Filed 5/31/23 Tielemans v. Aegion Energy Services CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

SIXTH APPELLATE DISTRICT

OTTO TIELEMANS,

Plaintiff and Appellant,

v.

AEGION ENERGY SERVICES, INC., 

et al.,

Defendants and Respondents.

 H049635

 Santa Clara County

 Super. Ct. No. 19CV349343

Otto Tielemans sued his former employer on behalf of himself and a putative 

class, asserting nine causes of action related mostly to alleged wage-and-hour violations

of the Labor Code. Defendants petitioned to compel arbitration pursuant to mandatory 

arbitration provisions in two collective bargaining agreements that bound the parties. 

Tielemans opposed the petition, arguing that (1) a union cannot prospectively 

waive its members’ right to bring statutory claims in court, (2) even if it could, the 

arbitration provisions here did not clearly and unmistakably waive that right, and (3) the 

arbitration provisions were procedurally and substantively unconscionable in numerous 

respects, and therefore should not be enforced. 

The trial court held that a union may waive its members’ right to bring statutory 

claims in court and the arbitration provisions at issue here clearly and unmistakably 

waived that right. It also determined two aspects of the arbitration provisions to be

unconscionable, but severed those portions, enforced the remainder, and granted the 

petition. 
2

On appeal, Tielemans re-states his unsuccessful arguments from below and 

contends the trial court abused its discretion by severing the offending provisions and 

enforcing the remainder of the agreements. 

We reject Tielemans’ arguments and affirm. 

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual background

Tielemans was employed as an hourly, nonexempt construction laborer by Schultz 

Industrial Services, Inc., formerly known as Schultz Mechanical Contractors, Inc. 

(Schultz), between August 10, 2016 and July 3, 2018. While employed by Schultz, 

Tielemans was a member of Local Union No. 585 in Ventura, part of the Southern 

California District Council of Laborers, affiliated with the Laborers’ International Union 

of North America, AFL-CIO (SCDCL-LiUNA). 

In March 2018, Schultz joined the Association of Construction Employers (ACE), 

thereby designating ACE as its collective bargaining representative in relation to 

specified labor organizations and their affiliates, including SCDCL-LiUNA. Earlier, on 

July 1, 2015, ACE executed a collective bargaining agreement (CBA) on behalf of its 

members with SCDCL-LiUNA, which entered on behalf of itself and its affiliated local 

unions (2015 CBA). After Schultz joined ACE, ACE notified SCDCL-LiUNA that it

represented Schultz in all collective bargaining or labor relations matters under the 2015 

CBA. 

The 2015 CBA covered the period from July 1, 2015 to June 30, 2018.1 On July 1, 

2018, ACE and SCDCL-LiUNA executed a new CBA covering the period from that date 

until June 30, 2022 (2018 CBA). The 2015 CBA and the 2018 CBA appear to be 

1 Although Tielemans had been employed with Schultz for roughly 18 months 

prior to Schultz joining ACE, he concedes on appeal that he was bound by the 2015 CBA 

and the subsequent 2018 CBA during his employment with Schultz. 
3

identical with respect to the relevant provisions at issue in this appeal—the parties have 

not identified any differences between the CBAs, other than the applicable dates. 

Among other things, both CBAs included mandatory arbitration provisions, which 

state: “[A]ll employee disputes concerning violations of, or arising under Wage Order 16 

(except as noted in the immediately preceding paragraph), the California Labor Code 

Sections identified in California Labor Code section 2699.5 as amended, the California 

Private Attorneys General Act (Labor Code section 2698, et seq.), and federal, state and 

local law concerning wage-hour requirements, wage payment and meal or rest periods, 

including claims arising under the Fair Labor Standards Act . . . shall be subject to and 

must be processed by the employee pursuant to the procedures set forth in this Appendix 

C as the sole and exclusive remedy.”2 The provisions then set forth the mandatory 

procedures for arbitrating such disputes. 

Relevant to this appeal, the arbitration provisions included language governing the 

costs of arbitration, which states: “The Contractor shall pay all fees and costs related to 

the services of the American Arbitration Association and the services of the Arbitrator; 

however, the Arbitrator may reallocate such fees and costs in the arbitration award, 

giving due consideration to the individual employee’s ability to pay.” As discussed 

below, the trial court determined that constituted an impermissible fee-shifting provision 

which Tielemans contends contributes to the overall unconscionability of the CBAs.

In addition, the arbitration provisions included language which states: “The 

Arbitrator shall not have any authority to award relief that would require amendment of 

the Master Labor Agreement or other agreement(s) between the Union and a Contractor 

or the Contractors, or which conflicts with any provision of any collective bargaining 

2 Wage Order 16 is a wage order issued by the California Industrial Welfare 

Commission that regulates wages, hours and working conditions of nonexempt 

employees in on-site construction, drilling, logging and mining industries. (Brinker 

Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1031; Cal. Code Regs., tit. 8, 

§ 11160.) 
4

agreement or such other agreement(s). Any arbitration outcome shall have no 

precedential value with respect to the interpretation of the Master Labor Agreement or 

other agreement(s) between the Union and a Contractor or the Contractors.” As 

discussed below, Tielemans contends this language contributes to the overall 

unconscionability of the CBAs because it could be interpreted to preclude claims for 

public injunctive relief. 

Lastly, the arbitration provisions included a savings clause, which provides: “It is 

not the intent of either the Contractors or the Union to violate any laws, rulings or 

regulations of any Governmental authority or agency having jurisdiction of the subject 

matter of this Agreement, and the Contractor and the Union agree that, in the event any 

provision of this Agreement is finally held or determined to be illegal or void, as being in 

contravention of any such laws, rulings, or regulations, the remainder of the Agreement 

shall remain in full force and effect, unless the part so found to be void is wholly 

inseparable from the remaining portion of this Agreement.” 

B. Procedural background

Tielemans filed his complaint in Santa Clara County Superior Court on June 19, 

2019. On August 23, 2019, he filed the operative first amended complaint (complaint), 

naming Schultz and Aegion Energy Services, Inc., as defendants.3 The complaint 

purported to bring a “class and representative action” that asserted nine causes of action: 

(1) failure to provide proper disclosure in violation of the Fair Credit Reporting Act (15 

U.S.C. § 1681b(b)(2)(A)); (2) failure to provide meal periods (Lab. Code, §§ 204, 223, 

226.7, 512, 1198); (3) failure to provide rest periods (Lab. Code, §§ 204, 223, 226.7, 

1198); (4) failure to pay hourly and overtime wages (Lab. Code, §§ 223, 510, 1194, 

1194.2, 1197, 1197.1, 1198); (5) failure to indemnify (Lab. Code, § 2802); (6) failure to 

3 Aegion Energy Services, Inc., is the parent and holding company of Schultz. We 

refer to the defendants collectively in this appeal as “Schultz.”
5

provide accurate, written wage statements (Lab. Code, § 226); (7) failure to timely pay all 

final wages (Lab. Code, §§ 201-203); (8) unfair competition (Bus. & Prof. Code, § 17200 

et seq.); and (9) civil penalties (Lab. Code, § 2698 et seq.) pursuant to the Private 

Attorneys General Act (PAGA). 

On October 23, 2019, Schultz filed a petition to compel arbitration and stay the 

proceedings, pursuant to Code of Civil Procedure sections 1281.2 and 1281.4. Schultz

argued that the second through eighth causes of action must be arbitrated pursuant to the 

arbitration provisions and both California and federal law. Specifically, Schultz 

contended that the arbitration provisions explicitly apply to all claims brought under 

Wage Order 16, the Labor Code sections identified in section 2699.5,

4

and California law 

concerning wage-hour requirements, wage payment and meal and rest periods. 

According to Schultz, Tielemans’ second through eighth causes of actions were 

predicated entirely on claims brought pursuant to those laws. Further, Schultz argued 

that all causes of action, including the ones not subject to mandatory arbitration—the Fair 

Credit Reporting Act and the PAGA cause of action—should be stayed pursuant to Code 

of Civil Procedure section 1281.4. 

Tielemans opposed the motion, arguing that the arbitration provisions should be 

invalidated because they are procedurally and substantively unconscionable. 

Specifically, he argued that the provisions constituted adhesion contracts because they

were a nonnegotiable condition of employment, and that they were substantively 

unconscionable because they purported to waive representative claims under PAGA and 

the right to seek public injunctive relief, and contained impermissible fee-shifting 

language. Further, Tielemans argued that the arbitration provisions did not clearly and 

4 Labor Code section 2699.5 lists numerous other Labor Code sections subject to 

specific administrative procedures for PAGA actions to recover civil penalties for alleged 

violations. (Lab. Code, § 2699.5.)
6

unmistakably waive the right to litigate statutory wage and hour claims in a judicial 

forum. 

A hearing on the petition to compel was held on January 17, 2020. Following the 

hearing, the trial court issued its order granting the petition. The court first determined 

that the parties are bound by the CBAs and the arbitration provisions. It then held that 

the arbitration provisions contain a clear and unmistakable waiver of the right to bring the 

specified statutory claims in court. The court also determined the arbitration provisions

are not procedurally unconscionable because there was no evidence the CBAs were the 

product of anything other than arms-length negotiations between SCDCL-LiUNA and 

ACE. 

The trial court agreed with Tielemans that the arbitration provisions were 

unconscionable in two respects—the fee-shifting provisions and the waiver of 

representative claims under PAGA. However, the court exercised its discretion to sever 

the offending provisions and enforce the remainder of the agreements. The court 

explained that the fee-shifting provisions were collateral to the main purpose of the 

contracts, “which is to provide a mechanism to resolve disputes,” and noted that the 

CBAs include a savings clause providing that provisions determined to be illegal shall be 

severed and the remainder of the agreements shall remain in effect. The court therefore

granted the petition and stayed the action in its entirety pending completion of arbitration

of Tielemans’ second through eighth causes of action.

5

 

The matter proceeded to arbitration, after which the arbitrator found in favor of 

Schultz on all claims on June 22, 2021. Tielemans filed a petition to confirm the award 

on August 27, 2021. The trial court granted the petition and entered judgment on 

January 20, 2022. 

5 The parties subsequently stipulated to dismiss the first cause of action regarding 

alleged violations of the Fair Credit Reporting Act. 
7

Tielemans timely appealed.6

II. DISCUSSION

Tielemans argues on appeal that (1) there was no clear and unmistakable waiver of 

a judicial forum; (2) the arbitration provisions are procedurally unconscionable because 

they are adhesion contracts; and (3) the arbitration provisions are permeated with 

unconscionability because they contain at least three offending terms, so the trial court 

abused its discretion by severing them. 

As we explain below, we determine Tielemans’ arguments lack merit.

A. Applicable law and standard of review

Both California and federal law have statutory schemes for the enforcement of

arbitration agreements. (Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 

761.) “The California Arbitration Act . . . sets forth ‘a comprehensive statutory scheme 

regulating private arbitration in this state.’ [Citation.] The Federal Arbitration Act 

(FAA; 9 U.S.C. §§ 1-14) governs contractual arbitration in written contracts involving 

interstate or foreign commerce. (9 U.S.C. §§ 1, 2.)” (Ibid., quoting Moncharsh v. Heily

& Blasé (1992) 3 Cal.4th 1, 9 (Moncharsh).)7

6

“An order granting a petition to compel arbitration is not appealable, but is 

reviewable on appeal from a subsequent judgment on the award.” (Ashburn v. AIG 

Financial Advisors, Inc. (2015) 234 Cal.App.4th 79, 94; Code Civ. Proc., § 1294.2.)

7 Although the FAA and accompanying federal law do not apply in California 

courts in every instance, the parties appear to concede that they apply here. (See, e.g., 

Brinkley v. Monterey Financial Services, Inc. (2015) 242 Cal.App.4th 314, 326 [FAA 

applies to a contract that “ ‘evidences a transaction involving interstate commerce’ ”], 

quoting Shepard v. Edward Mackay Enterprises, Inc. (2007) 148 Cal.App.4th 1092, 

1101; Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 968 

[FAA preempts all state laws and rules that conflict with FAA’s provisions or objective 

of enforcing arbitration agreements], citing 9 U.S.C. § 2; AT&T Mobility LLC v.

Concepcion (2011) 563 U.S. 333, 341.) The arbitration provisions in the CBA also 

expressly reference federal law: “The Parties to this Agreement recognize that the 

Supreme Court of the United States has consistently held for over fifty years that federal 

(continued)
8

“California law strongly favors arbitration. Through the comprehensive 

provisions of the California Arbitration Act (Code Civ. Proc., § 1280 et seq.), ‘the 

Legislature has expressed a “strong public policy in favor of arbitration as a speedy and 

relatively inexpensive means of dispute resolution.” ’ ” (OTO, L.L.C. v. Kho (2019) 8 

Cal.5th 111, 125 (OTO), quoting Moncharsh, supra, 3 Cal.4th at p. 9.) “On petition of a 

party to an arbitration agreement alleging the existence of a written agreement to arbitrate 

a controversy and that a party to the agreement refuses to arbitrate that controversy, the 

court shall order the petitioner and the respondent to arbitrate the controversy if it 

determines that an agreement to arbitrate the controversy exists.” (Code Civ. Proc., 

§ 1281.2; Wilson-Davis v. SSP America, Inc. (2021) 62 Cal.App.5th 1080, 1092.)

“California law establishes ‘a presumption in favor of arbitrability.’ ” (OTO,

supra, 8 Cal.5th at p. 125, quoting Engalla v. Permanente Medical Group, Inc. (1997) 15 

Cal.4th 951, 971.) “An agreement to submit disputes to arbitration ‘is valid, enforceable 

and irrevocable, save upon such grounds as exist for the revocation of any contract.’ ” 

(OTO, supra, at p. 125, quoting Code Civ. Proc., § 1281.) In general, the validity and 

enforceability of an arbitration agreement is governed by state law applicable to 

contracts, “to the extent it does not conflict with the [Federal Arbitration Act].” (Dotson 

v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 980 (Dotson), citing Code Civ. Proc., § 1280 

et seq. [California Arbitration Act].) 

However, “the presumption of arbitration in a CBA does not apply to statutory 

violations.” (Cortez v. Doty Bros. Equipment Co. (2017) 15 Cal.App.5th 1, 12 (Cortez), 

citing Wright v. Universal Maritime Service Corp. (1998) 525 U.S. 70, 78-79 (Wright); 

Wright, at pp. 78-79 [cases involving statutory claims “ultimately concern[] not the 

application or interpretation of any CBA, but the meaning of a . . . statute”]; Wright, at 

law and policy favors the use and finality of arbitration procedures established through 

collective bargaining agreements to resolve all nature of disputes affecting the 

employee-employer relationship.” 
9

p. 79 [and rights “distinct from any right conferred by” the CBA].) “Thus, although a 

union representative in negotiating a CBA in good faith may waive the employee’s right 

to pursue in a judicial forum an action for a statutorily protected right . . . the United 

States Supreme Court has made clear that waiver of the right to prosecute a statutory 

violation in a judicial forum is only effective if it is explicit, ‘ “clear and 

unmistakable.” ’ ” (Cortez, supra, at p. 12.) 

“ ‘ “[G]enerally applicable contract defenses, such as . . . unconscionability, may 

be applied to invalidate arbitration agreements without contravening” the FAA’ or 

California law.” (OTO, supra, 8 Cal.5th at p. 125, quoting Pinnacle Museum Tower

Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 246 

(Pinnacle).) “Unconscionability can take different forms depending on the circumstances 

and terms at issue. However, the doctrine’s application to arbitration agreements must 

rely on the same principles that govern all contracts.” (OTO, supra, at p. 125, citing 

Sonic Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1133.) “The degree of 

unfairness required for unconscionability must be as rigorous and demanding for 

arbitration clauses as for any other contract clause.” (OTO, supra, at p. 125.)

“A contract is unconscionable if one of the parties lacked a meaningful choice in 

deciding whether to agree and the contract contains terms that are unreasonably favorable 

to the other party. [Citation.] Under this standard, the unconscionability doctrine ‘ “has 

both a procedural and a substantive element.” ’ [Citation.] ‘The procedural element 

addresses the circumstances of contract negotiation and formation, focusing on 

oppression or surprise due to unequal bargaining power. [Citations.] Substantive 

unconscionability pertains to the fairness of an agreement’s actual terms and to 

assessments of whether they are overly harsh or one-sided.’ ” (OTO, supra, 8 Cal.5th at 

p. 125, quoting Pinnacle, supra, 55 Cal.4th at p. 246.)

“Both procedural and substantive unconscionability must be shown for the defense 

to be established, but ‘they need not be present in the same degree.’ ” (OTO, supra, 8 
10

Cal.5th at p. 125, quoting Armendariz v. Foundation Health Psychcare Services, Inc.

(2000) 24 Cal.4th 83, 114 (Armendariz).) “Instead, they are evaluated on ‘ “a sliding 

scale.” ’ [Citation.] ‘[T]he more substantively oppressive the contract term, the less 

evidence of procedural unconscionability is required to’ conclude that the term is 

unenforceable. [Citation.] Conversely, the more deceptive or coercive the bargaining 

tactics employed, the less substantive unfairness is required.” (OTO, supra, at p. 125, 

quoting A&M Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 473, 487.) “The 

burden of proving unconscionability rests upon the party asserting it.” (OTO, supra, at 

p. 126, citing Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 911.) 

Where a trial court determines that an agreement contains one or more 

unconscionable provisions, the court has the discretion to determine whether to sever or 

restrict those provisions, or to refuse to enforce the entire agreement if the court 

concludes the agreement is “ ‘permeated’ ” by unconscionability. (Armendariz, supra, 24 

Cal.4th at p. 122.)

Where the evidence is not in conflict, a Court of Appeal reviews the trial court’s 

ruling on a petition to compel arbitration de novo. (OTO, supra, 8 Cal.5th at p. 125.) We 

review the decision to sever unconscionable provisions for abuse of discretion. 

(Armendariz, supra, 24 Cal.4th at p. 122.)

B. Analysis

1. Union’s waiver of employee’s right to judicial forum

Tielemans first argues that a union cannot prospectively waive an employee’s 

right to a judicial forum when statutory claims are at issue.8 However, California courts 

8 Tielemans appears to abandon this claim in his reply brief, when he states that 

“the issue to be decided by this Court is not whether the union may waive Appellant’s 

right to prosecute a statutory violation in a judicial forum, but whether such a waiver was 

‘clear and unmistakable.’ ” Despite this apparent concession, we address the argument 

because our function to correctly interpret the law is not controlled by a party’s 

(continued)
11

have recently rejected that argument, holding instead that “a union representative in 

negotiating a CBA in good faith may waive the employee’s right to pursue in a judicial 

forum an action for a statutorily protected right.” (Cortez, supra, 15 Cal.App.5th at p. 11; 

see also Volpei v. County of Ventura (2013) 221 Cal.App.4th 391; Choate v. Celite Corp.

(2013) 215 Cal.App.4th 1460, 1465 [CBA validly waives union member’s right to litigate 

federal or state claims in a judicial forum only if the waiver is clear and unmistakable]; 

cf. Vasserman v. Henry Mayo Newhall Memorial Hospital (2017) 8 Cal.App.5th 236

(Vasserman) [declining to decide the issue because the court determined the CBAs had 

not clearly and unmistakably waived the right to a judicial forum].) 

Those cases followed the United States Supreme Court’s decision in 14 Penn 

Plaza LLC v. Pyett (2009) 556 U.S. 247 (Penn Plaza), which held that a collective 

bargaining agreement can require union members to arbitrate statutory claims, provided 

that it does so clearly and unmistakably. (Id. at p. 274.) The Supreme Court explained 

that requiring arbitration does not constitute a waiver or forfeiture of the substantive 

statutory right, but rather only the right to seek relief from a court, as opposed to an 

arbitrator, in the first instance. (Id. at p. 265; see also Armendariz, supra, 24 Cal.4th at 

pp. 98-99 [“ ‘[b]y agreeing to arbitrate a statutory claim, a party does not forgo the 

substantive rights afforded by statute; it only submits to their resolution in an arbitral, 

rather than a judicial, forum’ ”].)

Tielemans cites a number of California cases to support his position, but they 

mostly pre-date the United States Supreme Court’s decision in Penn Plaza and the 

subsequent California decisions that followed it. (See, e.g., Zavala v. Scott Brothers

Dairy, Inc. (2006) 143 Cal.App.4th 585; Torrez v. Consolidated Freightways Corp.

(1997) 58 Cal.App.4th 1247 (Torrez); Deschene v. Pinole Point Steel Co. (1999) 76 

concession. (R.J. Land & Associates Construction Co. v. Kiewit-Shea (1999) 69 

Cal.App.4th 416, 427.) 
12

Cal.App.4th 33; see also Cortez, supra, 15 Cal.App.5th at p. 12, fn. 1 [recognizing that 

cases such as Zavala pre-dated Penn Plaza].) 

In Torrez, this court interpreted United States Supreme Court precedent at the time 

to hold that “a union may not prospectively waive an employee’s right to a judicial forum 

to hear his or her statutory discrimination claims.” (Torrez, supra, 58 Cal.App.4th at 

p. 1259; Barrentine v. Arkansas-Best Freight System, Inc. (1981) 450 U.S. 728 

(Barrentine); Alexander v. Gardner-Denver Co. (1974) 415 U.S. 36; Gilmer v.

Interstate/Johnson Lane Corp. (1991) 500 U.S. 20.) Twelve years later in Penn Plaza, 

the United States Supreme Court addressed the specific federal cases we relied on in 

Torrez and reversed the Court of Appeals for the Second Circuit, which had “attempted 

to reconcile Gardner-Denver and Gilmer by holding that arbitration provisions in a 

collective-bargaining agreement, ‘which purport to waive employees’ rights to a federal 

forum with respect to statutory claims, are unenforceable.’ ” (Penn Plaza, supra, 556 

U.S. at p. 255.) The Supreme Court explained that “Gardner-Denver and its progeny 

thus do not control the outcome where, as is the case here, the collective-bargaining 

agreement’s arbitration provision expressly covers both statutory and contractual 

discrimination claims.” (Id. at p. 264.)9 

In light of Penn Plaza and subsequent California authority relying on it, we do not 

find the authority cited by Tielemans controlling here.

9 Subsequent cases have also applied the same maxim to both Labor Code claims

and discrimination claims. (See, e.g., Cortez, supra, 15 Cal.App.5th at p. 12, fn. 1

[rejecting argument that the holding in Penn Plaza should be limited to discrimination

claims—“in holding that statutory violations could be subject to arbitration if clearly and 

unmistakably bargained for in the CBA, the Penn Plaza court distinguished the 

arbitration provision in Barrentine on the ground it ‘did not expressly reference the 

statutory claim at issue’ and was thus not sufficiently clear and explicit to support a 

waiver. [Citation.] Of course, the necessary implication of that holding is that a clear 

and explicit agreement to arbitrate wage and hour claims would be enforceable”].)
13

Tielemans also cites Hoover v. American Income Life Ins. Co. (2012) 206 

Cal.App.4th 1193, which was decided after Penn Plaza and held that “state statutory 

wage and hour claims are not subject to arbitration, whether the arbitration clause is 

contained in the CBA or an individual agreement.” (Id. at p. 1206.) However, Hoover

relied on Zavala and United States Supreme Court precedent that pre-dated Penn Plaza, 

and did not acknowledge or address Penn Plaza. (Ibid., citing Barrentine, supra, 450 

U.S. 728 [union representative could not waive on employee’s behalf employee’s right to 

pursue in court wage and hour claims under the Fair Labor Standards Act].) To the 

extent Hoover is inconsistent with Cortez and Penn Plaza, we decline to follow it. (See, 

e.g., Cortez, supra, 15 Cal.App.5th at p. 12, fn. 1 [recognizing that Barrentine and Zavala

pre-dated Penn Plaza]; see also Lane v. Francis Capital Management LLC (2014) 224 

Cal.App.4th 676, 686 [questioning Hoover and affirming that “even statutory claims 

based on nonnegotiable or unwaivable rights may be subject to arbitration agreements, 

provided that arbitration allows the plaintiff to fully vindicate his or her statutory cause of 

action in the arbitral forum”].)

In sum, an employee may be required to arbitrate statutory claims where the union 

has entered into a collective bargaining agreement with a mandatory arbitration 

provision. 

2. Clear and unmistakable waiver

Tielemans argues that, even if a union can prospectively waive its employees’

right to bring statutory claims in court, the arbitration provisions in the CBAs here did not 

include the requisite clear and unmistakable waiver of that right. 

A “waiver of the right to prosecute a statutory violation in a judicial forum is only 

effective if it is explicit, ‘ “clear and unmistakable.” ’ ” (Cortez, supra, 15 Cal.App.5th at 

p. 12, quoting Penn Plaza, supra, 556 U.S. at p. 254; Wright, supra, 525 U.S. at p. 80.) 

“[I]n determining whether there has been a sufficiently explicit waiver, courts look to the 

generality of the arbitration clause, explicit incorporation of statutory requirements, and 
14

the inclusion of specific contractual provisions.” (Vasserman, supra, 8 Cal.App.5th at 

p. 246, citing Vasquez v. Superior Court (2000) 80 Cal.App.4th 430, 434.) A “ ‘waiver 

in a collective bargaining agreement is sufficiently clear if it is found in an explicit 

arbitration clause. “Under this approach, the [collective bargaining agreement] must 

contain a clear and unmistakable provision under which the employees agree to submit to 

arbitration all [state and federal statutory] causes of action arising out of their 

employment.” ’ ” (Vasserman, supra, at pp. 246-247, quoting Vasquez, supra, at p. 435.)

Applying those standards here, the question is whether the arbitration provisions

include an explicitly stated, clear and unmistakable intent to waive the right to a judicial 

forum for the specific statutory causes of action Tielemans has alleged. (Vasserman,

supra, 8 Cal.App.5th at p. 246.) We hold that they do.10

As summarized above, the second through eighth causes of action allege violations 

of: Labor Code sections 204, 223, 226.7, 512, 1198 (failure to provide meal periods), 

Labor Code sections 204, 223, 226.7, 1198 (failure to provide rest periods), Labor Code 

sections 223, 510, 1194, 1194.2, 1197, 1197.1, 1198 (failure to pay hourly and overtime 

wages), Labor Code section 2802 (failure to indemnify), Labor Code Section 226 (failure 

to provide accurate, written wage statements), Labor Code sections 201 through 203 

(failure to timely pay all final wages), and Business and Professions Code section 17200 

et seq. (unfair competition). 

The arbitration provisions referenced “the Labor Code Sections identified in Labor 

Code section 2699.5,” which section itself expressly identifies dozens of Labor Code 

sections which are also subject to the administrative procedures of Labor Code section 

2699.3, subdivision (a). (Lab. Code, § 2699.5.) Those sections include each of the 

10 As a threshold matter, Tielemans does not contend that the arbitration provisions 

do not include an explicitly stated, clear and unmistakable intent to waive the right to a 

judicial forum at all—rather, he argues only that the provisions do not clearly identify the 

specific statutory claims at issue.
15

specific Labor Code sections identified in the allegations in Tielemans’ complaint. The 

arbitration provisions also expressly reference Wage Order 16, as well as “federal, state 

and local law concerning wage-hour requirements, wage payment and meal or rest 

periods.” 

Tielemans’ own allegations in the complaint assert that the claims in the second 

through seventh causes of action all arise from the referenced Labor Code sections or 

Wage Order 16. For instance, the second cause of action alleges that Tielemans has been 

“entitled to the full meal period protections of both the Labor Code and the applicable 

Industrial Welfare Commission Wage Order.” The third through seventh causes of action 

include similar allegations with express references to the specific Labor Code sections 

included in section 2699.5, Wage Order 16, or both. And the eighth cause action for 

unfair competition expressly alleges that it is based on the same alleged violations of the 

Labor Code and Wage Order. 

Tielemans argues that the arbitration provisions do not “expressly identify the 

statutes covered by the grievance procedure, but rather only describe it in vague and 

ambiguous terms.” We disagree. The provisions specifically identify “the Labor Code 

Sections identified in Labor Code section 2699.5” and Wage Order 16. Under the 

standards discussed above, that constitutes a clear and unmistakable waiver. (Cortez,

supra, 15 Cal.App.5th at pp. 12-14.)

Tielemans also argues that the reference to Labor Code section 2699.5 is 

insufficient because the statutes referred to therein are “inextricably tied to PAGA 

penalties” and “all relate to the PAGA claims.” Tielemans appears to be arguing that,

because section 2699.5 is part of PAGA—and employees may not waive their right to 

bring representative PAGA claims in a judicial forum—the arbitration provisions’ 

reference to section 2699.5 does not constitute a valid waiver. However, PAGA is a 

procedural statute—that is, it simply allows an aggrieved employee to recover civil 

penalties “ ‘that otherwise would be sought by state labor law enforcement agencies.’ ” 
16

(Wesson v. Staples the Office Superstore, LLC (2021) 68 Cal.App.5th 746, 760, quoting 

Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 

993, 1003.) But the Labor Code sections referenced in section 2699.5 also exist 

independent of PAGA, and Tielemans’ second through eighth causes of action allege 

violations of those sections independent of PAGA as well. Accordingly, the fact that 

Labor Code section 2699.5 and related PAGA statutes also create a separate mechanism 

for aggrieved employees to recover civil penalties for violations of the underlying Labor 

Code sections does not preclude a party from stating claims for violations outside of 

PAGA, as Tielemans has done. Nor does it render the waivers in the arbitration 

provisions at issue here less than clear and unmistakable.11

Lastly, Tielemans argues that the trial court improperly analogized to Penn Plaza

in holding that the arbitration provisions satisfied the “clear and unmistakable” standard,

because that issue was not present in Penn Plaza. However, we do not review the trial 

court’s reasoning, rather only its ruling. (Ramos v. Westlake Services LLC (2015) 242 

Cal.App.4th 674, 686.) In any event, the trial court did not rely on Penn Plaza as 

authority for its determination that the arbitration provisions here included a clear and 

unmistakable waiver. Instead, it relied on Penn Plaza for the general proposition that a 

union may waive its employees’ right to bring statutory claims in court, and it analogized 

to Cortez in support of its conclusion that the arbitration provisions here included a clear 

and unmistakable waiver. 

3. Procedural unconscionability

Tielemans argues that the arbitration provisions are procedurally unconscionable 

because the CBAs were adhesion contracts. Specifically, he contends that he “had no 

11 For the same reasons, we reject Tielemans’ argument that “[b]y severing the 

PAGA waiver, the trial court must necessarily strike the reference to Labor Code sections 

2698 et seq. and 2699.5.” The arbitration provisions did not refer to claims brought 

pursuant to Labor Code section 2699.5, but rather to claims brought pursuant to the other

Labor Code sections identified therein. 
17

choice but to accept the terms of the CBA as is, and that he was not in equal bargaining

power” with Schultz. 

Procedural unconscionability “ ‘addresses the circumstances of contract 

negotiation and formation, focusing on oppression or surprise due to unequal bargaining 

power.’ ” (OTO, supra, 8 Cal.5th at p. 125.) “A procedural unconscionability analysis 

‘begins with an inquiry into whether the contract is one of adhesion.’ ” (Id. at p. 126, 

quoting Armendariz, supra, 24 Cal.4th at p. 113.) “An adhesive contract is standardized, 

generally on a preprinted form, and offered by the party with superior bargaining power 

‘on a take-it-or-leave-it basis.’ ” (OTO, supra, at p. 126, quoting Baltazar v. Forever 21,

Inc. (2016) 62 Cal.4th 1237, 1245 (Baltazar).) “Arbitration contracts imposed as a 

condition of employment are typically adhesive.” (OTO, supra, at p. 126, citing 

Armendariz, supra, at pp. 114-115; Serpa v. California Surety Investigations, Inc. (2013) 

215 Cal.App.4th 695, 704.)

“ ‘[T]here are degrees of procedural unconscionability. At one end of the 

spectrum are contracts that have been freely negotiated by roughly equal parties, in which 

there is no procedural unconscionability. . . . Contracts of adhesion that involve surprise 

or other sharp practices lie on the other end of the spectrum. [Citation.] Ordinary 

contracts of adhesion, although they are indispensable facts of modern life that are 

generally enforced [citation] contain a degree of procedural unconscionability even 

without any notable surprises, and “bear within them the clear danger of oppression and 

overreaching.” ’ ” (Baltazar, supra, 62 Cal.4th at p. 1244, quoting Gentry v. Superior

Court (2007) 42 Cal.4th 443, 469.)

The “pertinent question . . . is whether circumstances of the contract’s formation 

created such oppression or surprise that closer scrutiny of its overall fairness is required.” 

(OTO, supra, 8 Cal.5th at p. 126; Baltazar, supra, 62 Cal.4th at pp. 1245-1246.) 

“ ‘ “Oppression occurs where a contract involves lack of negotiation and meaningful 
18

choice, surprise where the allegedly unconscionable provision is hidden within a prolix 

printed form.” ’ ” (Pinnacle, supra, 55 Cal.4th at p. 247, italics added.)

Tielemans has failed to show that the CBAs are adhesion contracts or that their 

formation created any element of oppression or surprise. First, not every employment 

contract is an adhesion contract, and collective bargaining agreements are not ordinary 

contracts themselves. (See, e.g., Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 416, 

fn. 9 [CBAs are “ ‘unique in character’ ”; “concept of adhesion seems inconsistent with 

the substantive legal requirement . . . that parties to a collective bargaining agreement 

must negotiate with one another in good faith”].) 

Second, Tielemans has not identified any evidence demonstrating oppression or 

surprise here. On the contrary, the only evidence he cites is Schultz’s argument in its 

petition to compel arbitration that the CBAs were entered into by SCDCL-LiUNA on 

behalf of itself and its affiliated local unions, and not with Tielemans himself. According 

to Tielemans, because he was not a party to the CBAs, that demonstrates that he “had no 

choice but to accept the terms.” But Tielemans again ignores the fact that the CBAs were 

the product of arms-length negotiations between the union and ACE. He also fails to 

identify any evidence regarding the circumstances of the CBAs’ formation, or anything 

else implicating its overall fairness. (OTO, supra, 8 Cal.5th at p. 126; Baltazar, supra, 62 

Cal.4th at pp. 1245-1246.) We agree with the trial court’s conclusion that Tielemans 

“does not assert any portion of the CBAs was hidden or that he was prevented from 

reading the CBAs before becoming bound to the agreements.” 

Tielemans has failed to carry his burden of demonstrating procedural 

unconscionability. 

4. Severability of unconscionable provisions

Tielemans argues that, because the arbitration provisions contain three “offending 

terms,” they are “permeated with unconscionability” and should not be enforced. 

Tielemans identifies the two provisions that the trial court agreed were unconscionable—
19

the fee-shifting provision and the PAGA waiver—as well as what he claims constituted

an unconscionable waiver of the right to seek public injunctive relief. 

We first address the alleged public injunctive relief waiver. The trial court 

rejected Tielemans’ argument by ruling that the complaint did not seek public injunctive 

relief at all. Instead, the trial court held, “[t]here is no allegation that Defendants’ 

conduct had any impact on anyone other than Plaintiff and the putative class members. 

Any injunction would affect only employees of Defendants, who are individuals similarly 

situated to Plaintiff, and not any members of the general public.” We review Tielemans’ 

argument on this issue de novo. (OTO, supra, 8 Cal.5th at p. 125.) 

As noted above, the arbitration provisions provide that: “The Arbitrator shall not 

have any authority to award relief that would require amendment of the [CBA] or other 

agreement(s) between the Union and a Contractor or the Contractors, or which conflicts 

with any provision of any collective bargaining agreement or such other agreement(s).

Any arbitration outcome shall have no precedential value with respect to the 

interpretation of the [CBA] or other agreement(s) between the Union and a Contractor or 

the Contractors.” Tielemans contends this could be interpreted to preclude claims for 

public injunctive relief. 

However, it is by no means clear that this provision constitutes a waiver of public 

injunctive relief and Tielemans has not explained in any way how it does. Instead, he 

states only that this language “may be interpreted to cover claims for public injunctive 

relief.” Accordingly, we consider the point forfeited. (Bains v. Moores (2009) 172 

Cal.App.4th 445, 455 [appellate review is limited to issues which have been adequately 

raised and briefed].) In addition, as the trial court held, it is not clear that the complaint 

seeks public injunctive relief at all, as opposed to injunctive relief that would benefit only

Tielemans and the putative class members. Although Tielemans claims that he is seeking 

such public injunctive relief, he has not pointed to any part of the complaint to support 

that assertion.
20

We next address Tielemans’ argument that the agreements are “permeated with 

unconscionability” so the offending provisions should not have been severed. First, we 

note that we do not assess whether the fee-shifting provision or the PAGA waiver are in 

fact substantively unconscionable. Although Schultz presents such arguments in its 

appellate brief, it did not file a cross-appeal and therefore may not claim error in 

connection with Tielemans’ appeal. (Celia S. v. Hugo H. (2016) 3 Cal.App.5th 655, 665; 

see also Code Civ. Proc., § 902 [any party aggrieved may appeal]; Gober v. Ralphs 

Grocery Co. (2006) 137 Cal.App.4th 204, 211 [“A party is not aggrieved by a judgment 

or order rendered in its favor.”].) Accordingly, for purposes of our analysis here, we 

assume these two provisions are unconscionable. 

Our task, then, is only to determine whether the trial court abused its discretion in 

electing to sever the provisions it found unconscionable. (Armendariz, supra, 24 Cal.4th 

at p. 122 [applying abuse of discretion standard]; Civ. Code, § 1670.5, subd. (a) [“If the 

court as a matter of law finds the contract or any clause of the contract to have been 

unconscionable at the time it was made the court may refuse to enforce the contract, or it 

may enforce the remainder of the contract without the unconscionable clause, or it may 

so limit the application of any unconscionable clause as to avoid any unconscionable 

result.”].)

A trial court has the discretion to refuse to enforce an entire agreement if the 

agreement is “ ‘permeated’ ” by unconscionability. (Lhotka v. Geographic Expeditions,

Inc. (2010) 181 Cal.App.4th 816, 826, citing Armendariz, supra, 24 Cal.4th at p. 122.) 

“An arbitration agreement can be considered permeated by unconscionability if it 

‘contains more than one unlawful provision . . . . Such multiple defects indicate a 

systematic effort to impose arbitration . . . not simply as an alternative to litigation, but as 

an inferior forum that works to the [stronger party’s] advantage.’ ” (Lhotka, supra, at 

p. 826, quoting Armendariz, supra, at p. 124.) “ ‘The overarching inquiry is whether 

“ ‘the interests of justice . . . would be furthered’ ” by severance.’ ” (Lhotka, supra, at 
21

p. 826, quoting Armendariz, supra, at p. 124.) The “strong preference is to sever unless

the agreement is ‘permeated’ by unconscionability.” (Ajamian v. CantorCO2e, L.P.

(2012) 203 Cal.App.4th 771, 802, quoting Dotson, supra, 181 Cal.App.4th at 

pp. 985-986; Harper v. Ultimo (2003) 113 Cal.App.4th 1402, 1411 [“refusing to enforce 

the entire agreement is an option ‘only when an agreement is “permeated” by 

unconscionability’ ”].)

Tielemans argues that “this Court should adopt the standard set forth in Amendariz

and find that the agreement is unconscionable . . . because these unconscionable 

provisions should not have been included in the agreement in the first place.” The trial 

court determined that the fee-shifting language was “collateral to the main purpose of the 

contract,” relying on Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 92, for the 

proposition that the “main purpose of the arbitration agreement was not to regulate costs, 

but to provide a mechanism to resolve disputes such that the costs provision is collateral 

to that purpose.” In addition, the trial court noted that the CBAs at issue here contain 

general savings clauses which provide that, “in the event any provision of the CBAs is 

determined to be illegal or void, as being in contravention of any law, the remainder of 

the CBAs shall remain in full force and effect.” For those reasons, the trial court elected 

to exercise its discretion to sever the offending provisions and leave the remainder intact. 

Tielemans does not explain how that constituted an abuse of discretion, other than 

to cite case law he claims compelled a contrary conclusion by the trial court. But he does 

not analogize the facts of those cases and we do not find them persuasive on this point.

12

In light of the standards set forth above, we determine it was within the court’s 

discretion to conclude the agreements were not permeated by unconscionability and that 

12 See Nagrampa v. Mailcoups, Inc. (9th Cir. 2006) 469 F.3d 1257, 1293; Roe v.

SFBSC Management, LLC (N.D. Cal. 2022) 2022 U.S. Dist. Lexis 215222, *12; Gentry 

v. Empire Medical Training (N.D. Cal. 2013) 2013 2013 U.S. Dist. Lexis 124091, *6; 

Samaniego v. Empire Today, LLC (2012) 205 Cal.App.4th 1138, 1148; Carlson v. Home 

Team Pest Defense, Inc. (2015) 239 Cal.App.4th 619, 627-639.
22

the interests of justice would be furthered by severing the offending provisions. 

(Armendariz, supra, 24 Cal.4th at p. 124 [“If the illegality is collateral to the main 

purpose of the contract, and the illegal provision can be extirpated from the contract by 

means of severance or restriction, then such severance and restriction are appropriate.”].)

5. PAGA claims

The parties devote significant portions of their briefs to arguments regarding 

PAGA issues, including whether a party may waive its right to bring PAGA claims in 

court and whether individual and non-individual (representative) PAGA claims may be 

segregated between arbitration and a judicial forum, citing recent United States Supreme 

Court precedent in Viking River Cruises, Inc. v. Moriana (2022) __ U.S. __ [2022 U.S. 

LEXIS 2940] [142 S.Ct. 1906]. However, those issues are not before us in this appeal 

because Schultz did not seek to compel arbitration of Tielemans’ PAGA cause of action 

in the first place and, as noted above, did not appeal the judgment. 

III. DISPOSITION

The judgment is affirmed. Schultz is awarded its costs on appeal. 
___________________________________

Wilson, J.

WE CONCUR:

__________________________________________

 Bamattre-Manoukian, Acting P.J.

______________________________________

Danner, J.

Tielemans v. Aegion Energy Services, Inc., et al.

H049635