Filed 1/13/23 U.S. Bancorp Inve stments v. Madison CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opini o n has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

U.S. BANCORP INVEST MENTS, INC. e t al.,

P laintiffs and Res pondents

,

v.

F ARIBA MADISON

,

Defendant and Appellant. B 309732

(Los Angeles County Super. Ct. No. 19STCP05647 )

APPEAL from a judgment of the Sup erior Court of
Los Angeles County. Lia R. Martin , Judge. Affirmed

. K&L Gates , Paul W. S weeney, Jr., Christina N. Goodrich, Zachary T. Timm and Kate G. Hummel for Plaintiffs and Respondent s

. Law O ffices of Steve A. Buchwalt er, St eve Buch walter ; Law Offices of Scot D. Bernstein and Scot D. Bernstein for Defendant
and A ppellant.

________ ____ _______ ____2 I NTRODUCTION

Fariba Madison appeals from the trial cour t ’ s judgment confirming an arbitration aw ard dated Novembe r 27, 2019
, in
favor of her former employer U.S. B ancorp Investments, Inc. (USBI) , David Matthew Terrell

, and Sean Pong

, and d eny ing her
motio n to vacate the award

. Madison contends the trial court
erred because the arbitration award ca used a waiver of her

un wai vable statutory rights

, the arbitration decision failed to provide adequate findings and conclusions , and she did n ot

r ece ive suffici en t discovery

. Finding no error, w e affirm.

F ACTUAL AND PROCEDURAL HISTORY

A

. Ma dison ’

s Employment w it h USBI and Termination f or Cause
Madison work ed for USBI as a financial advisor from February 2006 to Octo ber 201 2

. USBI employed h er at

- w ill and paid h er a salary plus a commissi on as set forth in annual

c ompensatio n p lans that Madison signed each year. D istrict

s ales manager Terrell supervised Madison from 2009 through
2012. According to Terrell ’ s uncontradicted testimony, t he plans
had subst ant ially similar language each year , and operated
subst antiall y the same

. The plans described mont hly “ advances against future earned commissions ” that Madison would re ceive based on prior production

. The 2009 plan described that

“ commissions will b e considered e arne d on e year following the

c ommissionable sale, to allow for reconciliation and offset o f costs
and char g ebacks as provided in this plan. Until commissions are deemed earned, any advances will be subject to reduction, offset3

or rep ayment a s pr ovided in this plan

. ” The mont hly compensation could decrease based on “ Revenue Adjustments ”

— deductions from the gross revenue

— Madison had produced. T he
annual c o mpen sation p lans also requ ired M adison to share a

pe rcentage of her commissions with her sales assis t a nt. On Oct ober 17, 2012, USBI terminated Madison’s employment . It concluded Ma d ison had interfered with an
internal compl iance investigation into inc onsiste ncies with
Madison ’ s client account documents by att emptin g to o btai n client signatu r es on paper w o rk subject to the i nvesti gation

. Madiso n received her final paycheck o n November 1 4, 2012

.

B. M adison ’ s Arbitration Claim s and Discovery
On January 15, 2016, Madi son initiated arb itration against USBI

, which proceeded bef ore a t hree

- m ember p anel of th e Financial Industr y Regula tory Authority ( F INRA )

. Madison’s Statement of Claim asserted cl aims fo r unpaid wages ( Lab

. Code

, § 201 )

, back payment penalt ies (Lab

. Code

, § 203 )

, unr eimbursed expenses (Lab

. Code

, § 280 2 )

, 1 unjust enrichment, brea ch of the
im p l ied covenant of g oo d faith and fair de aling, violation of
Business and Profess ion s Code se ctio n 1 7200 et seq ., defamation (s pe cifi cally by Pon g , a USBI employee also supervi s ed b y T errell

, in makin g der ogatory statements ab out her after her

t ermination )

, r eceipt of stolen property ( Pen

. C ode

, § 496
, subd

. (a) )

, failure to retu rn emplo yee bond payment ( Lab

. Code

, §§ 400

- 410 ) , and illegal contract ( Bus

. & Prof

. Cod e , § 16600 )

. Sh e also sought treble and punitive damages

.

1 Further u ndesignated s tatutory ref eren ces are to the Labor Code

.4 In support of her wage claims, Mad i s on alleged USBI f ailed to pay o r credi t her fo r various commissions , incl u ding for “tra des made before [her] te rmi natio n but set tled afterward,” and failed
to reim burse “expenses she reasonably inc urred on behalf of
USBI in the per f

ormance of her duties

. ” She also alleged that “[ b]y withholding and keeping for itself th e compensation legally

e arn ed an d payable ” to her, USBI unju stly enriched it self at her

expense. During two year s of litigation , Madison propounded and
received a substantial amount of d i s c over y , obtai ned t wo evidentiary hearing continuances

, and filed three motions to

comp e l

. Prio r to the panel ruling on her motion s , she reached a n
agr eement wi th USBI on production of documents relate d to her
commission hi story and commission deduc tions ( a mong other

t hings )

. USBI ultimately pr oduced over 20 ,000 pages of
d ocuments to Madison

. The panel denied Madison ’ s motion for a
third c ontin uance pr ior to t he evid e ntiar y hearing and denied her

re newe d motion f

or a third continuance the fir st morning o f the evidentiary h earing i n September 201 8

. The parties proceeded to

an evi dentiary hear ing , begin ning w ith four days devoted to
discover y matte rs

. The panel denied Madison ’ s mo tion to compel further production of documents r elevant to her w age claims

. T he panel chair st ated

, “ I don’t see any evid ence of doc ument s being in tent ionally withheld othe r tha n those that are privileged

, ” and told Madison

, “You certainly had the di scovery for this issue.”5

C. T h e Evidentiary Hearing on the Merits an d Motion T o D i smiss
In March 2 0 19, t he evidenti ary hear ing resumed

. Madison

spen t 15 d ays pre senting her case to the a rb itration pa nel

. As part of her ca se , M adison a rgu ed for the first time that USBI
vi olated section 221 by imposing re ver sals a nd adjus tmen ts to he r r eceived compensa tion and by r equiring her to share a
per centage of her commission with h er sales assi stan t

. 2 Madis on contended she was entit led to $623,036. 43 in “commission reversals” and $195,476.87 in “incentive statement summary

reversa ls ” shown a s n e gative entries o n her co mmiss ion reports

, which she characterize d as improper wage deductions in viol ation of section 221. S he also argued the sa l es assistant comm ission
share was an improper business exp ense in violation of

s ection 2 802. After Madiso n rested

, USBI move d to dismiss all of her claims purs uant to FINRA Rule 13504 , sub division (b)

. USBI argued Madison’s section 221 claim was proc edur ally imp roper and unti mely . It als o argued she had no leg al right to recovery becaus e the evi dence establ i s hed the reversals were adjustments
to advance d commissions under the annual compensation p lans signed by Madison

, not deductions to earned wages

. USBI al so argued t he sales assistant com mis sion s hare did not vio late
sectio n 2802 as an improp er wage dedu c t i on and business

e xpense . In support , USBI cont ended the compensation plans
Madison ex ecuted allowe d her to receive a d vanced commis si ons ,

w hi c h she did not actuall y “ earn ” unti l USBI completed all

2 Section 221 provides, “ It sha ll be u n la wful for any employer
t o collect or receive from an employee any part of w ages there tofore paid by said employe r t o said empl oyee. ”6

adjustments and rec onciliations , including t he sales ass i s t ant commiss ion sh are, meaning USBI never deducted a commission
share for her sales ass i s tant from Madison’s earned wages

. USB I also mo ve d to d ismiss Madison’s Pe nal Code section 496 claims on the gro unds that employmen t compensation disput e s d id not

co n s titute a Penal Cod e violation and therefore could not s upport

recovery of treble damag es. After oral argument on t h e mot i on to dismiss

, the panel
is sued a n order dismissing Madison’s se c tion 221 c laim for improper wage deducti ons , her sectio n 2802 claim f or imp roper d educt ion of wage s and business expense s relating to the sales
assistant com mis sion shar e , and her Penal Code se cti on 496 cla ims

. T he panel exp la ined that it “ struck the 221 claim sim ply
becau se it wasn’t fair to have that in the case bec aus e it w asn’t in the S tatement of Claim

, ” but that Madison could attempt to maintai n a c laim to r eco up her all eged improper reversals of compensation under o the r Labor Code sections as part of her

rem aining claims

. The arbitrator s suggested tha t it would be

“ helpful to the pan el ” if USBI put on evid ence why Mad ison w as not e n titled to th e alleged rev e rsals

. The panel also explained

t hat with regard to the sal es assistant c ommission share, “ [w]e

ag reed with the arg ument that it w as a matter of co ntract and i t was appropriate fo r her t o agree to s hare h er commi s sions with
h er assistant. ” USBI presented its defen se over fou r additional evidentiary
h earing days

. Madison ’s for mer s upervisor

, Terrell

, e xplained that USBI conditionally advanced com mis sion pay ment s to fin ancial advis or s prio r to US BI receiving the act ual revenue on the contract . USBI would the n “ charge back

, ” reducing the
advanced commissi on if th e deal did not generate the expected7

revenue

. Terrell also explained Madison received mon t hly
commi ssi o n r eports

. These r eports detailed Mad ison ’ s adv anced
commissions and negative adjustments th a t resu lted from various types of r equired chargebacks pursuant to the t erms of her compe nsation plan

. 3 USBI ’s expert witness addressed the

v arious t ransac tions i n these c ommission r ep orts . He concluded
Madison ’s ca lculation of purported negati ve “ rev ersals ” ignored
rela ted transactions that reflected corr esponding credits

. The expert wi tness concluded that USBI owed Madison no damages for un paid c om missio ns or i m proper deductions

.

D. The Arbi tration Award O n November 27, 2019
, t he p anel i ssue d a 10

- page awa rd
in f avor of USBI on al l claims

. T he p anel found that Madis on failed t o prove any of her claims by t he ne cessary pre ponderance
of the evidenc e. The clai m s based on sections 201 , 203 , and 2802 failed because the compensation she claim ed USBI did not pay was only an advance, “ subject to app ropria te deductions and adjustm ents made by USBI

. ” The ad vances became wages only after application of the ded uctions a n d adjustm ents , a p rocess

“ e xplicitly provided for in USBI’s Financial Consultan t Compensation Plan. ” Regarding the claim for unpaid

co mmissions, the panel cr e dited U SBI ’ s expe rt witness over
M adison ’ s own testimony that USBI failed to pay an y commission s Madison had earned

. The pa nel similarly re jected

3 Th e compensation plan contemplated “ [ r ] evenue [ a ] djustments ” for a variety of e vents, including ( from the 2012 plan) “ services and transactions that were cancelled, that did not clos e, that were rever sed o r modified , that were incorrec tly recorded or booked, and/or th at USBI determines, in its di scretio n, violate USBI p olicy, this Plan, or business objectives

. ”8

the unjust enrichment claim b ecause Madison failed to prove USBI “ unlawfully benefite d from the deductions a n d adjus tments

to the advances. ”

E. The Trial Court C onfirms the Arbitration Award On December 2 6 , 2019, USBI file d a petition in the trial

court to co nfir m the ar bitration award

. Madison opposed and
moved to vacate the awa rd. USBI repli ed

, opposed Madison ’ s motion to vacate

, filed objectio ns to Madi son ’ s evidence

, and

s ubmitted its o wn summary o f events as part of its opposi tion to Madison ’ s motion

. On September 2, 2020, the trial court sus tain ed USBI’s objections to Madi son’s evidence and issued a t e ntativ e ruling granting USBI’ s p etition to confirm the a ward and denying Madison’ s m otion to vac a t e

. After a hea rin g on September 3,
2020
, the tria l court ado pted its tentative decision and issued an order conf

irming the a ward. The trial court ’ s order stated :

“ Madison ar gues that she was denied her subs tantive
ri ghts as the arbit rators failed t o f o l low [ Armendariz v. Foundation Health Psychcare Se rvi ces, Inc. (2000) 24 Cal.4th 83 ( Armen dariz

) ]

. She was denie d adequate d iscovery, did not receive a complete award as the a rbitrators failed to ru le o n all
iss ues be fore them, receiv ed an aw ard which vi o l at ed public policy and receive d an award which ca used
Madison to waive unwaivable statutory protections and rights.

[ ¶ ]9 “ T he documents Madison argues were not produced
in d iscovery were the su bjec t o f at least th ree discovery h earings. USBI mainta ins t h a t it produced
all non

- pr ivileged documents in its possession

, custody and c ontrol. Madison was unable to prov ide
evidence that USBI did have document s it refused to produce , despite being gran ted c on tinua nces and

e videntiary he arings to obta in such evid e n ce. Madison did h ave ad equate discovery.

“ As to Madison’s arguments that the award was
based on a waiver of non

- waivable rights and violated public policy, whether the mon ies at issue were

w ages i s a fac tual issue

. Evidence a nd authority w as sub mitted b y USBI that these were a dvances on
commissi ons, which are no t considered wa ges until earned and are subject to reconciliati on, which
includes deductio ns, prior to being cons idered wages. Ther e was ev idenc e explaining the deduct ions.
Evidenc e was also s u b mitted that sharin g

comm issions is a standa rd industry pract ice which
does not fall within the category of bus iness expense s reimbursable by the emplo yer. The sufficiency o f
that evidence is not s u bj ect t o review. Madi son has
not establishe d that the a w a rd requires a waiv er of

non

- waivable rights or violated publ ic policy.10 “ Pe arson Dental Supplies, Inc. v. Sup. Ct. (2010)
48 Cal.App.4th 665, 680

, 4 does not support Madison’s

a rgument. In tha t case, t h e clai mant was denied a
heari ng on the me rits of his F E HA claims, due to a legal error by the arbitr ator. The narrow exception
in Pe arson applies when there is the den ial of a
hea ring due to a legal error i n the framework of a

non

- waivable right. Here, M a dison was given lengthy h eari ngs, both o n her discov e r y issues and on
the merits o n her claims. That issues were det ermined agains t her is not a ground to vacate the
award.

“ Madi son’s argument that she did not receive a fully

re asoned award as it did n ot inclu de discussion of
claim s which were dism issed pr i o r to the hearing is not pe rsuasive. The arbitr ators issued a l engthy
award w hich addressed the ruling on the mot ion to dismis s. ”

T he trial court entered judgment o n October 19, 202 0

. Ma dison timely appeal ed.

DISCUSSION
A. Stan dard of Revi ew

“ ‘ “On ap p e al fro m an order c on firming an arbitration award, we revi ew the trial court ’ s order (not the arb itration award) under a de novo s tandard. [Cit ati o ns.] To the extent that

4 The correct citation i s P e arson Dent al Supplies, Inc. v. Superior Court (2010) 48 Ca l. 4th 665.11

the tr ial cou rt ’ s ruling rests upon a determination of disputed factua l is sues, we a pply t he substanti al evidence test to those
issues.” ’ ” ( ECC Capital C orp. v. Manatt, Phelps & P hillips, LLP (2017) 9 Cal .App.5th 885, 900 ; acc o r d

, R oussos v. Roussos (2021)
60 Ca l.App.5 th 962, 973 ( Roussos ) ; Douglass v. Sereniv ision, Inc. (2 018) 20 Cal. A p p.5th 376, 386 ( Dou g las s ) ; see Advanced Micro Devices, Inc. v. Intel C orp. (1994 ) 9 Cal.4th 362, 376, fn. 9 [reviewing de novo whe ther arbitrat or exc eeded h is or her

powers ] .) “[ I]n rev iewing a judgment confirming an arbitratio n award, we mu st ac cept th e trial court ’ s findi n gs of fact if substantial evidence suppo rts them

. ” ( Alexander v. Blue Cross of California (2001) 88 Cal.App.4 th 1082, 1087 ; a ccord, D oug lass

, at

p. 386 .) “ We also review de novo ‘ legal issue[s] invol ving

stat utory cons tr uction and t h e ascer tainme nt of le gislative intent. ’ ” (

Roussos

, at p. 973

. ) We apply a di fferent, “ highly d efe rential standard of review
to the award itse lf

. ” ( Cooper v. Lavely & Singer Profess ional Corp. (2014) 230 Cal.App.4th 1, 11

- 12 ( Co oper ). ) O rd inarily

“ ‘[t ] h e meri ts of the cont roversy between the parties are not subject to judicial r eview.’ ” ( Monchars h v. Heil

y & Bla se (1992)
3 Cal.4th 1, 10

- 11 (

M onc harsh ) .) Instead, t he reviewing court

“ ‘ restrict [ s ] [its] r eview to whether the award s hould be v acated
und e r the g rounds listed in [Code of Civil Procedure]

s ection 1286.2. ’ ” ( EHM Produc tions , Inc. v. St arline Tour s of
Ho llywood, Inc. (2018) 21 Ca l.A pp. 5th 1058, 1064

. ) Accor dingly

,
we do not review the arbitrator ’ s reason ing or the sufficiency of
the evidenc e , and “ an a rbitrator ’ s decis ion cannot be reviewed for

err ors of fact or law ” abs ent “ narrow exce ptions. ” ( Moncharsh, a t

p

. 11 ; accord

, Cooper

, a t p . 12. ) “ These exceptions do not

encomp ass all errors that are apparent on the face of the awa rd12

and caus e s ubstan tial injustice

. ” ( Co oper , a t p . 12 ; ac cord Moncharsh, at p. 11 .)

B. The Trial Court P r operly Confirmed the Arbit ration Awar d
T he tr ia l court may vac ate an arbitrator’s awa rd if “[t]he
arbitrator s exceeded their powers and the awar d cannot be

c o rrecte d without affe cting the merits of the de cision upon the controversy s ubmitted.” (Code Ci v . Proc., § 1286.2, subd. (a)(4).)
“Arbitrators ma y exceed their powers by issuing an a ward that
vi olates a pa rty ’ s unwaivable statutory rights or that contra v e nes

an explicit legi slative ex pressio n of publ ic policy

. ” ( Richey v.
AutoN ation, Inc. (2015) 6 0 Cal.4th 909

, 916 ; see Moncharsh,

supra, 3 Cal. 4 th at p. 3 2 [t he “ limited and exc eption al
circumstances ” where judicial review of an arbitrator ’ s decision is

a p propri ate “ include t hose in wh ich gra nting fin ality to an
arbitrator ’ s deci sion would be incons i stent with the protection of

a party ’ s statutor y r ights ” ]. )
Madison argues th at beca use sections 2 01, 203, 221
, and
2802 are unwaivable pursuan t to section s 219 an d 2804

, 5 the

5 Section 2 19 pr ovides

, “ [N] o provision of this article [ section 200 et seq.] can in a ny way be contravene d or set aside b y a private agreement, whether written, oral, or im plied.” Section 2804 provides

, “ Any contract or agreemen t, exp ress or impl ie d, made by any em ployee to waive the benefits of this article [section 2800 et seq. ] or any part thereof, is nul l and vo id, and t hi s article shall not de prive any employee or hi s personal representative of any right or remedy to which h e is e ntitled unde r the laws of this State. ” “ Labor Code section 2804 voids any

a greement to waive the prot ecti ons of Labor Code se ction 28 02 as
ag a in s t public policy.

. . . Courts have interpret ed Labor Code section 2804 to ap ply to Labor Code section 2 802
, m aking a ll

co nt rac ts that waive an emplo yee ’ s right to indemnification null13

a rbitrat ion panel exceeded its authority by issuing an award that
viol ate d h e r unwaivable statutory rights and contravene d p ubl ic policy

. M adison’s argument fails.

1. The a rbitration a w ard d id n ot w aive Madison ’ s

u nwa ivab le r ights u n d e r Labor C ode section s 201, 203, and 2802
Ma di son conten ds she had the right to immediate pa yment of he r f inal paycheck under s ec tion 201

. B ecause US BI delivered her final payche ck 28 days after it terminated her employment

, Madison sought w aiting time p e nalti e s under sectio n 203

. Madison also asserte d t hat USBI v iolated sectio n s 2 01 and 2 802 by failing to reimburse her for all wa ges and costs incu rred in furtherance of her duties as an employee by n ot includi ng in her final paycheck al l amo unts taken b a c k from he r past payc heck s and all deducti ons previously d irected to her sales assistant

. Section 201 pro vides that when an employer discharges an employee, “ the wages earned and unpaid a t the time of discha r ge are due and payable immediately

. ” “ ‘ Wage s ’ i ncludes all amounts f or labor pe rformed by employees o f every descri ptio n, whether

t he am ount is fixed or ascertaine d by the standard of time, t ask, piece, commission basis, or other meth od of calc ulation. ” ( § 20 0
, subd. (a)

. ) Section 203 p rovides that i f an employer willfu l ly fails to pay in fu ll any wages of a discharged e mployee

, f or up t o 30 days “ th e wages of the employ ee shall c ontinue as a penalty from the due date thereof at the same ra te until p aid or unt il an action therefor is com menced

. ” S e c t ion 2802 entit le s an employee

to reimburse ment fr om an employer “ for all necess ary

an d void. ” ( Edwards v. Art hur A ndersen LLP (2008) 44 Cal .4 th 937, 9 5 1

. )14

exp end itures or losses incurr ed by the employee in direc t consequence of the discharge of his or her duties, or of his or her
obedience to the directions of th e employer. ” S o long as it does so in writing, an emp loyer can deem
commission s no t “ earned ” (for pu rposes of s ection 201) until the satisf action of certain conditions precedent , including
cha r gebacks. (

DeLeon v. Veriz on W

ireless, L LC (2012)
207 Cal.Ap p.4 th 8 00, 81 0 ( DeLeon ) ; accord, S ciborski v. Pacific
Bell Direct ory (2012) 205 Cal.Ap p. 4 th 1152, 1166

- 1167 [ “ ‘ “ A
commission is ‘ earned ’ when the employee has perfected the right to payment; that is, when all of the legal conditions precedent
have been met

. ” ’ ” ]. ) “

A n a dvance is not a wage

. ” ( Semprini v. Wedbush Securities , Inc. (2020) 57 Cal.App. 5 th 246, 255; accord,
Steinhe bel v. Los An geles Times Communications, LLC (2005)
126 Cal.App.4 th 696, 705.) An advanced commission is not a wage because, by defi nition, “ a t t h e time of payment th e employer cannot d etermine whether the commission w ill eventually be earned ” and if the cond itions on the emp loyee ’ s right to the commission will occur. ( Steinhebel, at p. 705. )
T he written incentive compensation plan approved b y t h e DeLeon court re sem ble s the ones at issue here and illustrate s these pr in ciples . The DeLeon pl ans “ clearly and expressly stat e d ”
that commissions were not earned at the time a sales person sold a cell ph one service plan. ( DeLeon, supra, 207 Cal.App. 4 th at

p. 810. ) As here

, “ [w]hile commis sion payments were made in advance, commissions were earned only if the customer did not cancel the cell phone service before the expiration of the chargeback period. ” ( Ibid. ) T hus, as in the DeLeon pla n, Mad ison ’ s co mmissions became wag es only after calcu lation of
the final net rev enue a mo unt, accounting for an y adjustments.15

( See Prac hasaisor adej v. Ralphs Grocery Co., Inc. (2007)
42 Cal.4 th 217, 229 [ only final net profit figure for each store
determi ne d incenti ve c ompensation for stor e employees

, and

“ [ t ] his final figure, and this fi gu re only , once calc ulated, was the
amount of

fered or promised ” ].)
The arbitration panel determi ned

, “ [ Madison ] ’ s claims based upon Califor nia Lab or Code §§ 201, 203 , and 2 8 02 are n ot

a pplicable to her cas e because her compensati on for her sales
transaction s wer e only advan ces, subj ect to ap propriate
deducti ons and adjust ments m ade by USBI, and became wages only after such deductions a nd adju stments were made, which

w as expl i citly pr ovid ed for in USBI’s Fin ancial Consultant Compen sation Plan. ” T he trial cou rt concluded : “ As to Madison’s argument s that the award was b ased on a waiver of non

- waivable
ri ghts an d viola ted public policy, whether the monies at issue

we re wages is a factual iss ue

. Evid ence and au thori ty was submitted by USBI that thes e were advanc es on commiss ions,
which are no t consid ered wages until earne d and are subject to reconciliation , which includ es deductions, prio r to being considered wages. There was ev idence ex plai ning the deductions.
Evi dence was also su bmitted that shar ing commissio ns is a
stand ard industry pract ice whic h does not fall within the category of business expenses reimbur sable b y the employer. Th e sufficiency of that evidence is not subj ect to re view

. Madi so n has

not e stabl ished that the aw ard requires a wa iver of non

- w aivable right s or violated publ ic polic y. ” We agr e e up to a p oint. USBI cert ainly presented evidence that Madison signed a compensation agree ment providing for
advances . USBI a lso established, pursuan t to the compensation

ag reement
, that Madison did not “ earn ” the commissions16

refle cted by those advances unt il the occurrence of certain

co nditions over time. A s a factual matter, USBI proved that it paid Madison in accord ance with the provisions of the

c ompensation plans; that is, it made deductions from the
advances and fi nalized Madis on ’ s earned com mission pursuant to the compensation plan provisions

. The panel found that th e disputed deductions and post

- payment rev ersa ls consti tute d
standard adjustm en ts

— no t unlawful ded uctio ns from earned

wages

— to Madison’s advance d c ommissions and permissi ble
commission sharing w ith her sale s assistant , all as specified b y the compensation plans

. We take “ as correct ” th ese fa ctual
fin ding s

. (

Pano che Energy C enter, L LC v. Pacific Gas & Elec tric Co. (201 6) 1 Cal.App .5th 68, 99.)
On the other hand, w hether US BI paid Madison advances or wages when it made the monthly payments to her presents at
least a mixed question of fact an d law. P er the ar bitr ation panel,
Madison ’ s commissions became ea rned wages only a fter USBI charged ba ck the deduc tions and adjustm ents

. T he panel also mad e a finding , largely by crediting Terrell ’ s testimony about the

comp ensation plans and their impl em entation, that Mad i son ’ s paychecks con stit uted ad vances of her sal es co m miss ions , not

wages. Reg ardless of wh ether this presents a fac tual issue, a legal issue, or a mixture of the two, we agre e with the arbitration panel and the trial court that Madison signed an agreemen t to receive advances, w ith the express understa nding that the
advances would not become ear ned wages until USBI made the

a d justments s pecified in the plan. ( See DeLeon , supra, 207 Cal.App.4 th at p. 810 .) We also agree that USBI ’ s initial

pa y men ts to Mad ison amounted to a dvances that M adison did

not earn un til the occurrence of certain con ditions as specified in17

the plans. Because Madison ’ s compensatio n initially consis te d of
ad vances and not earned wages , she may not pursue claims invoking sect ions 201, 203 , and 2802 because those s ections apply

o nly to ea rned wages

. (See Sciborski v. Pacific Bell Directory

, supra, 205 Cal.App. 4 th at p p. 1166

- 1167 .)
Madison conced es UBSI’s compensation plan des ignates

co mmission compensati on as an advance unti l certain co n ditions

occur , but she dis putes the panel ’ s determinat ion that her final

co mp ensatio n consist ed of an advance

. She also argue s “ the

ar bitrators’ ruling that Ms. Madison’s f inal paycheck was an advance makes no logical sense whats oever , ” and t hat t he

c o mm i ssions re flected in her fi nal pa y check should be considered
earned wages , not an advance. As it did in the trial court
, thi s argument goes to the merits of her dis pute with USBI by relitiga ting the panel ’ s reasoning and conclusions

. W e do n o t

r evi ew the arbitrator s ’ reasoning

. ( Monchars h, supra, 3 Cal.4th

at pp. 10

- 11

. ) Simply because Mad ison did not recei ve a fa vorable det ermination on the merits does not mean the

ar bitration awar d viola ted her stat utory r ights

. Generally “ i t is

w ithin t h e ‘ po wer s ’ of the arbitrator to resolve the ent ire ‘ merits ’
of t he ‘ controversy s ubmitted ’ by the par ties [ ; ] ” including “ a ll the
contested issues of law and fact submitted to the arbitrator for
decisi on. T he arbitrator ’ s resolution of these issues is w hat t he

pa r ties bargained for in the arbitrat ion agre ement [;]

. . . the

a rbitrator ’ s aw ard does no more tha n resolve th at disp ute. ” ( Id. at p. 28 .) Under the circumstances here , the panel did not e xc eed
its powers in resolving the qu estions of law and fact pr es ent e d to it, and t he trial court did n ot err i n concluding that no statutory

gro und asserted by Madi son warra nted vacating the arbitrati on award

.18 2. The arbitration panel did not imp roperly shift the burden of proof onto Madiso n or waive Madi son ’ s

un w a i va ble rig ht s under section 22 1 Madison contends the arbitration pa nel “ revers ed ” the burden of proof on her st atutory wage claims

, depriv ing her of the
abili ty to vindicate her unwaivable statutory rights. A s USBI points out , s ection 221 is the only sta tute as serte d by Madison
wh ere the burden of pr oof may shift to the employer

. “ An employee see king to recover u nder Labor Code section 2802 for business expenses paid out o f pocket must s how tha t the expenditures were ‘ n ece s sarily expend[ed] i n direct con sequenc e of t he discharge o f th e employee ’ s dut ies [.] ’ ” ( Davis v. Farmers
I ns. Exch ange (2016) 24 5 Cal.App.4th 13 02, 1337 ( Davis )

. )
How e ver, where an emp loyee establishe s her employer ded ucted

“ apparently business

- rela te d expenses ” fr om her paychecks

,

“ [ u] n der L abor Code secti ons 221 and 22 4, th e empl oyer bears the burden of establishing that such deductions are authorized by
l aw. ” ( Davi s , at p. 1337 .) As th e panel found, Madison failed timely to assert a

s ection 221 cl aim that would trigge r a burden

- sh ifting a nalys is. Although Madison r elies on sec tion 221 for her argument about improper wage deductions

, she did not ass ert a claim for impro per wage deductions in viola tio n of section 221 in h er State m e nt of Claim or pursue a s ection 221 claim for improp er
wage deduc tions during discov ery , and s he n ev er file d an amended S tat ement of C laim adding any causes of a ction based

on section 22 1

. Ra ther, she argued f or the first time at t he
evi dentiary hearing t ha t vari ous post

- payche ck adjustments to compensatio n , and h er co mmission share d wit h her sale s assis tant , constituted improper wage deductions i n violation of19

se cti on 221

. T he p anel dismissed the sec ti on 221 claim as improp er because Madison did no t include it in her Statement of
Cl aim

, but the panel did perm it h er to maintain a c laim to reco up h er alleged im proper reversals of compensation under her

rem a ining Labor Code causes of act ion

. Because Mad is on neither sought nor obtained leave to amend her Statement of Claim, t he panel ac ted well within its aut hority t o dis miss the s ection 221
clai m

. ( See FINRA r ule 13309(b) [party may only amend pleading if pa ne l gr ants a motion th at in cludes with it copy o f the proposed am ended pl eading ].) We do not revis i t that decision here. In any event, ev en if Madison properly had presented a section 221 cla im for improper wage deductions , it would suffer
the same flaw as Madison ’ s other cla ims

. T he panel found
M a di son ’ s compensation p rior to adjustme nt cons isted of
advances

, not earned w ages . Th ese commissions did no t become

earn ed wages u ntil USBI adjus ted t hem with the charge backs

. W e do not second guess or disturb th ese findings on appe al. ( Mo n charsh, supra

, 3 Cal.4th at p. 11

. )

C

. M adison Conducted Adequate Disc overy To Arb itrate Her Statu tory Claims
An arbitr ation “ p ermit s a n employ ee to vindicate hi s or her statutory right s ” only if it “ meet [s] certain minimu m

r equirements, incl udi ng neutrality of the arb it rator, the provision of adequate discovery, a written decision tha t will permit a limited form of judici al revie w, an d l imitatio ns on the costs of
arbitration. ” (

Armendariz

, supra, 24 Cal.4th at pp. 90

- 91 [ addressing arbitr ation of FEHA claims]; see Mer c u ro v. S uper ior
Court (2002) 96 Cal.App.4th 167, 180 ( M ercuro ) [ “ [ W ] e see no20

reason why Ar me n dariz ’ s ‘ par ticular scrut iny ’ of arbitration agreements shou ld be confined to claims under FEHA. Rather,

u nder the Supreme Court ’ s analys is, such scrutiny should a p ply

to the enforcement of rights under any statute enacted ‘ for a public reason. ’ ” ] .) “ Th e se requireme nts were foun ded on the premise that certai n sta tut ory rights are unwaivable. ” ( Little v.
Auto Stiegler, Inc. (2003) 29 Cal.4 th 1064, 1076 .) P arties t o an

ar bitration must have discovery “sufficient to adequately
arbitrate their sta tutory cl a im

, includin g access to e ssential
documents and witness es, a s d etermined by the arbitrator(s) and subject t o limited judicial review p ursu ant to Code of Civil
Pr o ce dure se ction 1286.2. ” ( Armendariz

, at p. 10 6 .) Here, o ver two years of di sco v er y, Madison propounded

more t ha n 80 written discovery requ ests on USBI

, obtained two evidentiary hearing co ntinuances

, an d reached agreeme nt with
USBI after she filed three m otions to compel to produce spe cific
docum ents relating t o h e r commission history and deductions

. USBI p roduc ed over 2 0 ,000 pag es of documents

. Th is dis covery includ e d USBI’s annu al compensa ti on plans signed by Madis on detail ing how financial adviso r s earned c ommissions and other
incentive pay , Madison ’s entire detail ed pa y history and monthly incentive pay det ail

, and Ma di son’s 2010

- 2012 monthly

co m m ission report s show ing revenu e , deductio ns and adjustm ents made to Mad ison’s advanc ed commissions. Over
USBI ’ s objections

, and with the b enefit of mu ltiple continu ances, Madison p arti cipa te d in fo ur days of dis co very h earin g s

. Ultimately, t he p anel con cluded USBI did n ot improperly
withhol d any documents

.21 Notwithstanding US BI ’ s volu minous do cument pro duction
Madis o n contends s he still did not rece ive sufficient discovery regarding the adj us tments and rec onc ili ations m ade t o her
adva n ce commissio ns or “ evidence that would enable her to show
that USBI did not have a legitimate re ason for taking back her earned wages. ” “ ‘ [A] dequate ’ discovery does not mean unfettered
disc overy , ” an d “ [u] lti mately it is up to the arb i trat or an d t he

re viewing court to bala n ce the need for simplicity in arbitration
with the discov ery n eeds of the parties. ” ( Mercuro, supra,
96 C al .App.4th at p. 184

. ) Madison prop ounded and received more than adequate disc overy to vindica te her statu tory rig hts a s required under Armen dariz

.

D

. The Arbitr ation Decision Was Sufficiently Detailed T o Permit Judici a l Review
Madison contend s the w ritte n arbitratio n decision further
violates Arme n dari z because it lacked sufficie nt detail and fail e d

to set forth re asons for the rulin g s made

. As not ed, Armendariz

req uires arbitration s to result in “a w ritten decision that will permit a li mit ed form o f judicial revi ew .” ( Armendariz, supra,
24 Cal.4th at p. 91.) T he arbitrat or “ mus t issue a written
arbitrati on de c is ion t hat w ill revea l

, however b rief ly, the essential findings and conclusions on which t h e award is ba sed.” ( Id. at p. 10 7.)
The arbit ration award in this case satisfies that requirement. The 10

- pa ge decisi on i ncludes sufficient clarity and
d e tail tha t we c an review the panel ’ s con clus ion rejecting
Madison ’ s claims under sections 201, 2 0 3, and 2802 based on its f inding that Madison ’ s pa ychecks consisted of commission
advances rather than e arned w ages , a nd its c onclusio n that she22

received adeq u a te disco very

. As did the trial court, we a lso fin d unpersuasive Madison ’ s argument she did not receive a fully

reason ed a ward be cause it did not include discussion of her Penal Code secti on 496 , sub division (a)

, claim s or attempt ed section 221
clai m that the pane l dis mis sed . The award noted t he p anel ’ s ruling s on USBI ’ s motion to dismiss the Penal Code and
section 221 cla i m s , which adequately reveal s the pan el ’ s reason for not discussi ng those c laims furth e r

. Regarding the
sectio n 221 claim

, Madison cite s no aut horit y re quiring an arbitration dec ision to discuss a claim n ot assert ed in the S ta tement of C lai m and d ismissed aft er being untimely raised at the arbitr ation hearin g , and whe re the pane l explained i ts reasoning for the d is m i ssal on the re cord

. T he pa n el ’ s decision allow s judicial revie w sufficient t o

ensu re the panel complied with the requir ements of th e statute s

o n which Madison b ased h er claims

.23 DISPOS ITION
Th e judgme nt confirmi n g the arbitra tion award is affirmed

. U SBI shall recover its costs o n appe al.

H OWARD

, J

. *

We co ncur:

SEGAL

, Acting P. J

.

FEUER, J.

* Judge of the Marin County Superior Court, assigned by the Chief Justice p ursuant to article VI, sec t ion 6 of the Calif ornia Constitution.