Filed 7/8/14 Rebolledo v. Tilly’s, Inc. CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

FOURTH APPELLATE DISTRICT

DIVISION THREE

MARIA REBOLLEDO,

 Plaintiff and Respondent,

v.

TILLY’S, INC. et al.,

 Defendants and Appellants.

 G048625

 (Super. Ct. No. 30-2012-00616290)

 O P I N I O N

Appeal from an order of the Superior Court of Orange County, Steven L. 

Perk, Judge. Affirmed.

Sheppard, Mullin, Richter & Hampton, Ryan D. McCortney and David Van 

Pelt for Defendants and Appellants.

The Cooper Law Firm and Scott B. Cooper; The Carter Law Firm and 

Roger R. Carter; The Phelps Law Group and Marc H. Phelps for Plaintiff and 

Respondent.
2

Tilly’s Inc. and World of Jeans & Tops, Inc. (hereafter collectively referred 

to in the singular as Employer) appeal from the trial court’s order denying its motion to 

compel arbitration of Maria Rebolledo’s putative class action regarding statutory wage 

claims. We agree with the trial court’s conclusion the parties’ arbitration agreement 

expressly excluded statutory wage claims from the arbitration obligation. The order is 

affirmed.

I

Employer hired Rebolledo to work in its warehouse from July 6, 2000, to

December 28, 2001. She was rehired on January 28, 2002, and terminated October 30, 

2012. In December 2012 she filed a lawsuit on behalf of herself and a putative class of 

“similarly situated” persons. In February 2013 she filed a first amended complaint, the

operative complaint, alleging the following four causes of action against Employer: 

(1) failure to provide meal periods; (2) failure to provide rest periods; (3) failure to pay 

wages of terminated or resigned employees; (4) knowing and intentional failure to 

comply with itemized wage statement provisions; (5) violations of the unfair competition 

law; and (6) enforcement of Private Attorneys General Act of 2004. 

A. Motion to Compel Arbitration

On March 20, 2013, Employer filed a motion to compel arbitration and 

dismiss the class claims. It supplied the arbitration agreement Rebolledo signed in 2004

(hereafter the 2004 Agreement). Rebolledo opposed the motion arguing the agreement 

expressly excluded the claims made in her lawsuit and was invalid. In addition, 

Rebolledo argued the agreement was unconscionable for the following reasons: (1) due 

to language barriers, she did not understand the terms; (2) the agreement did not attach 

any rules of arbitration or specify which rules applied; (3) the agreement lacked mutuality 

and unfairly favored Employer; (4) it was an adhesion contract; and (5) it was 

substantively unconscionable. 
3

To support her opposition, Rebolledo attached her declaration written in 

Spanish. The translation provided to the court stated, “I speak almost no English. I do 

not read or write in English. Spanish is my first and only language. All of my oral 

communications with my supervisors . . . have been in Spanish.” She added that at 

various times during her employment she was given documents to sign. She declared,

“These documents were presented to me by one of my superiors. The contents of the 

documents were not explained to me, and the superiors told me not to worry about the 

documents because they contained nothing bad. I was told that I was required to sign 

these documents. I witnessed co-workers of mine being presented with documents to 

sign in the same way.”

Rebolledo did not recall signing the 2004 Agreement and she believed, “I 

was given this document with no explanation of what the document said, no opportunity 

to ask questions about it, and not enough time to review and consider the document 

before signing. I also believe I was told that I was required to sign the document.”

Rebolledo stated she could not read or understand the 2004 Agreement because it was 

written in English. 

In its reply motion, Employer refuted all the points raised by Rebolledo. In 

addition, Employer provided evidence Rebolledo signed two additional arbitration 

agreements on June 28, 2001 (hereafter the 2001 Agreement), and on August 15, 2005 

(the 2005 Agreement). The Employer noted Rebolledo also executed an employment 

application in July 2000 in which she agreed to sign an arbitration agreement if she were 

to be employed. Employer asserted all the arbitration agreements contained in bold 

capital letters above the signature line a clear warning to Rebolledo that she was giving 

up her right to a jury trial and to appeal the arbitrator’s decision.

1. 2001 Employment Application & Employment Agreement.

Rebolledo’s employment application requested her employment history and 

contained four paragraphs written in very small type font immediately above the space 
4

provided for her signature. She placed her initials next to each paragraph. The first 

paragraph related to certifying the information provided in her employment history. The 

second paragraph authorized Employer to investigate her references and background. 

The third was an agreement to arbitrate any disputes arising out of submission of the 

application. In addition, it stated “I understand that if I am offered employment . . . I will 

be asked to sign a mediation/arbitration agreement that applies to disputes arising from 

my employment with [Employer].” The fourth paragraph clarified the application was 

not an employment contract. 

Rebolledo started working June 7, 2000. On June 28, 2001, she signed a 

two-page document entitled, “Tilly’s Employment Agreement.” The first page contained 

the statement employment was at will and a provision stating Rebolledo agreed to read 

and follow the terms contained in the Employer’s handbook. The remaining page and 

one-half were devoted to information regarding mediation and arbitration. 

In the 2001 Agreement the parties agreed to mediate “any dispute arising 

out of” employment, except “workers’ compensation claims, unemployment insurance[,] 

and matters governed by the California Labor Commissioner[.]”

The arbitration provision provided as follows: “Arbitration. In the event 

mediation does not resolve the parties’ dispute, Employee and [Employer] agree to 

submit all disputes arising from employment (excepting workers’ compensation claims, 

unemployment insurance[,] and matters governed by the California Labor 

Commissioner), including[,] but not limited to breach of contract, wrongful termination,

violation of public policy, discrimination, and harassment to binding arbitration with the 

American Arbitration Association (‘AAA’) under the AAA National Rules for the 

Resolution of Employment Disputes.”

The next paragraph stated Orange County, California was the proper venue 

for any arbitration proceedings. The 2001 Agreement provided: “If Employee and 

[Employer] are unable to agree on a neutral arbitrator, [Employer] will obtain a list of 
5

arbitrators from [AAA]. Employee (first) and then [Employer] will alternately strike 

names from the list until only one name remains.”

In the next paragraph, the parties agreed Code of Civil Procedure 

section 1283.05 would govern discovery conducted before arbitration and the arbitrator 

would conduct a hearing based on AAA rules. The Employer stated the arbitrator would 

issue a written opinion and award. “Employee and [Employer] agree that arbitration is 

the exclusive forum for resolving all disputes arising out of or involving Employee’s 

employment with [Employer] or the termination of that employment, including, but not 

limited to, actions for [w]rongful [t]ermination, [d]iscrimination, [h]arassment, or any 

violation of public policy (with the exception of claims for workers’ compensation, 

unemployment insurance and any matter within the jurisdiction of the California Labor 

Commissioner); provided, however, that either party may file a request with a court of 

competent jurisdiction for ‘provisional remedies’, including, but not limited to 

injunctions and restraining orders, pending resolution of any dispute through the 

arbitration procedure set forth herein.” Because it is relevant to our analysis anon, we 

point out the 2001 Agreement defines the type of claims excluded from arbitration as 

including both “matters governed by” and “matter[s] within the jurisdiction” of the 

California Labor Commissioner. In drafting the agreement, Employer treated the two 

phrases as being interchangeable.

The final paragraph of the 2001 Agreement discussed the payment of 

arbitration costs and fees: “[Employer] agrees to pay all reasonable arbitration costs that 

would exceed costs Employee would pay in court. The parties are responsible for their 

own attorney[] fees.” The final statement of the agreement, written in capital letters and 

bold type, stated, “Employee and [Employer] acknowledge they are giving up their right 

to a jury trial and to appeal the arbitrator’s decision.” (Capitalization and bold omitted.) 

The agreement contained Rebolledo’s signature but Employer did not sign it.
6

2. The 2004 Agreement 

Rebolledo was rehired on January 28, 2002. In March 2004, during this

second period of employment, she signed a half-page document entitled, 

“employmentagreement [sic].” It contained the following short paragraph: “Employee 

and [Employer] agree that arbitration is the exclusive forum for resolving all disputes 

arising out of or involving Employee’s employment with [Employer] and the termination 

of that employment, including, but not limited to, actions for [w]rongful [t]ermination, 

[d]iscrimination, [h]arassment, or any violation of public policy (with the exception of 

claims for workers’ compensation, unemployment insurance and any matter within the 

jurisdiction of the California Labor Commissioner); provided, however, that either party 

may file a request with a court of competent jurisdiction for ‘provisional remedies’, under 

Code of Civil Procedure [s]ection 1281.8, pending resolution of any dispute through the

arbitration procedure set forth herein.” (Italics omitted.) As in the 2001 Agreement, 

Employer agreed to pay whatever arbitration costs exceeded the costs of litigation and 

specified each side would bear their own attorney fees. The final statement of the 

agreement, written in capital letters and bold type, stated, “Employee and [Employer] 

acknowledge you are both giving up your right to a jury trial and to appeal the arbitrator’s 

decision.” (Capitalization and bold omitted.) The agreement contained Rebolledo’s 

signature and the signature of the Employer’s director of human resources. It did not 

contain many of the details concerning arbitration described in the 2001 Agreement. 

3. The 2005 Agreement

On August 15, 2005, Rebolledo signed the Employer’s 

“handbookacknowledgement [sic].” Like the 2004 Agreement, the document is half a 

page long and contains the identical arbitration provisions, with one exception: This 

document does not include the phrase exempting from the agreement “any matter within 

the jurisdiction of the California Labor Commissioner.” Other than the title, there is no 
7

other mention of a handbook within the document. Rebolledo signed the document. 

There was no place on the agreement for Employer’s signature. 

Counsel for Rebolledo filed a response arguing the reply brief contained 

several new pieces of evidence. Counsel argued these documents did not prove 

Rebolledo could read and understand English, or that she understood her dispute would 

be subject to arbitration. To the contrary, the evidence “confirm[ed] . . . [Employer] 

placed a variety of conflicting and confusing arbitration ‘agreements’ in front of its 

employees and required them to sign without ever confirming that the employees could 

read, let alone understand, what they were signing.” Rebolledo provided a supplemental 

declaration (written in Spanish but accompanied by an English translation). Rebolledo 

stated, “I have had the opportunity to review[] a document entitled ‘Employment 

Application,’ . . . . The handwriting on the document, besides the signature and the 

initials to the left of the text in the bottom section of the document, is not mine. This is 

the handwriting of another person who read the application’s questions to me in Spanish, 

to whom I told my answers in Spanish, and who then translated my answers and filled out 

the paper in English.”

B. Supplemental Briefing

After considering oral argument the court took the matter under 

submission. Three days later it issued a minute order continuing the hearing 10 days to 

permit the parties to file supplemental briefs regarding the execution and enforceability of 

the 2005 Agreement. 

Employer submitted a supplemental brief. It argued the court’s tentative 

ruling was incorrect. Employer asserted the 2005 Agreement was bilateral even though it 

was missing Employer’s signature. It maintained the 2005 Agreement was enforceable. 

Rebolledo filed supplemental briefing, arguing the 2005 Agreement, like 

the 2001 and 2004 Agreements, was procedurally and substantively unconscionable and 
8

should not be enforced. Rebolledo submitted another supplemental declaration. She 

repeated she did not read, write, or speak English, and Spanish was her first and only 

language. She spoke to her supervisors only in Spanish. She restated her recollection 

that her supervisors gave her documents to sign at various times during her employment. 

The documents were not explained to her and she was required to sign them. She 

remembered being told the documents contained nothing bad. She stated the 2005 

Agreement “appears to contain my signature.” However she clarified, “While I do not 

have a specific recollection of signing this document, I have noticed on the ‘handbook 

acknowledgment’ [2005 Agreement] that the blank titled ‘Employee Signature’ is not in 

my handwriting. I believe this document was presented to me by Maria Pena, a former 

supervisor. Ms. Pena would occasionally bring documents around for me to sign while at 

[her place of employment], and she always did it while I was working on the line. I was 

just told that the Company required me to sign, so I should sign, and I did.” Rebolledo 

clarified no one explained what the document said, she had no opportunity to ask 

questions about it, and she was not given time to review it. She was told signing was a 

requirement. She was not given a copy of the document and it was “presented to [her] 

with no opportunity for translation.” She added, the Employer’s personnel, including but 

not limited to Ms. Pena, were aware she could not read or write English and could speak 

very little English. “All of my communications with them were in Spanish.”

C. The Trial Court’s Ruling

The trial court issued a minute order denying Employer’s motion to compel 

arbitration. It ruled as follows with respect to the 2001 Agreement: (1) the 2000 

employment application was superseded by the 2001 Agreement; (2) the 2001 Agreement 

was not translated for Rebolledo; (3) the 2001 Agreement “expressly exclude[d] ‘any 

matter within the jurisdiction of the California Labor Commissioner.’ The Labor 

Commission[’s] jurisdiction is not limited to claims filed by a [l]itigant[]”; (4) “This 

language of the [2001] Agreement is broad enough to include claims that have not been 
9

filed[]”; (5) “The Commission can also assert its jurisdiction on matters under its own 

authority. The current claims could be subject to the Commission[’s] jurisdiction and 

are, therefore, expressly excluded[]”; and (6) “By its express terms the Agreement 

survived [Rebolledo’s] termination.”

With respect to the 2004 Agreement, the court made the following findings: 

(1) “The language of this 2004 Agreement does not by its terms supersede the 2001 

Agreement[]”; (2) The 2004 Agreement “expressly excludes ‘any matter within the 

jurisdiction of the California Labor Commissioner.’ The Labor Commissioner’s

jurisdiction is not limited to claims filed by a [l]itigant. This language of the 2004 

Agreement is broad enough to include claims that have not been filed. The Commission 

can also assert its jurisdiction on matters under its own authority. The current claims 

could be subject to the Commission’s jurisdiction and are, therefore, expressly 

excluded[]”; (3) the agreement is “expressly unenforceable due to the lack of signatures 

of the ‘President, Senior Vice President and Director of Human Resources . . .’ which are 

needed to change the policy. This agreement clearly states that the signatures’ . . . of all 

three must by obtained.’ There are no [Employer’s agents] signatures on this agreement. 

It lacks mutuality.”

The court also determined the 2005 Agreement was unenforceable, stating, 

“This document is a modification of the prior agreements because the language in the 

[2005 Agreement] is changed. It, however, does not expressly supersede the 2001 and 

2004 Agreements. Although plaintiff has signed the document there is no indication that 

the document was translated for her or that she understood the terms of the handbook. 

(Her declaration attached to the opposition indicates she does not speak or understand 

English and did not understand the term ‘arbitration’.)”

The court also noted, “The 2001 . . . Agreement (which is never stated to be 

superseded) requires the signatures of [three] executives of [Employer] to modify it and 

they are not on this document. Although the [E]mployer can unilaterally modify an 
10

employment contract there must be reasonable notice of their intent to do so and that is 

lacking here. This [2005 Agreement] also is illusory in that it does not state or identify 

the rules of the arbitration to be conducted which are material term[s] missing from the 

agreement.”

II

A. Applicable Law and Standard of Review

“There is a strong public policy in favor of arbitration. [Citations.] [¶] 

Under both the [FAA] [citation] and the California Arbitration Act (CAA; [citation]), 

arbitration agreements are valid, irrevocable and enforceable except upon grounds that 

exist for revocation of the contract generally. [Citations.]’ [Citation.] ‘“[A]rbitration is 

a matter of contract and a party cannot be required to submit to arbitration any dispute 

which he has not agreed so to submit.” [Citations.]’ [. . . see Sparks v. Vista Del Mar 

Child & Family Services (2012) 207 Cal.App.4th 1511, 1518 [‘[b]ecause arbitration is a 

contractual matter, a party that has not agreed to arbitrate a controversy cannot be 

compelled to do so’].)” (Mendez v. Mid-Wilshire Health Care Center (2013) 

220 Cal.App.4th 534, 540-541 (Mendez).)

“A trial court must grant a petition to compel arbitration ‘if it determines 

that an agreement to arbitrate the controversy exists.’ [Citations.] There is, however, ‘no 

public policy in favor of forcing arbitration of issues the parties have not agreed to 

arbitrate.’ [Citation.] Thus, in ruling on a motion to compel arbitration, the court must 

first determine whether the parties actually agreed to arbitrate the dispute. [Citations.] 

General principles of California contract law guide the court in making this 

determination. [Citations.]” (Mendez, supra, 220 Cal.App.4th at p. 541.)

“‘Ordinarily, we review a denial of a petition to compel arbitration for 

abuse of discretion. [Citation.] However, where the trial court’s denial of a petition to 

arbitrate presents a pure question of law, we review the order de novo. [Citation.]’ 

[Citations.]” (Mendez, supra, 220 Cal.App.4th at p. 541.) In this case, the trial court’s 
11

ruling did not hinge on the credibility of any extrinsic evidence and because Employer 

did not dispute the assertions Rebolledo made in her declarations, the court’s ruling was 

based on its legal interpretation of the arbitration agreements. Accordingly, our review is 

de novo.

B. Legal Principles Regarding Interpretation of Arbitration Agreements

“The right to arbitration depends upon contract; a petition to compel 

arbitration is simply a suit in equity seeking specific performance of that contract. 

[Citations.] There is no public policy favoring arbitration of disputes which the parties 

have not agreed to arbitrate. [Citation.]” (Engineers Architects Assn. v. Community 

Development Dept. (1994) 30 Cal.App.4th 644, 653.) “‘Whether the parties formed a 

valid agreement to arbitrate is determined under general California contract law. 

[Citations.] Hence, when ruling on a petition to compel arbitration, the superior court 

may consider evidence on factual issues such as contract formation bearing on the 

threshold issue of arbitrability. [Citation.]’ [Citations.]” (Hotels Nevada v. L.A. Pacific

Center Inc. (2012) 203 Cal.App.4th 336, 348.)

“The basic goal of contract interpretation is to give effect to the parties’

mutual intent at the time of contracting. [Citations.] When a contract is reduced to 

writing, the parties’ intention is determined from the writing alone, if possible. 

(Civ. Code, § 1639.) ‘The words of a contract are to be understood in their ordinary and 

popular sense.’ (Civ. Code, § 1644; see also Lloyd’s Underwriters v. Craig & Rush, Inc. 

(1994) 26 Cal.App.4th 1194, 1197-1198 [‘We interpret the intent and scope of the 

agreement by focusing on the usual and ordinary meaning of the language used and the 

circumstances under which the agreement was made’].)” (Founding Members of the 

Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 

109 Cal.App.4th 944, 955.) “Finally, ambiguities in standard form contracts are to be 

construed against the drafter. [Citations.] This court must apply [the above] basic 

principles [of contract interpretation] to determine whether [Rebolledo’s] causes of action 
12

fall within the scope of the arbitration clause.” (Victoria v. Superior Court (1985) 

40 Cal.3d 734, 738 [arbitration has become “accepted and favored” method, “[h]owever, 

judicial enthusiasm for alternative methods of dispute resolution must not in all contexts 

override the rules governing the interpretation of contracts”].)

C. Within the Labor Commissioner’s Jurisdiction 

The court determined the 2001 and 2004 Agreements did not compel 

arbitration of Rebolledo’s claims because both agreements “expressly exclude[d] ‘any 

matter within the jurisdiction of the California Labor Commissioner.’” The court 

determined this provision was broadly written to include any statutory wage claim not 

actually filed with the Labor Commissioner, as long as the claim theoretically could have 

fallen within the Labor Commissioner’s authority. The court reasoned the various 

Labor Code violations raised in the case were of the type that could have been considered 

by the Labor Commissioner, and therefore, were exempted from arbitration. Before 

addressing Employer’s assertion the court was wrong, a brief summary of the Labor 

Commissioner’s scope of authority and jurisdiction is instructive.

“The California Labor Commission is part of the Department of Labor 

Standards and Enforcement (DLSE), which is under the Department of Industrial 

Relations. The DLSE enforces wage and labor standards and all labor laws not 

specifically delegated to another agency (e.g., Fair Employment and Housing 

Administration, Division of Occupational Safety and Health, or Division of Workers’

Compensation).” (Judith S. McIlwee, Circuit City Meets the California Labor 

Commissioner: Does the FAA Preempt Administrative Claims? (2004) 40 Cal.W.L.Rev. 

383, 396.)

“[I]f an employer fails to pay wages in the amount, time, or manner 

required by contract or statute, the employee may seek administrative relief by filing a 

wage claim with the [Labor Commissioner] or, in the alternative, may seek judicial relief 

by filing an ordinary civil action for breach of contract and/or for the wages prescribed by 
13

statute.” (Post v. Palo/Haklar & Associates (2000) 23 Cal.4th 942, 946 (Post).) With 

respect to the first alternative, the Labor Commissioner has broad authority to reject, 

investigate, adjudicate, or litigate (on behalf of the employee), depending on the nature of 

the employee’s claim. (See Lab. Code, §§ 96, 96.7, 98, 98.3, 1193.6.)1

“[S]ection 98 includes remedial procedures for adjudicating wage claims, 

enforced by the [DLSE] under the direction of the [C]ommissioner. It states that the 

[C]ommissioner ‘shall have the authority to investigate employee complaints.’ (. . . § 98, 

subd. (a).) The [C]ommissioner ‘may provide for a hearing in any action to recover 

wages, penalties, and other demands for compensation.’ (Ibid.) [¶] . . . [¶] If the 

[C]ommissioner decides to accept the matter and conduct an administrative hearing—

commonly known as a ‘Berman hearing’ after the name of its sponsor, then 

Assemblyman Howard Berman—he or she must hold the hearing within 90 days . . . .”

(Post, supra, 23 Cal.4th at p. 946.) “The Berman hearing procedure is designed to 

provide a speedy, informal, and affordable method of resolving wage claims. [Citation.] 

[As explained by our Supreme Court,] ‘the purpose of the Berman hearing procedure is to 

avoid recourse to costly and time-consuming judicial proceedings in all but the most 

complex of wage claims.’ [Citation.]” (Id. at p. 947.) 

In addition to conducting a Berman hearing, the Labor Commissioner has 

the option of filing a civil action. (§§ 98.3 & 1193.6 [action to recover unpaid wages].) 

When the Labor Commissioner takes action to collect wages or benefits on behalf of a 

worker, the Commissioner acts as a trustee of the monies collected and has an affirmative 

duty to make a diligent search to locate any worker for whom unpaid wages or benefits 

have been collected. (§ 96.7.)

 

1 All further statutory references are to the Labor Code, unless otherwise 

indicated.
14

The Legislature has also empowered the Labor Commissioner to enforce 

the labor laws (including IWC Wage Orders), by (1) issuing subpoenas compelling 

witness attendance and production of documents, (2) accepting assignment of wage and 

other claims such as enforcement of workers’ compensation awards, mechanics’ liens, 

etc., (3) collecting wages and benefits without the worker’s assignment, (4) seeking 

injunctions against willful violations of state wage and hour laws. (See Chin et al., Cal. 

Practice Guide: Employment Litigation (The Rutter Group 2013) ¶ 11:1342, p. 11-150 to 

11-151.)

Certain employment matters cannot be considered by the Labor 

Commissioner. The Commissioner has the duty to determine if the employee’s claim 

falls within his or her jurisdiction before proceeding forward. For example, section 98

authorizes the Labor Commissioner to only “prosecute” claims “properly before” the 

Commissioner. It specifies the Labor Commissioner “shall determine all matters arising 

under his or her jurisdiction.” (§ 98, subd. (a)). Some examples of employment matters 

that do not fall within the jurisdiction of the Labor Commissioner are: (1) claims 

involving bankruptcies or probate; (2) claims involving mechanics, loggers, or minors; 

(3) preferred wage claims in assignment for the benefit of creditors; (4) discrimination 

and retaliation complaints under sections 98.6, 132a, 432.2, 6310-6312; or (5) matters 

where criminal or civil citations are issued such as for child labor law violations, 

unlicensed contractors, payday violations, welfare benefits, etc. (See Chin et al., Cal. 

Practice Guide: Employment Litigation, supra, ¶ 11:1351, p. 11-152.)

That there are definite limits to the Labor Commissioner’s jurisdiction was 

demonstrated in Noble v. Draper (2008) 160 Cal.App.4th 1, 12-13 (Noble). In that case, 

the court held the Labor Commissioner has no jurisdiction “to adjudicate tort claims 

involving conduct that predated the employment relationship or unfair business practice 

claims under the Business and Professions Code.” (Id. at p. 16.) The case involved 

foreign restaurant workers who brought an action claiming defendant induced them to 
15

come to the United States and work in a restaurant but they were terminated and not 

compensated for their work. (Id. at p. 6.) The workers first pursued claims for unpaid 

wages before the Labor Commissioner. (Id. at p. 7.) Following the administrative 

hearing, the workers filed a civil action alleging fraud, negligent misrepresentation, false 

advertising, intentional infliction of emotional distress, and a statutory claim of unfair 

business practices under the Business and Professions Code. Defendant argued that after 

choosing an administrative forum, the workers’ claims were barred by res judicata. 

(Ibid.) The court disagreed. It reasoned, “Administrative agencies have only such 

powers as have been conferred on them, expressly or by implication, by Constitution or 

statute. [Citation.] The Labor Code generally gives the [DLSE] (of which the Labor 

Commissioner is the Chief) the authority to enforce the provisions of the Labor Code and 

all state labor laws the enforcement of which is not specifically vested in any other 

officer, board, or commission. (§§ 21, 79, 82, 95.) None of the claims at issue in this 

appeal alleged violation of any provision of the Labor Code or other state labor laws.” 

(Noble, supra, 160 Cal.App.4th at pp. 12-13.) The court concluded the civil action was 

not precluded by the worker’s prior pursuit of wage claims before the Labor 

Commissioner. 

In the case before us, the parties agree Rebolledo’s claims fall within the 

Commissioner’s jurisdiction. Rebolledo alleged Employer failed to (1) provide meal 

periods and rest periods “or wages in lieu thereof” in violation of sections 226.7 and 512; 

(2) pay wages of terminated or resigned employees as required by sections 201 and 202; 

and (3) comply with itemized wage statement provisions in violation of section 226 and 

1174, subdivision (d). She alleged these violations entitled her to recover civil penalties 

under the Private Attorneys General Act of 2004 (§§ 2698 et. seq). 

Section 95 provides the Labor Commissioner “may enforce the provisions 

of [the Labor Code] and all labor laws of the state the enforcement of which is not 

specifically vested in any other officer, board or commission.” Clearly Rebolledo sought 
16

enforcement of various Labor Code provisions and labor laws in her lawsuit. Her 

statutory wage claims fall into the category of “matters governed by” and “matter[s] 

within the jurisdiction” of the Labor Commissioner. 

D. Statutory Wage Claims Expressly Excluded from the Arbitration Agreement

Employer admits the 2001 and 2004 Agreements explicitly exclude certain 

claims from the arbitration obligation. It asserts these exceptions do not apply in this 

case and Rebolledo’s statutory wage claims must be arbitrated. We disagree.

The sole issue presented in this appeal is simply a matter of contract 

interpretation. We will begin by considering the 2001 Agreement. The parties generally 

agreed to arbitrate all employment disputes but excluded several types of employee

claims from arbitration. The 2001 Agreement expressly exempted from arbitration the 

following three broad categories: (1) workers’ compensation claims; (2) unemployment 

insurance claims; and (3) “matters governed by the California Labor Commissioner[.]”

(Italics added.) With respect to the third category of claims, the 2001 Agreement also 

defined them as including “any matter within the jurisdiction of the California Labor 

Commissioner[.]” (Italics added.) 

On appeal, the parties offer different interpretations of the phrases “matters 

governed by” and “matter[s] within the jurisdiction” of the Labor Commissioner. Both 

sides assert the language is not ambiguous. As we will explain more fully below, we 

conclude the language plainly stated Rebolledo’s statutory wage claims were exempted 

from the arbitration agreement. The phrases at issue served to define the type of 

exempted employment claims as including disputes an employee could have brought

before the Labor Commissioner. The parties intended for employment disputes falling 

outside the scope of that definition to be arbitrated. We reject Employer’s strained 

interpretation that the language served to exclude wage claims based on the forum 

selected by the employee i.e., excluding wage claims actually brought before the Labor 

Commissioner. 
17

As explained earlier in this opinion, the scope of the Labor Commissioner’s 

jurisdiction is limited by statute. (Noble, supra, 160 Cal.App.4th at pp. 12-13 

[Commissioner has “only such powers as have been conferred” on him or her by 

Constitution or statue].) By defining the type of excluded claims as being limited to 

“matters governed by” or “within the jurisdiction” of the Commissioner, the parties 

intended to exclude employment claims alleging violations of the Labor Code or other 

state labor law. (§§ 21, 79, 82, 95.)

We reject Employer’s assertion “within the jurisdiction” meant claims 

actually filed with the Commissioner. When an employee’s claim falls “within the 

jurisdiction” of the Commissioner, the employee has the option of filing the statutory 

wage claim before the Commissioner or in superior court. (Post, supra, 23 Cal.4th at 

p. 946.) The employee has two forums for bringing such claims. Moreover, parties can 

agree to arbitrate statutory wage claims regardless of the chosen forum. (See AT & T 

Mobility LLC v. Concepcion (2011) 563 U.S. 1740 (Concepcion); Sonic-Calabasas A, 

Inc. v. Moreno (2013) 57 Cal.4th 1109, 1124 (Sonic-Calabasas A, II).)2 Accordingly, the 

ordinary meaning of the phrases at issue clearly relates to defining the nature of a claim, 

not where it is adjudicated. Indeed, to adopt Employer’s interpretation we would have to 

ignore the portion of the agreement defining the exempted claims as “matters governed”

by the Labor Commissioner because this terminology does not suggest a particular forum 

of litigation, only a type of subject matter. 

 

2 In its opening brief, Employer argued a Berman hearing is an unwaivable 

right that an employee cannot be asked to relinquish in favor of arbitration. This is no 

longer the law. The United States Supreme Court, pending its Concepcion opinion, 

granted review and vacated our Supreme Court’s decision Sonic-Calabasas A. Inc. v. 

Moreno (2011) 51 Cal.4th 659 (Sonic-Calabasas A, I). In its reply brief, Employer 

acknowledges our Supreme Court reconsidered Sonic-Calabasas A, I in light of the 

Concepcion opinion. (Sonic-Calabasas A, II, supra, 57 Cal.4th 1109.) An employee’s 

right to seek a Berman hearing can be waived as a condition of employment. (Id. at 

p. 1124.)
18

If Employer intended to exclude only statutory wage claims brought in one 

forum over another it could have narrowly drafted and defined the phrases “matters 

governed” and “matter[s] within the jurisdiction” to mean “claims actually filed with the 

commissioner” or “claims being litigated in a Berman hearing.” Alternatively, Employer 

could have clarified employee was agreeing to arbitrate “statutory wage claims not 

brought before the Labor Commissioner.” However, without language qualifying or 

limiting the forum for statutory wage claims, an employee would reasonably understand 

the plain language of exclusion covered all statutory wage claims regardless of where 

they were adjudicated. (Victoria, supra, 40 Cal.3d at p. 744 [we must “‘give effect to the 

parties’ intentions, in light of the usual and ordinary meaning of the contractual language 

and the circumstances under which the agreement was made’”].) We would have to 

rewrite the agreement to expressly limit the exclusion to claims actually filed in a 

particular forum. This we cannot do.

Employer argues that because the Labor Commissioner never asserted 

jurisdiction over Rebolledo’s wage claims she must arbitrate them. Employer provides 

case authority describing the circumstances when the Labor Commissioner loses its 

jurisdiction over a worker’s wage claim. These cases do not assist Employer. In Post, 

supra, 23 Cal.4th at page 947, the Supreme Court held the timely filing of an appeal

terminates the Commissioner’s jurisdiction. Similarly, in Murphy v. Kenneth Cole 

Productions, Inc. (2007) 40 Cal.4th 1094, 1117, another case cited by Employer, our 

Supreme Court verified the appeal of the Commissioner’s decision is a de novo trial of 

the wage dispute. This case does not concern the appeal of a Labor Commissioner’s 

award.

Employer also maintains these cases prove the Labor Commissioner lost 

jurisdiction of Rebolledo’s lawsuit because she filed her action in superior court. This 

argument misses the point. The issue on appeal is not whether we should apply a “first in 

time” approach to jurisdiction in this case. We need not decide whether the Labor 
19

Commissioner’s authority to investigate wage violations is trumped once a worker files a 

lawsuit in superior court. In ruling on a motion to compel arbitration, we need only 

determine whether the parties actually agreed to arbitrate this particular kind of dispute. 

Accordingly, the dispositive issue is the clear and ordinary meaning of the phrases 

“matters governed” and “matters within the jurisdiction.” A statutory wage claim 

qualifies as a “matter governed” by the Labor Commissioner regardless of whether he or 

she is actively adjudicating the case. 

Another argument raised by Employer is that the ordinary meaning of the 

phrases at issue must be viewed in the context of the two other excluded administrativetype claims. Specifically, the agreement expressly excluded workers’ compensation 

claims and unemployment insurance claims from arbitration. Employer argues the 

arbitration agreement did not need to define “the jurisdiction” of the administrative 

agencies responsible for handling those two types of claims, i.e., the California Workers’

Compensation Appeals Board (WCAB) and the Employment Development 

Department/Unemployment Insurance Appeals Board (EDD). It explained those entities 

have “exclusive jurisdiction” over those types of claims but because the Labor 

Commissioner does not have exclusive jurisdiction over wage claims, “the language of 

the 2001 Agreement was necessary to clarify that only matters brought before the Labor 

Commissioner are excluded from the agreement to arbitrate.”

Nonsense. The only reason Employer did not need to define the scope of 

excluded workers’ compensation claims is because all workers’ compensation claims 

cannot be arbitrated as a matter of law. “The Workers’ Compensation Act (. . . § 3200 

et seq.) generally provides the exclusive remedy for employee injuries incurred in the 

course of employment. [Citation.] [¶] When the exclusive remedy rule applies (e.g., 

injured employee seeking damages for workplace injury), the employee cannot bring an 

‘action at law.’ [Citation.] [¶] The rule also bars arbitration of such disputes. 

[Citation.]” (Italics added.)
20

(Knight et al. Cal. Practice Guide: Alternative Dispute Resolution (2013) § 5:76.27, 

p. 5-64.6.) Thus, the Workers’ Compensation Act provides the exclusive remedy, and the 

WCAB is the exclusive forum for resolution of any dispute over a right or liability 

incidental to a claim for workers’ compensation benefits. 

Likewise, the parties could not have agreed to process unemployment 

insurance claims in arbitration. The EDD has exclusive jurisdiction to investigate an 

employee’s claim for unemployment benefits and make an eligibility determination. 

(See American Federation of Labor v. Unemployment Ins. Appeals Bd. (1996) 13 Cal.4th 

1017, 1024 (American Federation) [discussing California’s unemployment insurance 

program “designed to provide insurance for workers ‘unemployed through no fault of 

their own, and to reduce involuntary unemployment and the suffering caused thereby to a 

minimum’”]; Unemp. Ins. Code §§ 301, 1326 et seq.) An appeal of the EDD’s decision 

is heard by an administrative law judge. (Unemp. Ins. Code §§ 1334, 1335, subd. (c).) A 

claimant may appeal that decision to the Unemployment Insurance Appeals Board 

(Unemp. Ins. Code § 1328), and if still not satisfied “may then seek a limited trial de 

novo in the superior court in an administrative mandate proceeding.” (American 

Federation, supra, 13 Cal.4th at p. 1026; Code Civ. Proc., § 1094.5.) 

The same is not true for statutory wage claims. The Labor Commissioner 

does not have exclusive jurisdiction. Unlike other types of employment litigation (e.g., 

discrimination actions under the Fair Employment and Housing Act), there is no 

requirement that an employee exhaust administrative remedies before filing suit. (See 

Chin et al., Cal. Practice Guide: Employment Litigation, supra, ¶ 11:1441 at p. 11-160.) 

Consequently, adding the phrase “within the jurisdiction” does not serve to clarify 

Employer’s purported intent to permit its employees to request an administrative Berman 

hearing but not litigate the very same wage claims in superior court. Whereas matters 

within the jurisdiction of the WCAB must be administratively adjudicated, matters within 
21

the jurisdiction of the Labor Commissioner do not. Simply stated, a matter within the

jurisdiction need not be actually brought before the Labor Commissioner. 

Employer asserts that when the agreement was written it believed 

employees could not waive their right to administrative Berman hearings as a condition 

of employment. It recognizes this is no longer the law but asserts this was the reason 

“within the jurisdiction” was included in the agreement. If this was Employer’s intention 

the arbitration agreement was poorly drafted because the language used plainly exempted 

all statutory wage claims regardless of the forum of litigation. “The strong policy in 

favor of arbitration may not be used to permit a party to enforce provisions of an 

arbitration agreement that, as here, either do not exist or were so poorly drafted that 

another party cannot be presumed to have agreed to them. [Citations.]” (Thompson v. 

Toll Dublin, LLC (2008) 165 Cal.App.4th 1360, 1370.) As stated above, there were 

many ways Employer could have clarified only statutory wage claims actually brought

before the Labor Commissioner would be exempted.

Alternatively, Employer argues the court’s interpretation of the arbitration 

agreement is erroneous because it contradicts other key portions of the 2001 Agreement. 

Employer notes the parties expressly agreed to arbitrate discrimination and wrongful 

termination claims, yet these types of claims could also qualify as Labor Code violations,

falling within the Labor Commissioner’s jurisdiction and exempted from arbitration. 

Employer concludes, “It is impossible to reconcile these two clauses under the court’s 

interpretation. Instead, the only consistent and sensible interpretation of the 

2001 Agreement is to permit [Rebolledo] to seek administrative relief for claims actually 

initiated to the Labor Commissioner, not excluding from the agreement any claim that 

could be brought before the Labor Commissioner.”

As aptly stated by Rebolledo, any inconsistency would be of Employer’s 

own making as the drafter of the agreement and it is not a reason to stray from the usual 

and ordinary meaning of the language stated in the agreement. More importantly, when 
22

there are conflicting clauses the more specific clause controls the more general. 

Wrongful termination and discrimination claims do not just fall under the Labor Code. 

These claims may also may be brought under the Fair Employment and Housing Act 

(FEHA; Gov. Code, § 12940 et seq.) and are arbitrable. (Chin et al., Cal. Practice Guide: 

Employment Litigation, supra, ¶ 18:515, pp. 18-63 to 18-64.) Federal statutory 

discrimination claims (such as those made under Title VII, ADEA, ADA, FLSA, 

USERRA, and whistleblower claims) are also subject to arbitration. (Chin et al., Cal. 

Practice Guide: Employment Litigation, supra, ¶ 18:505-18:512, pp. 18-62 to 18-63.) 

The parties could generally agree to arbitrate wrongful termination and discrimination 

claims, and also specifically exempt from arbitration Labor Code violations. 

In any event, the dispute in this case does not relate to wrongful termination 

or a discrimination claim. We found no provision in the arbitration agreement discussing 

statutory wage claims other than the provision excluding such claim from the arbitration 

obligation. There is no internal conflict with respect to waiver of the statutory wage 

claims.

E. The 2005 Agreement

The court determined the 2005 Agreement was unenforceable, stating, 

“This document is a modification of the prior agreements because the language in the 

[2005 Agreement] is changed. It, however, does not expressly supersede the 2001 and 

2004 Agreements. [¶] Although [Rebolledo] signed the document there is no indication 

that the document was translated for her or that she understood the terms of the 

handbook. (Her declaration attached to the opposition indicates she does not speak or 

understand English and did not understand the term ‘arbitration’.)” The court also stated, 

“The 2001 . . . Agreement (which is never stated to be superseded) requires the signatures 

of three executives of [Employer] to modify it and they are not on this document. [¶] 

Although the employer can unilaterally modify an employment contract there must be 

reasonable notice of their intent to do so and that is lacking here. [¶] This [2005 
23

Agreement] also is illusory in that it does not state or identify the rules of the arbitration 

to be conducted which are material term[s] missing from the agreement.” Employer 

argues the court was wrong.

We begin by reviewing the context in which the 2005 Agreement was 

executed in comparison with the prior two arbitration agreements. The 2001 Agreement, 

unlike the 2005 Agreement, contained multiple paragraphs devoted to explaining the 

arbitration obligation in addition to describing the employee’s other terms of 

employment. The 2004 Agreement repeated the same arbitration obligation, albeit with 

less detail, in a document also called an “employment contract.” In contrast, the 

2005 Agreement was contained within a one-page handbook acknowledgement form. 

There was no evidence, or any suggestion by either party, that arbitration terms were

discussed anywhere within the handbook itself. The parties did not include a copy of the 

actual handbook, indicating it contained no information about arbitration. The 

acknowledgement form contained a one paragraph summary of the arbitration obligation. 

The acknowledgment was printed with the number “50” on the very bottom of the form, 

suggesting it was part of a larger document. Also the bottom of the document contains

the statement, “Employee Copy: Remains in Employee Handbook.” We can infer the 

acknowledgement form was likely attached to the end of the Employer’s handbook. 

Indeed, Employer maintains the 2005 Agreement was “merely” providing a “one 

paragraph summar[y] of the 2001 Agreement.” It does not suggest the 

acknowledgment’s recitation of the arbitration obligation intended to be included as one 

of the handbook’s policies.

On appeal, Employer argues the 2001 Agreement was not modified. It 

asserts the 2005 Agreement does not contain any material change from the 

2001 arbitration terms. Employer contends the court had no legal authority upon which 

to base its ruling that “a short summary” of an employer’s arbitration agreement 

“constitutes a ‘modification’ of the original agreement.” It reasons neither the 2004 or 
24

2005 Agreements expressly supersede the 2001 Agreement, suggesting it was not 

intended to alter the terms of the original obligation. We conclude this argument does not 

help Employer. If the 2005 Agreement was simply intended to contain a shortened 

summary of the 2001 Agreement, then it too encompasses the original exemption of 

statutory wage claims. We have previously ruled the parties expressly agreed to exclude 

statutory wage claims. The trial court properly denied the motion.

In its reply brief, Employer took a different approach, arguing the 

2005 Agreement would be enforceable even if it did modify the 2001 Agreement. 

Employer maintains the agreement should not be struck down as unconscionable because 

it is well established an employer can unilaterally modify an arbitration agreement as 

long as the employees receive notice of the change. Employer notes the modification 

satisfies the covenant of good faith and fair dealing because the 2005 Agreement would 

not apply to unfiled statutory wage claims accruing before 2005. We need not consider 

the merit of this argument because the original agreement could not be modified without 

the signatures of three of Employer’s executives.

As stated above, the 2001 Agreement expressly exempted statutory wage 

claims from the arbitration obligation. The 2005 Agreement does not contain this same 

express exemption. We agree with the trial court’s conclusion that for such a material 

modification to be enforceable, it required the signature of three executives. 

The 2001 Agreement addressed several different employment issues as 

follows: (1) employment was at-will; (2) employees must follow terms of the employee 

handbook; (3) any disputes must be first mediated; and (4) after mediation, disputes must 

be arbitrated. With respect to the first issue, the 2001 Agreement expressly provided the 

employee’s employment was at will, which meant the employee could be terminated at 

any time, with or without cause. 

The next paragraph of the 2001 Agreement cautioned: “Employee’s [a]t-

[w]ill status is the entire agreement between Employee and [Employer]. It supersedes all 
25

prior agreements, understandings and representations concerning Employee’s 

employment with [Employer]. Only the President, Senior Vice President and Director of 

Human Resources, acting together, may enter into a different employment agreement or 

modify [Employer’s] employment policies. All three (3) signatures must be obtained.” 

(Italics added.) 

Employer argues the italicized portion of the above provision simply meant 

signatures were required in the event an employee’s “at will” status was changed. Not 

so. The agreement plainly requires signatures to change the employee’s status or

“modify employment policies.” The word “or” is a conjunction commonly used to 

connect clauses representing alternatives. If Employer intended to require signatures 

only to change an employee’s status, there would be no need to include the phrase “or 

modify employment policies.” The signature requirement is broadly written to 

encompass much more than a status change. A contract is to be read as a whole, “so as to 

give effect to every part, if reasonably practicable, each clause helping to interpret the 

other.” (Civ. Code, § 1641.) Moreover, it is well settled contracts “are construed to 

avoid rendering terms surplusage. [Citations.]” (ACL Technologies, Inc. v. Northbrook 

Property & Casualty Ins. Co. (1993) 17 Cal.App.4th 1773, 1785.)

We recognize the 2001 Agreement does not define what “employment 

policies” require the three executive signatures. We can infer from other provisions in 

the contract that signatures were not required to modify the policies outlined in the 

employee handbook, hours, wages, or working conditions. The agreement specified, 

“[Employer] may change any and all policies or practices” in the handbook “at any time.”

In addition, it gave Employer the right to change “hours, wages and working conditions 

at any time.” 

The 2001 Agreement describes in great detail the employment policy 

requiring the mediation and arbitration of disputes. Unlike the other employment policy 

provisions, there is no provision granting the Employer a similar unilateral modification 
26

right to modify the arbitration terms. We agree with the trial court’s interpretation of the 

agreement holding arbitration would fall within the broad category of “employment 

policies” requiring the signature of three executives for any modification. And because 

the 2005 Agreement contains a material modification of the types of claims that must be 

arbitrated, it required the signature of three executives to be enforceable.3 

III

The order is affirmed. Respondent shall recover her costs on appeal.

O’LEARY, P. J.

WE CONCUR:

IKOLA, J.

THOMPSON, J.

 

3 Based on our ruling the wage claims were expressly exempted from 

arbitration obligation, and our conclusion the 2005 Agreement was an unenforceable 

modification of the original arbitration agreement, we need not address Employer’s 

argument the trial court also erred by concluding the agreements were unenforceable due 

to unconscionability concerns. Because we can affirm the court’s order for the two 

reasons discussed in this opinion, we need not say more.