure to accommodate under Gov. Code § 12940(m)(1). Even if improper, Plaintiff would need to file a writ of mandate to compel compliance under Gov. Code § 21153. The court upheld summary adjudication of Plaintiff’s interactive process claim because Plaintiff did not identify an objectively available accommodation that Defendant failed to offer. It upheld summary adjudication of Plaintiff’s failure-to-prevent-discrimination claim because Plaintiff lacked a viable underlying discrimination claim. Finally, the court upheld summary adjudication of Plaintiff’s retaliation claim, as Plaintiff incorrectly asserted that “becoming disabled” was a protected activity.

Full opinion

Plaintiff sued defendant for Labor Code violations then amended her complaint to assert individual and non-individual PAGA claims. Defendant moved to compel the individual PAGA claim to arbitration and dismiss the non-individual claims. The district court compelled the individual claim but denied dismissal, instead staying the non-individual claims pending arbitration. Defendant appealed the denial of dismissal.

The Ninth Circuit affirmed. Relying primarily on the California Supreme Court’s clarification in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, the court held that arbitrating an individual PAGA claim does not strip a plaintiff’s standing to pursue non-individual claims in court. Thus, the district court correctly denied dismissal. The Ninth Circuit also affirmed the stay of the non-individual claims pending the arbitration’s completion, consistent with Adolph‘s guidance, and found it unnecessary to address the agreement’s class action carve-out.

Full opinion

Plaintiff signed an arbitration agreement with a carve-out for PAGA claims. After termination, he filed a PAGA claim alleging Labor Code violations. Defendant moved to compel arbitration, arguing that the AAA Rules, incorporated by reference, delegated arbitrability to the arbitrator. The trial court denied the motion.

On appeal, the Court of Appeal affirmed. Citing Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, the court held that incorporating AAA rules by reference does not meet the “clear and unmistakable” delegation standard for unsophisticated employees. The court also found the agreement “clearly and explicitly excluded all PAGA claims.” While Viking River requires enforcement of agreements to arbitrate individual PAGA claims, that rule did not apply here because the agreement excluded all PAGA claims.

Full opinion