Court Opinion

ID: 4662407
Source: CourtListenerOpinion
Date Created: 2021-02-23 23:02:05.093714+00
Date Added: 2024-06-11T08:02:21.274489
License: Public Domain

Filed 2/23/21 Schofield v. Skip Transport CA1/5
                NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.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 FIVE

    THOMAS SCHOFIELD,
          Plaintiff and Respondent,
                                                               A159241
    v.
    SKIP TRANSPORT, INC.,                                      (Alameda County
                                                               Super. Ct. No. RG19032025)
          Defendant and Appellant.

         Skip Transport, Inc. (Skip Transport) appeals the trial court’s order
denying its petition to compel arbitration of representative claims under the
Private Attorney General Act of 2004 (PAGA; Lab. Code, § 2699 et seq.).1 We
affirm.
                                             BACKGROUND
         Thomas Schofield (Plaintiff) worked for Skip Transport recharging
batteries on the company’s electric scooters. Plaintiff accepted Skip
Transport’s Skip Charger Agreement, which includes an arbitration
agreement and a waiver of the “right or authority for any dispute to be
brought, heard or arbitrated as a class, collective or representative action, or
as a member in any purported class, collective or representative proceeding.”

1   All undesignated statutory references are to the Labor Code.

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Plaintiff could have opted out of the arbitration agreement within 30 days of
acceptance, but he did not do so. The Skip Charger Agreement also provided
that chargers were independent contractors and not employees of Skip
Transport.
      Plaintiff sued Skip Transport, seeking PAGA penalties for alleged
Labor Code violations. The complaint alleged Skip Transport misclassified
chargers as independent contractors when they were in fact employees. Skip
Transport filed a petition to compel arbitration, which the trial court denied.
This appeal followed. (Code Civ. Proc., § 1294, subd. (a).)
                                 DISCUSSION2
I.    Legal Background
      PAGA “authorizes an employee to bring an action for civil penalties on
behalf of the state against his or her employer for Labor Code violations
committed against the employee and fellow employees, with most of the
proceeds of that litigation going to the state.” (Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 360 (Iskanian).)
“The authorization to pursue PAGA civil penalties in a lawsuit is contained
in section 2699, subdivision (a), which states in part: ‘any provision of this
code that provides for a civil penalty to be assessed and collected by [a state
agency] . . . for a violation of this code, may, as an alternative, be recovered
through a civil action brought by an aggrieved employee on behalf of himself

2In his response brief, Plaintiff argues Skip Transport’s appeal should be
dismissed as frivolous. Plaintiff did not file the requisite motion to dismiss
pursuant to California Rules of Court, rule 8.54, and we therefore decline his
dismissal request. (Halliburton Energy Services, Inc. v. Department of
Transportation (2013) 220 Cal.App.4th 87, 106 [“We decline Halliburton’s
request for dismissal, because it did not serve and file a separate motion for
such relief as required by California Rules of Court, rule 8.54.”].)

                                        2
or herself and other current or former employees pursuant to the procedures
specified in Section 2699.3.’ (Italics added.) An ‘aggrieved employee’ is
defined as ‘any person who was employed by the alleged violator and against
whom one or more of the alleged violations was committed.’ (§ 2699, subd.
(c).) [¶] PAGA therefore works by empowering aggrieved employees to act as
[the state’s] proxy or agent to bring representative actions to recover
statutory civil penalties for their employers’ violations. [Citation.] A PAGA
action is ‘ “a substitute for an action brought by the government itself” ’
[citation], where the governmental entity ‘is always the real party in
interest.’ ” (Provost v. YourMechanic, Inc. (2020) 55 Cal.App.5th 982, 990–
991 (Provost).)
      In Iskanian, our Supreme Court concluded that a predispute PAGA
waiver “is contrary to public policy and thus unenforceable under state law.
[Citation.] The court then determined this conclusion was not preempted by
the FAA [Federal Arbitration Act] because it found the FAA was intended to
govern the resolution of ‘private disputes, whereas a PAGA action is a dispute
between an employer and the state Agency.’ [Citation.] . . . The court
stressed the nature of a PAGA claim as ‘ “ ‘fundamentally a law enforcement
action designed to protect the public and not to benefit private parties’ ” ’
[citation] and that ‘ “an aggrieved employee’s action under the [PAGA]
functions as a substitute for an action brought by the government itself” ’
[citation].” (Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 616
(Correia).)
II.   Misclassification Issue
      Skip Transport contends that the issue of whether Plaintiff is an
employee or independent contractor is a private dispute subject to
arbitration, because only employees have standing to bring PAGA claims.

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      The same contention was considered, and rejected, in Provost. Provost
reasoned that “requiring [the plaintiff] to arbitrate whether he was an
‘aggrieved employee’ with standing to bring a representative PAGA action
would require splitting that single action into two components: an arbitrable
‘individual’ claim (i.e., whether he was an independent contractor or
employee under either the parties’ written arbitration provision or section
226.8 . . . , making it unlawful to willfully misclassify an individual as an
independent contractor); and a nonarbitrable representative claim.” (Provost,
supra, 55 Cal.App.5th at p. 988.) Provost held such a split was prohibited by
“a series of cases holding a PAGA-only representative action is not an
individual action at all, but instead is one that is indivisible and belongs
solely to the state.” (Ibid.)
      In one such case, Williams v. Superior Court (2015) 237 Cal.App.4th
642 (Williams), “the petitioner filed a single cause of action under PAGA,
alleging [the company] violated various provisions of the Labor Code.”
(Provost, supra, 55 Cal.App.5th at p. 993.) Provost explained that Williams
considered “whether the petitioner was required to arbitrate the underlying
controversy involving the alleged Labor Code violations of [the company] for a
determination whether he was an ‘aggrieved employee’ under section 2699,
subdivisions (a) and (c) with standing to bring a representative PAGA claim.
(See Williams, supra, 237 Cal.App.4th at p. 649.) In rejecting this argument,
. . . the Williams court found that, ‘ “[b]ecause the PAGA claim is not an
individual claim, it was not within the scope of the [employer’s] request that
individual claims be submitted to arbitration” [citation].’ (Ibid.) Therefore,
the court in Williams further found the petitioner could not ‘be compelled to
submit any portion of his representative claim to arbitration, including

                                        4
whether he was an “aggrieved employee” ’ within the meaning of section
2699, subdivisions (a) and (c).” (Provost, at p. 994.)
      Provost continued: “Since being decided, a series of cases have followed
Williams and its holding that a single representative PAGA action is not
divisible into separate arbitrable ‘individual’ and nonarbitrable
representative components in determining whether a plaintiff is an
‘aggrieved employee’ with standing to bring such an action. (See e.g., Jarboe
v. Hanlees Auto Group (2020) 53 Cal.App.5th 539, 557 [‘Because a PAGA
claim is representative and does not belong to an employee individually, an
employer should not be able [to] dictate how and where the representative
action proceed’]; Brooks v. AmeriHome Mortgage Company, LLC (2020) 47
Cal.App.5th 624, 629 [because the plaintiff brought a PAGA representative
claim, ‘he cannot be compelled to separately arbitrate whether he was an
aggrieved employee’]; Hernandez v. Ross Stores, Inc. (2016) 7 Cal.App.5th 171
[‘determination of whether the party bringing the PAGA action is an
aggrieved party . . . should not be decided separately by arbitration’]; Perez v.
U-Haul Co. of California (2016) 3 Cal.App.5th 408, 421 (Perez) [‘California
law prohibits the enforcement of an employment agreement provision that
requires an employee to individually arbitrate whether he or she qualifies as
an “aggrieved employee” under the PAGA, and then (if successful) to litigate
the remainder of the “representative action in the superior court” ’].)”
(Provost, supra, 55 Cal.App.5th at p. 994.)
      Provost concluded that these cases “firmly reject the contention that the
issue of a plaintiff’s status as an ‘aggrieved employee’ must first be arbitrated
before he or she has standing to pursue such a claim.” (Provost, supra, 55
Cal.App.5th at p. 995.) The company’s argument that the determination of
whether the plaintiff was an employee or independent contractor must be

                                        5
resolved in arbitration before the plaintiff could show he was an “aggrieved
employee” with PAGA standing “falls within the ambit of these cases.” (Id. at
p. 996.) Provost found its conclusion bolstered by the Supreme Court’s recent
approving citation of cases “which have rejected efforts to split a PAGA-only
action into individual and representative components.” (Id. at p. 996, citing
Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 88.)
       Provost finally noted that the plaintiff “has no private right of action” to
pursue his misclassification claim against the company, and therefore “the
only recourse available to [the plaintiff] in pursuing such an alleged violation
under this particular statute is through PAGA.” (Provost, supra, 55
Cal.App.5th at p. 997.) “It would defy logic to require [the plaintiff] to
arbitrate the issue of whether he was an independent contractor or employee
for purposes of section 226.8, when he and others similarly situated to him
are only able to obtain any relief under this statute in a nonarbitrable PAGA
action.” (Ibid.)
       Provost is thorough, well-reasoned, and persuasive. We adopt its
reasoning and reject Skip Transport’s claim that it is entitled to arbitration of
the misclassification issue.3
III.   Epic
       In the alternative, Skip Transport argues that recent United States
Supreme Court cases have abrogated Iskanian’s holding that PAGA waivers

3 We also reject Skip Transport’s argument that the parties agreed to
delegate arbitrability issues to an arbitrator. The state—the real party in
interest under Iskanian—did not agree to such delegation. (See Bautista v.
Fantasy Activewear, Inc. (2020) 52 Cal.App.5th 650, 657–658 [“Because [the
plaintiffs] were not acting as agents of the state when they entered into the
arbitration agreements at issue here, [the company] has identified no
arbitration agreement that would bind the real party in interest here—the
state—to arbitration, even of the question of arbitrability.”].)

                                         6
are unenforceable. We join the numerous California Court of Appeal
decisions that have uniformly rejected this argument.4
      After Iskanian, the United States Supreme Court decided Epic Systems
Corp. v. Lewis (2018) __ U.S. __, 138 S.Ct. 1612 (Epic). “Although most of the
Epic opinion concerned an analysis of the [National Labor Relations Act] as it
relates to the FAA, the court also strongly reiterated the settled principles
regarding the breadth of FAA preemption, and made clear that the FAA
requires courts ‘ “rigorously” to “enforce arbitration agreements according to
their terms, including terms that specify with whom the parties choose to
arbitrate their disputes and the rules under which that arbitration will be
conducted.” ’ ” (Correia, supra, 32 Cal.App.5th at p. 618.)
      In Correia, as here, the employer argued Iskanian had been abrogated
by Epic. (Correia, supra, 32 Cal.App.5th at p. 619.) Correia began by noting
that, “[o]n federal questions, intermediate appellate courts in California must
follow the decisions of the California Supreme Court, unless the United
States Supreme Court has decided the same question differently.” (Ibid.)
After discussing Iskanian and Epic, Correia rejected the employer’s
argument: “Because the California Supreme Court found a PAGA claim
involved a dispute not governed by the FAA, and the waiver would have
precluded the PAGA action in any forum, it held its PAGA-waiver
unenforceability determination was not preempted. Epic did not reach the

4 Despite these numerous published decisions, Skip Transport spends 25
pages on this argument in its briefs on appeal, including a surprising number
of pages arguing that Iskanian was wrongly decided. (See Eisenberg et al.,
Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2020) ¶ 9:25
[“Busy appellate justices place a very high premium on succinctly written,
well-organized briefs. ‘Longer’ is not ‘better’ and, indeed, is likely to be
counterproductive.”].)

                                       7
issue regarding whether a governmental claim of this nature is governed by
the FAA, or consider the implications of a complete ban on a state law
enforcement action. Because Epic did not overrule Iskanian’s holding, we
remain bound by the California Supreme Court’s decision.” (Correia, supra,
32 Cal.App.5th at p. 620.)
      At least four other Court of Appeal decisions have reached the same
conclusion. (Collie v. Icee Company (2020) 52 Cal.App.5th 477, 480 [“We . . .
join Correia . . . in holding that Epic . . . does not undermine the reasoning of
Iskanian.”]; Zakaryan v. The Men’s Wearhouse, Inc. (2019) 33 Cal.App.5th
659, 671 [“Epic Systems did not overrule Iskanian”], disapproved on another
ground in ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 196, fn. 8; Provost,
supra, 55 Cal.App.5th at p. 997 [“We reaffirm here our analysis and decision
in Correia that Epic did not overrule Iskanian.”]; Olson v. Lyft, Inc. (2020) 56
Cal.App.5th 862, 865 [“we reject Lyft’s position based on Correia”].) We do as
well, for the reasons amply explained in Correia and the other decisions.5
      Skip Transport attempts to distinguish these decisions on the ground
that Plaintiff could have opted out of the PAGA waiver. “ ‘Iskanian’s
underlying public policy rationale—that a PAGA waiver circumvents the
Legislature’s intent to empower employees to enforce the Labor Code as
agency representatives and harms the state’s interest in enforcing the Labor
Code—does not turn on how the employer and employee entered into the

5 Skip Transport points to two other post-Iskanian United States Supreme
Court cases, but these cases, like Epic, do not reach the issue decided in
Iskanian. (Henry Schein, Inc. v. Archer and White Sales, Inc. (2019) __ U.S.
__, 139 S.Ct. 524 [an agreement to delegate arbitrability to an arbitrator
must be enforced]; Lamps Plus, Inc. v. Varela (2019) __ U.S. __, 139 S.Ct.
1407 [ambiguity in arbitration agreement does not create inference that
parties agreed to classwide arbitration].)

                                        8
agreement, or the mandatory or voluntary nature of the employee’s initial
consent to the agreement.’ ” (Williams, supra, 237 Cal.App.4th at p. 648;
accord, Securitas Security Services USA, Inc. v. Superior Court (2015) 234
Cal.App.4th 1109, 1121–1123.) Accordingly, Plaintiff’s ability to opt out does
not impact our analysis.
                               DISPOSITION
      The order is affirmed. Respondent is awarded his costs on appeal.

                                      9
                                         SIMONS, Acting P.J.

We concur.

BURNS, J.

SELIGMAN, J.*

(A159241)

*Judge of the Alameda County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.

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