Filed 1/29/21 Sant ana v. Postmates CA2 /2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION TWO

WENDY SANTANA

,
Plaintiff and Respondent,

v.

POSTMATES, INC.

,
Defendant and Appellant. B296413

(Los Angeles County Super. Ct. No. BC720151 )

APPEAL from an order of the Superior Court of Los Angeles County. Rafael A. Ongkeko

, Judge. Affirmed

. Gibson, Dunn & Crutcher

, Theane Evangelis, Michele L. Maryott, Bradley J. Hamburger and Dhananjay S. Manthripragada for Defendant and Appellant

. Parris Law Firm, R. Rex Parris, Kitty K. Szeto, John M.
Bickford

, Michelle J. Lopez and Alexander R. Wheeler for
Plaintiff and Respondent

.

_________________________________2 Postmates, Inc. (Postmates) appeals from an order denying
its petition for arbitration in a representative action brought by

r espondent Wendy Santana under the Labor Code Private Attorneys General Act of 2004 (PAGA), Labor Code section 2698
et seq. 1 In denying the petition, t he trial court followed our Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 ( Iskanian ), which , among other things, held that: (1) an emp loyee’s right to bring a representative action under the PAGA is u n waivable under California law, and (2) this state law rule is not preempted by the Federal Arbitration Act (FAA), title 9 United States Code
section 1 et seq. Postmates argues that our Supreme Court’s holding in
Iskanian was subsequently abrogated by the United States Supreme Court ’s decision in Epic Sys

. Corp. v. Lewis (2018) __ U.S. __ [ 138 S.Ct. 1612 ] ( Epic Systems ). Along with every published Court of Appea l decision that has decided this issue, we reject the argument

. Epic Systems did not consider the same
issue concerning the nonwaivable nature of PA G A claims that
Iskanian decided. We must therefore follow our Supreme Court’s holding.

1 Subsequent u ndesignated statutory references are to the Labor Code

.3 BACKGROUND

1. The A rbitration Agreement Santana began working as a courier for Postmates in September 2017. 2 As a courier, she delivered products from local merchants to customers who placed orders through Postmates’ s

on

- line platform. As a condition of working for Postmates, Santana e xecuted a “Fleet Agreement” governing her employment (Employment Agreement). The Employment Agreement included an arbitration provision in which Santana and Postmates “mutually agree[d] to resolve any disputes between them exclusively through final and binding arbitration instead of filing a lawsuit
in court.” 3 The arbitration p rovision stated that it was “governed exclusively by the [FAA] and shall apply to any and all claims between the Parties, including but not limited to

. . . the Contractor’s classification as an independent Contractor.” The arbitration provision included a class action waiver and a representative action waiver. The representative action waiver stated that the parties agreed that “by entering into this Agreement, they waive their right to have any dispute or claim brought, heard or arbitrated as a represent ative action, or to participate in any representative action, and an arbitrator shall not have any authority to arbitrate a representative action.”

2 Santana’s complaint uses the term “driver.” Postmates refers to its drivers as “couriers.” Both parties use the term “courier” in their briefs

, and we therefore do so as well.

3 Santana originally signed a version of the Employment Agreement that was ef fective March 1, 2017. She later agreed to a version effective May 11, 2018. The relevant provisions are the same in both versions.4 The Employment Agreement included a provision permitting Santana to opt out of the arbitration provision. S he
did not do so.
2. Santana’s Complaint Santana filed her original complaint in this action on September 4, 2018. The complaint alleged a single cause of action “on behalf of aggrieved employees” pursuant to the PAGA.
Santana claimed that Postmates willf ully misclassified its
couriers as independent contractors rather than employees to minimize costs. She alleged that Postmates’ s couriers are “under
the control and direction of POSTMATES in connection with the performance of their work, perform work that is part of the usual

c our s e of POSTMATES’ business, and are not customarily engaged in an independently established trade, occupation or business in the same nature of the work performed for
POSTMATES.”
Santana alleged that Postmates’ s misclassification o f its
couriers as independent contractors deprived her and other
couriers of various statutory and regulatory rights given to employees, including minimum wages, mandated meal breaks, rest breaks, premium payment for missed breaks, itemized wage

statements , timely payment of wages, and workers compensation protection. Santana sought penalties, attorney fees and costs “individually, and on behalf of all aggrieved employees,” which,
under the PAGA, would be distributed 75 percent to the Labor
and Workforce D evelopment Agency (Agency) and 25 percent to the aggrieved employees. (See § 2699, subd. (i).) Santana subsequently filed a f irst a mended c omplaint (FAC) to clarify that she sought only civil penalties under the PAGA and not any individual relief. Like her original complaint,5

Santana’s FAC sought civil penalties under section 2699 along with attorney fees and costs, and also clarified that Santana “is not seeking any sort of individualized (i.e., victim

- specific ) relief
as described in Esparza v. KS Industries, L.P. ( [ 20 1 7 ] ) 13 Cal.App.5th 1228 [ ( Esparza ) ].” 4
3. Postmates’ s Motion to Compel Arbitration
Postmates filed a petition to compel arbitration on
October 12, 2018. The petition acknowledged the holding in
Iskanian that PAGA waivers are unenforceable under state law. (See Iskanian, supra, 59 Cal.4th at p. 384.) However, Postmates argued that the representative action waiver in the Employment Agreement should be enfo rced because Epic Systems undermined the basis for our Supreme Court’s holding in Iskanian. Postmates also argued that, even if the holding in Iskanian still applied, Santana’s individual claims must be arbitrated.

4 Esparza held that an employee who asserts claims for individual, “victim

- specific” relief along with a PAGA claim for ci vil penalties may be compelled to arbitrate the individual claims. ( Esparza, supra, 13 Cal.App.5th at p. 1234.) In the trial court, Postmates argued that Santana’s decision not to assert any claim for individual relief meant that she was not an “aggrieve d employee” and therefore lacked standing to sue under the PAGA. (See § 2699, subds. (a) & (c).) The trial court did not reach the issue, and Postmates has not raised it on appeal as an alternative ground for reversal. In any event, t he argument has now been foreclosed by our Supreme Court’s decision in Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 85 ( Kim ) [“The statutory language reflects that the Legislature did not intend to link PAGA standing to the maintenance of individual claim s when such claims have been alleged”].)6 In her opposition, Santana argued that E pic Systems did
not consider whether the FAA preempts the state law rule
established in Iskanian prohibiting enforcement of PAGA waivers. She argued that the trial court was therefore obligated to follow the holding in Iskanian. Santana also confirmed that
she did not seek individual remedies.
The trial court denied Postmates’ s petition. The court concluded that it was “bound by Iskanian ” because the United States Supreme Court did not decide the “same question differently” in Epic Systems. And the court concluded that there
were no claims for individual relief to be arbitrated because Santana soug ht only civil penalties in a representative claim
under the PAGA.
DISCUSSION

1

. Appealability The absence of any request for individual relief in
Santana’s FAC suggests that this appeal may be moot. Neither party has raised this issue, 5 but we may examin e it on our own initiative. ( See City of Hollister v. Monterey Ins. Co. (2008) 165 Cal.App.4th 455, 479 ( City of Hollister ) .) Postmates requests that this court reverse the trial court’s ruling and “order Santana to arbitrate any and all claims against
Po stmates on an individual basis.” But Santana’s FAC confirms
that Santana asserts no such individual claims. And Postmates is not entitled to, and apparently does not seek

, arbitration of
Santana’s representative PAGA claim. T he contractual provision

5 Nor has Santana raised as an alternative ground for affirmance that no arbitrable issue would exist even if Postmates were to prevail on appeal.7

on which Postmates relies is a representative action waiver , not an arbitration agreement

. The representative action waiver in
the Employment Agreement specifically states that “an arbitrator shall not have any authority to arbitrate a representative action.” Thus, if this provision is enforceable, the remedy would be dismissal, not arbitration. 6 However, Postmates’ s appeal concerns the enforceability of

one component of a broad arbitration provision that is designed to
ensure that any disputes arising from a courier’s work for Postmates be decided in arbitration rather than litigation. The statutory right to appeal from an order denying arbitration is intended to avoid the need for lengthy and expensive litigation where parties hav e agreed to arbitrate their disputes. (See Henry v. Alcove Investment, Inc. (1991) 233 Cal.App.3d 94, 99

– 100.) Dismissing this appeal as moot would require the parties to proceed through litigation to a final judgment before an appeal is
considered

. C on sidering the appeal now furthers the policy underlying the right to appeal from an order denying a claimed arbitration right. Moreover, even when an appeal is technically moot we may consider it if “ ‘there may be a recurrence of the same controversy
betwe en the parties and the parties have fully litigated the
issues.’ ” ( City of Hollister, supra, 165 Cal.App.4th at p. 480,

6 Even if Santana had agreed to arbitrate her representative PAGA claim, that agreement would likely not have been enforceable. (See Provost v. YourMechanic, Inc. (2020) 55 Cal.App.5th 982, 992 ( Provost ) [citing cases holding that “an aggrieved employee’s predispute agreement to arbitrate PAGA claims is unenforceable absent a showing the state also consented
to t he agreement”].)8

quoting Cucamongans United for Reasonable Expansion v. City of Rancho Cucamonga (2000) 82 Cal.App.4th 473, 480.) Here, although there are no issues to arbitrate no matter who prevails on appeal , if we were to dismiss th is appeal as moot Postmates
could raise the same issue of the enforceability of Santana’s representative action waiver in a motion challenging Santana’s
FAC or in a motion for summary judgment . Assuming that the trial court acted consistently in denying such a motion, the issue
could then be raised in a posttrial appeal. Delaying consideration of an issue that has already been fully briefed on appeal and will likely recur would “waste

. . . judicial resources.” (See City of Hollister , supra, 165 Cal.App.4th at p. 4 80 [ deciding appeal that, if dismi ssed as moot, would “only trigger another round of litigation, perhaps followed by yet another appeal”].) We therefore proceed to consider the merits of the appeal.
2. Epic Systems Did Not Decide the Same Issue as
Iskanian Concerning the Enforceability of Representative Action Waivers As in the trial court, Postmates argues on appeal that the United States Supreme Court’s decision in Epic Systems abrogated the holding in Iskanian concerning the enforceability
of PAGA waivers

. We disagree.
In Iskanian, our Supreme Court considered the enforceability of both PAGA waivers and class action waivers in
the context of employment contracts. The court held that in light of the United States Supreme Court decision in AT&T Mobility LLC v. Concepcion (20 11) 563 U.S. 333 ( Concepcion ) the state rule limiting class action waivers in employment contracts that our Supreme Court had previously established in Gentry v.9

Superior Court (2007) 42 Cal.4th 443 ( Gentry ) was preempted by the FAA. ( Iskanian, supra, 59 Cal.4th at p. 364.) The court also rejected the argument that class action waivers in employment
contracts are invalid because class actions are a type of concerted activity that is protected under the National Labor Relations Act (NLRA ) ( 29 U.S.C. § 151 et seq.). The court held that

, in light of Concepcion

, a rule against class action waivers is invalid because
it interfere s with “fundamental attributes of arbitration” and
there is no basis to conclude that the NLRA establishe d a contrary rule that overrides “the FAA’s mandate.” ( Iskanian,

supra, 59 Cal.4th at pp. 372

– 373.) However, with respect to a representative PAGA claim, our Supreme Court held that: (1) a waiver of the right to bring such
a claim is invalid under state law, and (2) this state law rule is not preempted by the FAA. ( Iskanian, supra, 59 Cal.4th at pp.
382

– 389.) The court explained that a representative PAGA claim
is not a private action brought by an individual or a class of individuals, but instead is a type of qui tam action brought by a plaintiff on behalf of the state. In that role, a PAGA plaintiff may collect civil penalties for Labor Code violations, 75 percent of which go to the Agency and 25 percent of which are awarded to the plaintiff

. (§ 2 699, subd. (i); Iskanian, at pp. 380

– 382.) The

court reasoned that “the FAA aims to ensure an efficient forum
for the resolution of private disputes, whereas a PAGA action is a dispute between an employer and the state Agency .” ( Iskanian, at p. 384.)
Pos tmates acknowledges that this court must follow the holding in Iskanian unless the United States Supreme Court has “decided the same question differently.” (See Truly Nolen of America v. Superior Court (2012) 208 Cal.App.4th 487, 507 ( Truly10

Nolen ) .) Post mates argues that the United States Supreme Court did just that in Epic Systems.
In Epic Systems, the court did in fact decide one of the same questions that our Supreme Court considered in Iskanian. Consistent with our Supreme Court’s holding in Iskanian, t he high court held that the NLRA’s protection of the right of workers to engage in collective bargaining and other collective conduct, including the right “to engage in other concerted activities for the purpose of

. . . other mutual aid or prot ection” does not override
the FAA’s protection of the right to agree to individual
arbitration in lieu of class actions

. ( 29 U.S.C. § 157; see Epic Systems, supra, 138 S.Ct. at pp. 1625

– 1627 .) But that issue is

not the one that is relevant here. T he hig h court did not consider
or decide the issue our Supreme Court decided in Iskanian that
controls the outcome in this case

— i.e. , whether the FAA preempts a state law rule prohibiting waiver of a worker’s right to bring a representative action on behalf of the state.
There was no need in Epic Systems for the court to address representative actions at all, and the court did not do so. Rather, as the court explained, the question at issue in that case was whether employees and employers should “ be a llowed to agree that any disputes between them will be resolved through one

- on

one arbitration? Or should employees always be permitted to bring their claims in class or collective actions , no matter what they agreed with their employers?” ( Epic Systems, supra, 138 S.Ct. at p. 1619, italics added.) Answering that question did not require the court to decide
whether a worker may waive the right to bring a representative
action on behalf of a state government. Nor did it require the court to address the fundamental ground of our Supreme Court’s11

decision in Iskanian

. As discussed, the court in Iskanian held
that a PAGA action is not a n individual dispute at all, but is an action brought on behalf of the state by an aggriev ed employee who is designated by statute to be a proper representative to bring such an action. Thus, it is clear that the United States Supreme Court did

not consider the same issue concerning PAGA waivers as our Supreme Court decided in Iskanian , much le ss reach a contrary
conclusion

. Whether the high court might someday do so is not
the issue. Nor is it our task to analyze the United States Supreme Court’s reasoning and language to predict how the court might rule if the issue is ultimately presented to it

. As the court

ex plained in Truly Nolen

, with respect to federal statutory issues “intermediate appellate courts in California are absolutely bound to follow the decisions of the California Supreme Court, unless the United States Supreme Co urt has decided the same question differently

. ” ( Truly Nolen, supra, 208 Cal.App.4th at p. 507 .)
That is true even if the high court decides some other issue in a way that casts doubt on our Supreme Court’s holding. ( Ibid. [ concluding that the court must follow our Supreme Court’s
decision in Gentry even though the United States Supreme
Court’s decision in Concepcion “implicitly disapproved the reasoning of the Gentry court”].)
Postmates’s reliance on general language in Epic Systems directing t hat arbitration agreements must be enforced “according to their terms” is therefore unpersuasive. In Epic Systems, t he high court did not address the specific issue underlying our Supreme Court’s holding in Iskanian

. The court’s general language in Epic Systems concerning the primacy of the
FAA does not contradict our Supreme Court’s holding that the12

objectives of the FAA are not at stake in a representative PAGA
action because such an action is not a private dispute . (See Iskanian, supra, 59 Cal.4 th at p. 384.)
O ur Supreme Court has not directly addressed whether its holding in Iskanian survives Epic Systems

. However, in several
cases decided after Epic Systems , the court has emphasized the representative nature of a PAGA action. That of course i s the key
factor underlying the court’s decision in Iskanian that the FAA does not preempt the state rule prohibiting waiver of PAGA
claims.
In Kim

, the court held that an employee does not lose standing to pursue a representative PAGA claim by settling his or her individual claims for Labor Code violations. ( Kim, supra,
9 Cal.5th at p. 80 .) The court confirmed that a PAGA claim is “legally and conceptually different from an employee’s own suit for damages and statutory penalties

. ” ( Id. at p. 81.) The court
cited its conclusion in Iskanian that “a PAGA claim is an enforcement action between the [Agency] and the employer, with the PAGA plaintiff acting on behalf of the government. ” ( Id. at

p. 86 .)
I n ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175 ( ZB ) the
court held that some individual compensatory remedies are not available in a representative PAGA action. ( Id. at p. 182.) In doing so, the court cited its holding in Iskanian that predispute
waiver s of the right to bring such a representative action are unenforceable, affirming its conclusion that “the FAA did not preempt this rule or otherwise require enforcement of such a waiver in an arbitration agreement.” ( Id. at p. 185, citing Iskanian, supra, 59 Cal.4th at pp. 384

– 389.)13 In addition, several C ourt of A ppeal decisions, including a prior decision by this court, have either held or assumed that the state rule prohibiting PAGA waivers announced in Iskanian
survives Epic Systems. In Co rreia v. NB Baker Electric, Inc. ( 2019) 32 Cal.App.5th 602 ( Correia )

, Division One of the Fourth Appel l ate District rejected the argument that Postmates makes
here. The court cited Iskanian ’s holding that “a ban on bringing
PAGA actions in any forum violates public policy a nd that this rule is not preempted by the FAA because the claim is a governmental claim.” ( Id. at p. 619.) The court noted that Epic Systems concerned a different issue concerning the enforceability
of an “ind ividualized arbitration agreement ” in light of the
NLRA . T he court concluded that Epic Systems therefore did not “decide the same question differently.” ( Ibid. ) 7 In Provost

, t hat

7 Postmates attempts to distinguish Correia on the ground that, unlike the Employment Agreement at issue here, the arbitration agreement in that case did not include an opt

- out provision. The difference is irrelevant to the only argument that Postmates makes on appeal. Postmates argues that, under Epic Systems, the FAA preempts the state law rule announced in Iskanian that PAGA claims are nonwaivable. By preserving the option of pursuing a PAGA claim for aggrieved employees, an opt

out provision might be relevant to the applicability of that state law rule. But Postmates does not explai n why such a provision has any bearing on whether the FAA preempts it . In any event, the opportunity to opt out of a PAGA waiver provision before the inception of any dispute has been repeatedly rejected as a defense
to un enforceability under the court’s rationale in Iskanian . (See Juarez v. Wash Depot Holdings, Inc. (2018) 24 Cal.App.5th 1197, 1203; Williams v. Superior Court (2015) 237 Cal.App.4th 642

, 647

– 648 ; Securitas Security Services USA, Inc. v. Superior Court14

same court subsequently reaffirmed its ruling in Correia that

“ Epic did not overrule Iskanian. ” ( Provost, supra, 55 Cal.App.5th at p. 997.) A nd a nother division of the Fourth District has
followed Correia “in holding that [ Epic Systems ] does not undermine the reasoning of Iskanian

. ” ( Collie v. The Icee Co. (2020) 52 Cal .App.5th 477, 480.)
Division Two of the First Appellate District also recently adopted the holding in Correia

. I n Olson v. Lyft , Inc. (2020) 56 Cal.App.5th 862 , t he court concluded that Correia had “thoughtfully analyze d” and rejected the argument that Iskanian is no longer good law in light of Epic Systems

. ( Id. at p. 864.)
And in Zakaryan v. The Men’s Wearhouse , Inc. (2019) 33 Cal.App.5th 659, 671 ( Z akaryan ) , in the course of deciding a
different issue

, this court ci ted Correia in noting that “ Epic Systems did not overturn Iskanian , as only Iskanian deals with a ‘claim for civil penalties brought on behalf of the government

. ’ ” 8 Consistent with these cases, we conclude that Epic Systems
did not decide the same issue concerning the enforceability of

(2015) 234 Cal.App.4th 1109, 1121

– 1122; see also Provost, supra, 55 Cal

. App.5th at pp. 993

– 994.)

8 Our Supreme Court disapproved Zakaryan on an unrelated ground. Zakaryan held that an employee’s PAGA claim seeking remedies under section 558 could not be split between an arbitrable claim for underpaid wages and a PAGA claim for statutory penalties. (See Zakaryan, supra, 33 Cal.App.5th at p. 671 .) In ZB, o ur Supreme Court disapproved that holding to t he extent that it is inconsistent with the court’s holding in ZB that “unpaid wages under section 558 may not be recovered through a PAGA action.” ( ZB, supra, 8 Cal.5th at

p. 196, fn. 8.)15

PAGA waivers that our Supreme Court decided in Iskanian. We
therefore follow Iskanian in affirming the trial court’s order denying Po stmates’ s petition for arbitration

. DISPOSITION
The trial court’s order is affirmed

. Santana is entitled to
her costs on appeal.
NOT TO BE PUBLISHED

.

LUI, P. J.
We concur:

ASHMANN

- GERST

, J.

CHAVEZ

, J.