Arbitration Was Required Under A Collective Bargaining Agreement That Did Not Provide For Class Arbitration.
Brushing aside thorny appealability issues, Cortez v. Doty Bros. Equipment Company, B275255 (2/7 filed 8/15, pub. order 9/1/17) (Perluss, Zelon, Segal) treated an employee's appeal as a writ of mandate, enabling the Court to address the effect of an arbitration provision in an employer/union collective bargaining agreement (CBA).
The Court agreed that the arbitration provision in the CBA, requiring the employee to arbitrate claims "arising under" Wage Order 16, showed a clear and unmistakable intent to arbitrate claims relating to Wage Order 16, even if the claims referenced the Labor Code without referencing Wage Order 16. "To hold that wage and hour disputes arising under Wage Order 16 are arbitrable under the CBA only in theory, but not in practice because they are, by necessity, brought under the Labor Code, would result in the very absurdity courts are required to avoid."
Causes of action for statutory penalties due for failure to pay wages timely, and for unfair competition based on the employer's purported violations of the Labor Code, were another matter. Here, the CBA did not contain an explicit and unmistakable agreement to arbitrate those statutory claims. The waiver of the right in a CBA to prosecute a statutory violation in a judicial forum is only effective if it is explicit, "clear and unmistakable." Therefore, those two claims could not be arbitrated.
Finally, the the Court held that the CBA did not contemplate class-wide arbitration -- "the CBA refers to the grievance or dispute of an individual employee, not a group of employees."
COMMENT: We have previously blogged about an issue resulting in a split among the US Courts of Appeals, and on the docket at the beginning of the new Supreme Court term: whether waivers of class-wide arbitration violate the NLRA's protection of collective activity. 9th Circuit and 7th Circuit: Yes, that's a violation. 5th Circuit, no, labor organizing does not mean class legal action. See posts dated 10/11/16, 1/17/17, 7/24/17, 8/23/17.
The NLRAs protection of concerted activity is clearly relevant to the outcome in Cortez, and as to the applicability of that protection to class legal activity, the 9th Circuit and the California Supreme Court are not on the same page. Because "'the NLRA's general protection of concerted activity, which makes no reference to class actions,' [Iskanian v. CLS Transportation, LLC Los Angeles, 59 Cal.4t 348, 375-376 (2014)] does not bar parties to a CBA from excluding class claims from the agreement to arbitrate," the Court in Cortez saw no reason to delay and wait for a ruling from the SCOTUS.