Court Opinion

ID: 4656421
Source: CourtListenerOpinion
Date Created: 2021-02-01 23:02:21.538389+00
Date Added: 2024-06-11T08:00:52.216034
License: Public Domain

Filed 2/1/21 Kaplan v. The Oakland Raiders etc. CA1/1
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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

                                      FIRST APPELLATE DISTRICT

                                                   DIVISION ONE

 BRADLEY KAPLAN,
             Plaintiff and Respondent,
                                                                    A160773
 v.
 THE OAKLAND RAIDERS AND                                            (Alameda County
 RAIDERS FOOTBALL CLUB,                                             Super. Ct. No. RG19043119)
 LLC,
             Defendants and Appellants.

         The Oakland Raiders and Raiders Football Club, LLC (collectively, the
Raiders) appeal from a trial court order denying their petition to compel
Bradley Kaplan to arbitrate his representative Private Attorney General Act
of 2004 (PAGA) claims. (Lab. Code, § 2699 et seq.; Civ. Proc. Code, § 1294,
subd. (a).)1 They contend the trial court erred in finding that an agreement
by Kaplan to arbitrate his PAGA claims was unenforceable, because it was
made without the state’s consent. We find no error and affirm.
                                             I.        BACKGROUND
         The Raiders operate a professional football team, and Kaplan was hired
as a talent scout. Kaplan’s employment contract contained an arbitration

       All statutory references are to the Labor code unless otherwise
         1

indicated.
                                                               1
clause requiring him to arbitrate “all matters in dispute” between him and
the Raiders. Under the clause, Kaplan waived his right to commence or
participate in a representative or class action. This waiver, however,
included an exception that stated, “[Kaplan] and [the Raiders] may bring a
representative action under any statute wherein their rights to bring such
representative action are deemed unwaivable (such as the Private Attorneys
General Act of 2004), but [Kaplan] and [the Raiders] must bring such claims
in arbitration.” Thus, the contract allowed Kaplan to bring a PAGA claim,
but only in an arbitration proceeding.
      Kaplan’s employment ended in June 2019. A few months later, Kaplan
submitted a claim to the Labor Workforce Development Agency alleging that
the Raiders had violated the Labor Code. Our record does not indicate
whether the agency notified Kaplan that it would investigate the claim. In
November 2019, Kaplan sued the Raiders. The suit included various
individual claims alleging wrongful termination. It also included claims
alleging that the Raiders wrongfully failed to pay wages and required
employees to sign overbroad confidentiality and non-disparagement
agreements intended to prevent employees from whistleblowing about work
conditions. Kaplan claimed he was an aggrieved employee, entitled to seek
civil penalties in a representative capacity under PAGA (§ 2698 et seq.).
      The Raiders petitioned the trial court to compel Kaplan to arbitrate his
claims. The trial court granted the petition as to all of the claims except
those brought under PAGA. It concluded that “[a]ctions under PAGA are in
nature of a qui tam proceeding in that plaintiffs seek civil penalties that
would otherwise be recoverable by the [state] . . . . An employee cannot agree
to arbitrate PAGA claims because, before notice to the state and an
opportunity for the state to investigate, the employee has no actual or
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apparent authority to compromise the state’s interest in a judicial forum for
its claims.”
                              II.   DISCUSSION
A.    Standard of Review and Legal Background
      The denial of a motion to compel arbitration based on a decision of law
is reviewed de novo. (Ramos v. Westlake Services, LLC (2015)
242 Cal.App.4th 674, 686.) We affirm if the order is correct on any theory
apparent from the record. (Ibid.)
      Under PAGA, aggrieved employees act as proxies for the state when
pursuing civil penalties against their employers for Labor Code violations.
(Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348,
360, 380 (Iskanian); § 2699.) Aggrieved employees are “deputized” to
commence a civil action if, after giving notice of the alleged Labor Code
violations to the Labor and Workforce Development Agency, the agency
either declines to investigate or the agency’s investigation of the alleged
violation results in no citation. (§ 2699.3, subd. (a)(2)(A)-(B); Iskanian, at
p. 380.) As the California Supreme Court explained in Iskanian, PAGA was
enacted “to augment the limited enforcement capability of the [state] by
empowering employees to enforce the Labor Code as representatives of the
[state].” (Iskanian, at p. 383.) An agreement waiving the employees’ right to
pursue PAGA claims “disable[s] one of the primary mechanisms for enforcing
the Labor Code,” and it is therefore “contrary to public policy and
unenforceable as a matter of state law.” (Id. at pp. 383–384.)
      Iskanian also concluded that the rule against PAGA waivers is not
preempted by the Federal Arbitration Act (9 U.S.C. § 1 et. seq.). (Iskanian,
supra, 59 Cal.4th at pp. 360, 384.) The Court explained that the FAA “aims
to ensure an efficient forum for the resolution of private disputes.” (Ibid.) A
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PAGA action, a type of qui tam action, is not such a private dispute as it “is a
dispute between an employer and the state Agency”—a claim beyond the
scope of the FAA, which “does not aim to promote arbitration of claims
belonging to a government agency.” (Id. at pp. 382, 384, 388.) When a PAGA
claim is brought by a statutorily designated proxy for the agency, the
“fundamental character of the claim as a public enforcement action is the
same in both instances.” (Id. at p. 388.) Thus, the rule precluding waivers of
an employee’s right to bring a representative PAGA action does not thwart
the FAA’s objectives. (Ibid.)

B.    The Trial Court Properly Declined to Compel Arbitration of
      Kaplan’s PAGA Claims.
      The Raiders argue that the trial court erred in not enforcing the
arbitration clause because the clause did not require Kaplan to waive his
right to address his PAGA claims in all forums, but merely required him to
address them in a particular forum—i.e., arbitration. According to the
Raiders, the trial court’s refusal to enforce the arbitration clause was
improper because Iskanian “expressly contemplates that an employee may
agree to arbitrate representative PAGA claims.” We disagree.
      In arguing that the arbitration clause should have been enforced
because it allowed for the arbitration of the PAGA claims, the Raiders
overstate the import of ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175 (ZB).
ZB noted that “[a]n employee’s predispute agreement to individually
arbitrate [his or] her claims is unenforceable where it blocks an employee’s
PAGA claim from proceeding.” (Id. at p. 198.) This comment merely
confirmed Iskanian’s holding that agreements waiving the right to pursue
PAGA claims are unenforceable. (See Iskanian, supra, 59 Cal.4th at p. 384.)

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The comment cannot be reasonably read to suggest that any agreement that
does not completely bar a PAGA claim from being redressed is necessarily
enforceable. ZB simply did not address whether an arbitration clause can
require PAGA claims to be arbitrated. (See ZB, supra, 8 Cal.5th at p. 181.)
      Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 624-625
(Correia), did address the issue, and it rejected the same arguments that the
Raiders make here. In doing so, the court explained that the “state is the
owner of the [PAGA] claim and the real party in interest, and the state was
not a party to the arbitration agreement.” (Id. at pp. 620, 622 [analyzing the
trial court’s refusal to order PAGA claim to arbitration even though the scope
of the parties’ arbitration agreement encompassed PAGA representative
actions]; Iskanian, supra, 59 Cal.4th at p. 387.) The state “retains control of
the right underlying the employee’s PAGA claim at least until the state has
provided the employee with implicit or explicit authority to bring the claim.”
(Correia, at p. 622.) Until such authority has been conferred, an employee
does not have the authority to waive the right to litigate a PAGA claim in
court. (Ibid.) “Without the state’s consent, a predispute agreement between
an employee and an employer cannot be the basis for compelling arbitration
of a representative PAGA claim.” (Ibid.) We agree with Correia and the
other Courts of Appeal that have adopted this reasoning. (See, e.g., Bautista
v. Fantasy Activewear, Inc. (2020) 52 Cal.App.5th 650, 655 [“arbitration
agreements entered into before a plaintiff has been deputized for purposes of
a PAGA representative action [are] not enforceable for purposes of the PAGA
representative action”]; Collie v. The Icee Co. (2020) 52 Cal.App.5th 477, 483
(Collie) [“The state—the real party in interest—is not bound by [plaintiff’s]
predispute agreement to arbitrate” the PAGA action]; Julian v. Glenair, Inc.
(2017) 17 Cal.App.5th 853, 860 [“an agreement to arbitrate a PAGA claim,
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entered into before an employee is statutorily authorized to bring such a
claim on behalf of the state, is an unenforceable predispute waiver”];
Tanguilig v. Bloomingdale’s, Inc. (2016) 5 Cal.App.5th 665, 678 [because
PAGA plaintiff “acts as a proxy for the state only with the state’s
acquiescence . . . a PAGA claim cannot be ordered to arbitration without the
state’s consent”].)
      There is no evidence here that the state consented to an arbitration.
Kaplan’s employment contract was expressly “by and between Raiders
Football Club, LLC (‘Club’) and Brad Kaplan (‘Scout’)”—not the state, on
whose behalf the PAGA claims were brought. The arbitration clause only
governed disputes between Kaplan and the Raiders. Thus, the trial court
could not have compelled Kaplan to arbitrate his PAGA claims because the
state, the real party in interest, was not a party to arbitration clause.2 This
determination does not conflict with the FAA, despite the Raider’s insistence
to the contrary. The FAA requires rigorous enforcement of arbitration
agreements, “ ‘ “including terms that specify with whom the parties chose to
arbitrate their disputes.” ’ ” (Collie, supra, 52 Cal.App.5th at p. 483.) By its
plain terms, the arbitration clause here did not bind the state or identify it as
a party to the contract. (See ibid.)

      2  We need not decide whether the FAA preempts states from
categorically prohibiting the arbitration of certain claims, because the trial
court’s order found no such prohibition here. The Raiders interpret the order
as categorically barring PAGA claims from arbitration, because it states that
an employee “cannot be compelled to arbitration.” But the next sentence of
the order clarifies that employees cannot agree to waive or be compelled to
arbitrate a PAGA action without actual or apparent authority from the state
“to compromise the state’s interest in a judicial forum for its claims.” In
other words, the court’s order left open the possibility that an employee could
be required to arbitrate PAGA claims if the employee had state authority to
consent to such an arbitration.
                                        6
      The Raiders urge us to reject Correia in favor of federal cases holding
that individual employees can agree to arbitrate PAGA or qui tam claims
generally. (See, e.g., Valdez v. Terminix Internat. Co. Ltd. Partnership (9th
Cir. 2017) 681 Fed.Appx.592, 594 [PAGA]; Wulfe v. Valero Refining Co.-Cal.
(9th Cir. 2016) 641 Fed.Appx.758, 760 [PAGA]; U.S. v. Bankers Ins. Co. (4th
Cir. 2001) 245 F.3d 315, 325 [qui tam]; Cabrera v. CVS Rx Servs., Inc. (N.D.
Cal., Mar. 16, 2018, No. C 17-05803 WHA) 2018 U.S. Dist. LEXIS 43681
[PAGA].) We decline to do so. While these cases determined that the
employees acted as state agents when they signed their respective arbitration
agreements, they did not address whether the employees properly assumed
the role of proxies for the state under PAGA’s statutory scheme by being
“aggrieved” at the time they agreed to arbitration and “deputized.” (Correia,
supra, 32 Cal.App.5th at pp. 623—624.) One of the cases did not analyze
PAGA at all. (See U.S. v. Bankers Ins. Co., 245 F.3d at p. 325.)
      Finally, the Raiders have forfeited their argument that Kaplan was
authorized by the state to enter into agreements on its behalf because he was
an “aggrieved employee” at the time he signed his employment contract. The
argument was not raised in the trial court, and we decline to exercise our
discretion to consider it for the first time on appeal. (See Mattco Forge, Inc. v.
Arthur Young & Co. (1997) 52 Cal.App.4th 820, 847; Resolution Trust Corp. v.
Winslow (1992) 9 Cal.App.4th 1799, 1810.)
      The trial court properly denied the Raiders’ petition to compel
arbitration of the PAGA claims.

                             III.   DISPOSITION
      The trial court’s order denying appellants’ petition to compel
arbitration on respondent’s PAGA claims is affirmed.
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                                      _________________________
                                      Humes, P.J.

WE CONCUR:

_________________________
Margulies, J.

_________________________
Banke, J.

Kaplan v. Oakland Raiders and Raiders Football Club, LLC A160773

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