Court Opinion

ID: 2682316
Source: CourtListenerOpinion
Date Created: 2014-07-08 22:01:14.25082+00
Date Added: 2024-06-11T13:12:43.314721
License: Public Domain

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

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

MARIA REBOLLEDO,

     Plaintiff and Respondent,                                         G048625

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

TILLY’S, INC. et al.,                                                  OPINION

     Defendants and Appellants.

                   Appeal from an order of the Superior Court of Orange County, Steven L.
Perk, Judge. Affirmed.
                   Sheppard, Mullin, Richter & Hampton, Ryan D. McCortney and David Van
Pelt for Defendants and Appellants.
                   The Cooper Law Firm and Scott B. Cooper; The Carter Law Firm and
Roger R. Carter; The Phelps Law Group and Marc H. Phelps for Plaintiff and
Respondent.
              Tilly’s Inc. and World of Jeans & Tops, Inc. (hereafter collectively referred
to in the singular as Employer) appeal from the trial court’s order denying its motion to
compel arbitration of Maria Rebolledo’s putative class action regarding statutory wage
claims. We agree with the trial court’s conclusion the parties’ arbitration agreement
expressly excluded statutory wage claims from the arbitration obligation. The order is
affirmed.
                                               I
              Employer hired Rebolledo to work in its warehouse from July 6, 2000, to
December 28, 2001. She was rehired on January 28, 2002, and terminated October 30,
2012. In December 2012 she filed a lawsuit on behalf of herself and a putative class of
“similarly situated” persons. In February 2013 she filed a first amended complaint, the
operative complaint, alleging the following four causes of action against Employer:
(1) failure to provide meal periods; (2) failure to provide rest periods; (3) failure to pay
wages of terminated or resigned employees; (4) knowing and intentional failure to
comply with itemized wage statement provisions; (5) violations of the unfair competition
law; and (6) enforcement of Private Attorneys General Act of 2004.
A. Motion to Compel Arbitration
              On March 20, 2013, Employer filed a motion to compel arbitration and
dismiss the class claims. It supplied the arbitration agreement Rebolledo signed in 2004
(hereafter the 2004 Agreement). Rebolledo opposed the motion arguing the agreement
expressly excluded the claims made in her lawsuit and was invalid. In addition,
Rebolledo argued the agreement was unconscionable for the following reasons: (1) due
to language barriers, she did not understand the terms; (2) the agreement did not attach
any rules of arbitration or specify which rules applied; (3) the agreement lacked mutuality
and unfairly favored Employer; (4) it was an adhesion contract; and (5) it was
substantively unconscionable.

                                              2
              To support her opposition, Rebolledo attached her declaration written in
Spanish. The translation provided to the court stated, “I speak almost no English. I do
not read or write in English. Spanish is my first and only language. All of my oral
communications with my supervisors . . . have been in Spanish.” She added that at
various times during her employment she was given documents to sign. She declared,
“These documents were presented to me by one of my superiors. The contents of the
documents were not explained to me, and the superiors told me not to worry about the
documents because they contained nothing bad. I was told that I was required to sign
these documents. I witnessed co-workers of mine being presented with documents to
sign in the same way.”
              Rebolledo did not recall signing the 2004 Agreement and she believed, “I
was given this document with no explanation of what the document said, no opportunity
to ask questions about it, and not enough time to review and consider the document
before signing. I also believe I was told that I was required to sign the document.”
Rebolledo stated she could not read or understand the 2004 Agreement because it was
written in English.
              In its reply motion, Employer refuted all the points raised by Rebolledo. In
addition, Employer provided evidence Rebolledo signed two additional arbitration
agreements on June 28, 2001 (hereafter the 2001 Agreement), and on August 15, 2005
(the 2005 Agreement). The Employer noted Rebolledo also executed an employment
application in July 2000 in which she agreed to sign an arbitration agreement if she were
to be employed. Employer asserted all the arbitration agreements contained in bold
capital letters above the signature line a clear warning to Rebolledo that she was giving
up her right to a jury trial and to appeal the arbitrator’s decision.
              1. 2001 Employment Application & Employment Agreement.
              Rebolledo’s employment application requested her employment history and
contained four paragraphs written in very small type font immediately above the space

                                               3
provided for her signature. She placed her initials next to each paragraph. The first
paragraph related to certifying the information provided in her employment history. The
second paragraph authorized Employer to investigate her references and background.
The third was an agreement to arbitrate any disputes arising out of submission of the
application. In addition, it stated “I understand that if I am offered employment . . . I will
be asked to sign a mediation/arbitration agreement that applies to disputes arising from
my employment with [Employer].” The fourth paragraph clarified the application was
not an employment contract.
              Rebolledo started working June 7, 2000. On June 28, 2001, she signed a
two-page document entitled, “Tilly’s Employment Agreement.” The first page contained
the statement employment was at will and a provision stating Rebolledo agreed to read
and follow the terms contained in the Employer’s handbook. The remaining page and
one-half were devoted to information regarding mediation and arbitration.
              In the 2001 Agreement the parties agreed to mediate “any dispute arising
out of” employment, except “workers’ compensation claims, unemployment insurance[,]
and matters governed by the California Labor Commissioner[.]”
              The arbitration provision provided as follows: “Arbitration. In the event
mediation does not resolve the parties’ dispute, Employee and [Employer] agree to
submit all disputes arising from employment (excepting workers’ compensation claims,
unemployment insurance[,] and matters governed by the California Labor
Commissioner), including[,] but not limited to breach of contract, wrongful termination,
violation of public policy, discrimination, and harassment to binding arbitration with the
American Arbitration Association (‘AAA’) under the AAA National Rules for the
Resolution of Employment Disputes.”
              The next paragraph stated Orange County, California was the proper venue
for any arbitration proceedings. The 2001 Agreement provided: “If Employee and
[Employer] are unable to agree on a neutral arbitrator, [Employer] will obtain a list of

                                              4
arbitrators from [AAA]. Employee (first) and then [Employer] will alternately strike
names from the list until only one name remains.”
              In the next paragraph, the parties agreed Code of Civil Procedure
section 1283.05 would govern discovery conducted before arbitration and the arbitrator
would conduct a hearing based on AAA rules. The Employer stated the arbitrator would
issue a written opinion and award. “Employee and [Employer] agree that arbitration is
the exclusive forum for resolving all disputes arising out of or involving Employee’s
employment with [Employer] or the termination of that employment, including, but not
limited to, actions for [w]rongful [t]ermination, [d]iscrimination, [h]arassment, or any
violation of public policy (with the exception of claims for workers’ compensation,
unemployment insurance and any matter within the jurisdiction of the California Labor
Commissioner); provided, however, that either party may file a request with a court of
competent jurisdiction for ‘provisional remedies’, including, but not limited to
injunctions and restraining orders, pending resolution of any dispute through the
arbitration procedure set forth herein.” Because it is relevant to our analysis anon, we
point out the 2001 Agreement defines the type of claims excluded from arbitration as
including both “matters governed by” and “matter[s] within the jurisdiction” of the
California Labor Commissioner. In drafting the agreement, Employer treated the two
phrases as being interchangeable.
              The final paragraph of the 2001 Agreement discussed the payment of
arbitration costs and fees: “[Employer] agrees to pay all reasonable arbitration costs that
would exceed costs Employee would pay in court. The parties are responsible for their
own attorney[] fees.” The final statement of the agreement, written in capital letters and
bold type, stated, “Employee and [Employer] acknowledge they are giving up their right
to a jury trial and to appeal the arbitrator’s decision.” (Capitalization and bold omitted.)
The agreement contained Rebolledo’s signature but Employer did not sign it.

                                              5
              2. The 2004 Agreement
              Rebolledo was rehired on January 28, 2002. In March 2004, during this
second period of employment, she signed a half-page document entitled,
“employmentagreement [sic].” It contained the following short paragraph: “Employee
and [Employer] agree that arbitration is the exclusive forum for resolving all disputes
arising out of or involving Employee’s employment with [Employer] and the termination
of that employment, including, but not limited to, actions for [w]rongful [t]ermination,
[d]iscrimination, [h]arassment, or any violation of public policy (with the exception of
claims for workers’ compensation, unemployment insurance and any matter within the
jurisdiction of the California Labor Commissioner); provided, however, that either party
may file a request with a court of competent jurisdiction for ‘provisional remedies’, under
Code of Civil Procedure [s]ection 1281.8, pending resolution of any dispute through the
arbitration procedure set forth herein.” (Italics omitted.) As in the 2001 Agreement,
Employer agreed to pay whatever arbitration costs exceeded the costs of litigation and
specified each side would bear their own attorney fees. The final statement of the
agreement, written in capital letters and bold type, stated, “Employee and [Employer]
acknowledge you are both giving up your right to a jury trial and to appeal the arbitrator’s
decision.” (Capitalization and bold omitted.) The agreement contained Rebolledo’s
signature and the signature of the Employer’s director of human resources. It did not
contain many of the details concerning arbitration described in the 2001 Agreement.
              3. The 2005 Agreement
              On August 15, 2005, Rebolledo signed the Employer’s
“handbookacknowledgement [sic].” Like the 2004 Agreement, the document is half a
page long and contains the identical arbitration provisions, with one exception: This
document does not include the phrase exempting from the agreement “any matter within
the jurisdiction of the California Labor Commissioner.” Other than the title, there is no

                                             6
other mention of a handbook within the document. Rebolledo signed the document.
There was no place on the agreement for Employer’s signature.
              Counsel for Rebolledo filed a response arguing the reply brief contained
several new pieces of evidence. Counsel argued these documents did not prove
Rebolledo could read and understand English, or that she understood her dispute would
be subject to arbitration. To the contrary, the evidence “confirm[ed] . . . [Employer]
placed a variety of conflicting and confusing arbitration ‘agreements’ in front of its
employees and required them to sign without ever confirming that the employees could
read, let alone understand, what they were signing.” Rebolledo provided a supplemental
declaration (written in Spanish but accompanied by an English translation). Rebolledo
stated, “I have had the opportunity to review[] a document entitled ‘Employment
Application,’ . . . . The handwriting on the document, besides the signature and the
initials to the left of the text in the bottom section of the document, is not mine. This is
the handwriting of another person who read the application’s questions to me in Spanish,
to whom I told my answers in Spanish, and who then translated my answers and filled out
the paper in English.”
B. Supplemental Briefing
              After considering oral argument the court took the matter under
submission. Three days later it issued a minute order continuing the hearing 10 days to
permit the parties to file supplemental briefs regarding the execution and enforceability of
the 2005 Agreement.
              Employer submitted a supplemental brief. It argued the court’s tentative
ruling was incorrect. Employer asserted the 2005 Agreement was bilateral even though it
was missing Employer’s signature. It maintained the 2005 Agreement was enforceable.
              Rebolledo filed supplemental briefing, arguing the 2005 Agreement, like
the 2001 and 2004 Agreements, was procedurally and substantively unconscionable and

                                              7
should not be enforced. Rebolledo submitted another supplemental declaration. She
repeated she did not read, write, or speak English, and Spanish was her first and only
language. She spoke to her supervisors only in Spanish. She restated her recollection
that her supervisors gave her documents to sign at various times during her employment.
The documents were not explained to her and she was required to sign them. She
remembered being told the documents contained nothing bad. She stated the 2005
Agreement “appears to contain my signature.” However she clarified, “While I do not
have a specific recollection of signing this document, I have noticed on the ‘handbook
acknowledgment’ [2005 Agreement] that the blank titled ‘Employee Signature’ is not in
my handwriting. I believe this document was presented to me by Maria Pena, a former
supervisor. Ms. Pena would occasionally bring documents around for me to sign while at
[her place of employment], and she always did it while I was working on the line. I was
just told that the Company required me to sign, so I should sign, and I did.” Rebolledo
clarified no one explained what the document said, she had no opportunity to ask
questions about it, and she was not given time to review it. She was told signing was a
requirement. She was not given a copy of the document and it was “presented to [her]
with no opportunity for translation.” She added, the Employer’s personnel, including but
not limited to Ms. Pena, were aware she could not read or write English and could speak
very little English. “All of my communications with them were in Spanish.”
C. The Trial Court’s Ruling
              The trial court issued a minute order denying Employer’s motion to compel
arbitration. It ruled as follows with respect to the 2001 Agreement: (1) the 2000
employment application was superseded by the 2001 Agreement; (2) the 2001 Agreement
was not translated for Rebolledo; (3) the 2001 Agreement “expressly exclude[d] ‘any
matter within the jurisdiction of the California Labor Commissioner.’ The Labor
Commission[’s] jurisdiction is not limited to claims filed by a [l]itigant[]”; (4) “This
language of the [2001] Agreement is broad enough to include claims that have not been

                                              8
filed[]”; (5) “The Commission can also assert its jurisdiction on matters under its own
authority. The current claims could be subject to the Commission[’s] jurisdiction and
are, therefore, expressly excluded[]”; and (6) “By its express terms the Agreement
survived [Rebolledo’s] termination.”
              With respect to the 2004 Agreement, the court made the following findings:
(1) “The language of this 2004 Agreement does not by its terms supersede the 2001
Agreement[]”; (2) The 2004 Agreement “expressly excludes ‘any matter within the
jurisdiction of the California Labor Commissioner.’ The Labor Commissioner’s
jurisdiction is not limited to claims filed by a [l]itigant. This language of the 2004
Agreement is broad enough to include claims that have not been filed. The Commission
can also assert its jurisdiction on matters under its own authority. The current claims
could be subject to the Commission’s jurisdiction and are, therefore, expressly
excluded[]”; (3) the agreement is “expressly unenforceable due to the lack of signatures
of the ‘President, Senior Vice President and Director of Human Resources . . .’ which are
needed to change the policy. This agreement clearly states that the signatures’ . . . of all
three must by obtained.’ There are no [Employer’s agents] signatures on this agreement.
It lacks mutuality.”
              The court also determined the 2005 Agreement was unenforceable, stating,
“This document is a modification of the prior agreements because the language in the
[2005 Agreement] is changed. It, however, does not expressly supersede the 2001 and
2004 Agreements. Although plaintiff has signed the document there is no indication that
the document was translated for her or that she understood the terms of the handbook.
(Her declaration attached to the opposition indicates she does not speak or understand
English and did not understand the term ‘arbitration’.)”
              The court also noted, “The 2001 . . . Agreement (which is never stated to be
superseded) requires the signatures of [three] executives of [Employer] to modify it and
they are not on this document. Although the [E]mployer can unilaterally modify an

                                              9
employment contract there must be reasonable notice of their intent to do so and that is
lacking here. This [2005 Agreement] also is illusory in that it does not state or identify
the rules of the arbitration to be conducted which are material term[s] missing from the
agreement.”
                                              II
A. Applicable Law and Standard of Review
              “There is a strong public policy in favor of arbitration. [Citations.] [¶]
Under both the [FAA] [citation] and the California Arbitration Act (CAA; [citation]),
arbitration agreements are valid, irrevocable and enforceable except upon grounds that
exist for revocation of the contract generally. [Citations.]’ [Citation.] ‘“[A]rbitration is
a matter of contract and a party cannot be required to submit to arbitration any dispute
which he has not agreed so to submit.” [Citations.]’ [. . . see Sparks v. Vista Del Mar
Child & Family Services (2012) 207 Cal. App. 4th 1511, 1518 [‘[b]ecause arbitration is a
contractual matter, a party that has not agreed to arbitrate a controversy cannot be
compelled to do so’].)” (Mendez v. Mid-Wilshire Health Care Center (2013)
220 Cal. App. 4th 534, 540-541 (Mendez).)
              “A trial court must grant a petition to compel arbitration ‘if it determines
that an agreement to arbitrate the controversy exists.’ [Citations.] There is, however, ‘no
public policy in favor of forcing arbitration of issues the parties have not agreed to
arbitrate.’ [Citation.] Thus, in ruling on a motion to compel arbitration, the court must
first determine whether the parties actually agreed to arbitrate the dispute. [Citations.]
General principles of California contract law guide the court in making this
determination. [Citations.]” (Mendez, supra, 220 Cal.App.4th at p. 541.)
              “‘Ordinarily, we review a denial of a petition to compel arbitration for
abuse of discretion. [Citation.] However, where the trial court’s denial of a petition to
arbitrate presents a pure question of law, we review the order de novo. [Citation.]’
[Citations.]” (Mendez, supra, 220 Cal.App.4th at p. 541.) In this case, the trial court’s

                                             10
ruling did not hinge on the credibility of any extrinsic evidence and because Employer
did not dispute the assertions Rebolledo made in her declarations, the court’s ruling was
based on its legal interpretation of the arbitration agreements. Accordingly, our review is
de novo.
B. Legal Principles Regarding Interpretation of Arbitration Agreements
              “The right to arbitration depends upon contract; a petition to compel
arbitration is simply a suit in equity seeking specific performance of that contract.
[Citations.] There is no public policy favoring arbitration of disputes which the parties
have not agreed to arbitrate. [Citation.]” (Engineers Architects Assn. v. Community
Development Dept. (1994) 30 Cal. App. 4th 644, 653.) “‘Whether the parties formed a
valid agreement to arbitrate is determined under general California contract law.
[Citations.] Hence, when ruling on a petition to compel arbitration, the superior court
may consider evidence on factual issues such as contract formation bearing on the
threshold issue of arbitrability. [Citation.]’ [Citations.]” (Hotels Nevada v. L.A. Pacific
Center Inc. (2012) 203 Cal. App. 4th 336, 348.)
              “The basic goal of contract interpretation is to give effect to the parties’
mutual intent at the time of contracting. [Citations.] When a contract is reduced to
writing, the parties’ intention is determined from the writing alone, if possible.
(Civ. Code, § 1639.) ‘The words of a contract are to be understood in their ordinary and
popular sense.’ (Civ. Code, § 1644; see also Lloyd’s Underwriters v. Craig & Rush, Inc.
(1994) 26 Cal. App. 4th 1194, 1197-1198 [‘We interpret the intent and scope of the
agreement by focusing on the usual and ordinary meaning of the language used and the
circumstances under which the agreement was made’].)” (Founding Members of the
Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003)
109 Cal. App. 4th 944, 955.) “Finally, ambiguities in standard form contracts are to be
construed against the drafter. [Citations.] This court must apply [the above] basic
principles [of contract interpretation] to determine whether [Rebolledo’s] causes of action

                                             11
fall within the scope of the arbitration clause.” (Victoria v. Superior Court (1985)
40 Cal. 3d 734, 738 [arbitration has become “accepted and favored” method, “[h]owever,
judicial enthusiasm for alternative methods of dispute resolution must not in all contexts
override the rules governing the interpretation of contracts”].)
C. Within the Labor Commissioner’s Jurisdiction
              The court determined the 2001 and 2004 Agreements did not compel
arbitration of Rebolledo’s claims because both agreements “expressly exclude[d] ‘any
matter within the jurisdiction of the California Labor Commissioner.’” The court
determined this provision was broadly written to include any statutory wage claim not
actually filed with the Labor Commissioner, as long as the claim theoretically could have
fallen within the Labor Commissioner’s authority. The court reasoned the various
Labor Code violations raised in the case were of the type that could have been considered
by the Labor Commissioner, and therefore, were exempted from arbitration. Before
addressing Employer’s assertion the court was wrong, a brief summary of the Labor
Commissioner’s scope of authority and jurisdiction is instructive.
              “The California Labor Commission is part of the Department of Labor
Standards and Enforcement (DLSE), which is under the Department of Industrial
Relations. The DLSE enforces wage and labor standards and all labor laws not
specifically delegated to another agency (e.g., Fair Employment and Housing
Administration, Division of Occupational Safety and Health, or Division of Workers’
Compensation).” (Judith S. McIlwee, Circuit City Meets the California Labor
Commissioner: Does the FAA Preempt Administrative Claims? (2004) 40 Cal.W.L.Rev.
383, 396.)
              “[I]f an employer fails to pay wages in the amount, time, or manner
required by contract or statute, the employee may seek administrative relief by filing a
wage claim with the [Labor Commissioner] or, in the alternative, may seek judicial relief
by filing an ordinary civil action for breach of contract and/or for the wages prescribed by

                                             12
statute.” (Post v. Palo/Haklar & Associates (2000) 23 Cal. 4th 942, 946 (Post).) With
respect to the first alternative, the Labor Commissioner has broad authority to reject,
investigate, adjudicate, or litigate (on behalf of the employee), depending on the nature of
the employee’s claim. (See Lab. Code, §§ 96, 96.7, 98, 98.3, 1193.6.)1
              “[S]ection 98 includes remedial procedures for adjudicating wage claims,
enforced by the [DLSE] under the direction of the [C]ommissioner. It states that the
[C]ommissioner ‘shall have the authority to investigate employee complaints.’ (. . . § 98,
subd. (a).) The [C]ommissioner ‘may provide for a hearing in any action to recover
wages, penalties, and other demands for compensation.’ (Ibid.) [¶] . . . [¶] If the
[C]ommissioner decides to accept the matter and conduct an administrative hearing—
commonly known as a ‘Berman hearing’ after the name of its sponsor, then
Assemblyman Howard Berman—he or she must hold the hearing within 90 days . . . .”
(Post, supra, 23 Cal.4th at p. 946.) “The Berman hearing procedure is designed to
provide a speedy, informal, and affordable method of resolving wage claims. [Citation.]
[As explained by our Supreme Court,] ‘the purpose of the Berman hearing procedure is to
avoid recourse to costly and time-consuming judicial proceedings in all but the most
complex of wage claims.’ [Citation.]” (Id. at p. 947.)
              In addition to conducting a Berman hearing, the Labor Commissioner has
the option of filing a civil action. (§§ 98.3 & 1193.6 [action to recover unpaid wages].)
When the Labor Commissioner takes action to collect wages or benefits on behalf of a
worker, the Commissioner acts as a trustee of the monies collected and has an affirmative
duty to make a diligent search to locate any worker for whom unpaid wages or benefits
have been collected. (§ 96.7.)

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

                                             13
              The Legislature has also empowered the Labor Commissioner to enforce
the labor laws (including IWC Wage Orders), by (1) issuing subpoenas compelling
witness attendance and production of documents, (2) accepting assignment of wage and
other claims such as enforcement of workers’ compensation awards, mechanics’ liens,
etc., (3) collecting wages and benefits without the worker’s assignment, (4) seeking
injunctions against willful violations of state wage and hour laws. (See Chin et al., Cal.
Practice Guide: Employment Litigation (The Rutter Group 2013) ¶ 11:1342, p. 11-150 to
11-151.)
              Certain employment matters cannot be considered by the Labor
Commissioner. The Commissioner has the duty to determine if the employee’s claim
falls within his or her jurisdiction before proceeding forward. For example, section 98
authorizes the Labor Commissioner to only “prosecute” claims “properly before” the
Commissioner. It specifies the Labor Commissioner “shall determine all matters arising
under his or her jurisdiction.” (§ 98, subd. (a)). Some examples of employment matters
that do not fall within the jurisdiction of the Labor Commissioner are: (1) claims
involving bankruptcies or probate; (2) claims involving mechanics, loggers, or minors;
(3) preferred wage claims in assignment for the benefit of creditors; (4) discrimination
and retaliation complaints under sections 98.6, 132a, 432.2, 6310-6312; or (5) matters
where criminal or civil citations are issued such as for child labor law violations,
unlicensed contractors, payday violations, welfare benefits, etc. (See Chin et al., Cal.
Practice Guide: Employment Litigation, supra, ¶ 11:1351, p. 11-152.)
              That there are definite limits to the Labor Commissioner’s jurisdiction was
demonstrated in Noble v. Draper (2008) 160 Cal. App. 4th 1, 12-13 (Noble). In that case,
the court held the Labor Commissioner has no jurisdiction “to adjudicate tort claims
involving conduct that predated the employment relationship or unfair business practice
claims under the Business and Professions Code.” (Id. at p. 16.) The case involved
foreign restaurant workers who brought an action claiming defendant induced them to

                                             14
come to the United States and work in a restaurant but they were terminated and not
compensated for their work. (Id. at p. 6.) The workers first pursued claims for unpaid
wages before the Labor Commissioner. (Id. at p. 7.) Following the administrative
hearing, the workers filed a civil action alleging fraud, negligent misrepresentation, false
advertising, intentional infliction of emotional distress, and a statutory claim of unfair
business practices under the Business and Professions Code. Defendant argued that after
choosing an administrative forum, the workers’ claims were barred by res judicata.
(Ibid.) The court disagreed. It reasoned, “Administrative agencies have only such
powers as have been conferred on them, expressly or by implication, by Constitution or
statute. [Citation.] The Labor Code generally gives the [DLSE] (of which the Labor
Commissioner is the Chief) the authority to enforce the provisions of the Labor Code and
all state labor laws the enforcement of which is not specifically vested in any other
officer, board, or commission. (§§ 21, 79, 82, 95.) None of the claims at issue in this
appeal alleged violation of any provision of the Labor Code or other state labor laws.”
(Noble, supra, 160 Cal.App.4th at pp. 12-13.) The court concluded the civil action was
not precluded by the worker’s prior pursuit of wage claims before the Labor
Commissioner.
              In the case before us, the parties agree Rebolledo’s claims fall within the
Commissioner’s jurisdiction. Rebolledo alleged Employer failed to (1) provide meal
periods and rest periods “or wages in lieu thereof” in violation of sections 226.7 and 512;
(2) pay wages of terminated or resigned employees as required by sections 201 and 202;
and (3) comply with itemized wage statement provisions in violation of section 226 and
1174, subdivision (d). She alleged these violations entitled her to recover civil penalties
under the Private Attorneys General Act of 2004 (§§ 2698 et. seq).
              Section 95 provides the Labor Commissioner “may enforce the provisions
of [the Labor Code] and all labor laws of the state the enforcement of which is not
specifically vested in any other officer, board or commission.” Clearly Rebolledo sought

                                             15
enforcement of various Labor Code provisions and labor laws in her lawsuit. Her
statutory wage claims fall into the category of “matters governed by” and “matter[s]
within the jurisdiction” of the Labor Commissioner.
D. Statutory Wage Claims Expressly Excluded from the Arbitration Agreement
              Employer admits the 2001 and 2004 Agreements explicitly exclude certain
claims from the arbitration obligation. It asserts these exceptions do not apply in this
case and Rebolledo’s statutory wage claims must be arbitrated. We disagree.
              The sole issue presented in this appeal is simply a matter of contract
interpretation. We will begin by considering the 2001 Agreement. The parties generally
agreed to arbitrate all employment disputes but excluded several types of employee
claims from arbitration. The 2001 Agreement expressly exempted from arbitration the
following three broad categories: (1) workers’ compensation claims; (2) unemployment
insurance claims; and (3) “matters governed by the California Labor Commissioner[.]”
(Italics added.) With respect to the third category of claims, the 2001 Agreement also
defined them as including “any matter within the jurisdiction of the California Labor
Commissioner[.]” (Italics added.)
              On appeal, the parties offer different interpretations of the phrases “matters
governed by” and “matter[s] within the jurisdiction” of the Labor Commissioner. Both
sides assert the language is not ambiguous. As we will explain more fully below, we
conclude the language plainly stated Rebolledo’s statutory wage claims were exempted
from the arbitration agreement. The phrases at issue served to define the type of
exempted employment claims as including disputes an employee could have brought
before the Labor Commissioner. The parties intended for employment disputes falling
outside the scope of that definition to be arbitrated. We reject Employer’s strained
interpretation that the language served to exclude wage claims based on the forum
selected by the employee i.e., excluding wage claims actually brought before the Labor
Commissioner.

                                             16
              As explained earlier in this opinion, the scope of the Labor Commissioner’s
jurisdiction is limited by statute. (Noble, supra, 160 Cal.App.4th at pp. 12-13
[Commissioner has “only such powers as have been conferred” on him or her by
Constitution or statue].) By defining the type of excluded claims as being limited to
“matters governed by” or “within the jurisdiction” of the Commissioner, the parties
intended to exclude employment claims alleging violations of the Labor Code or other
state labor law. (§§ 21, 79, 82, 95.)
              We reject Employer’s assertion “within the jurisdiction” meant claims
actually filed with the Commissioner. When an employee’s claim falls “within the
jurisdiction” of the Commissioner, the employee has the option of filing the statutory
wage claim before the Commissioner or in superior court. (Post, supra, 23 Cal.4th at
p. 946.) The employee has two forums for bringing such claims. Moreover, parties can
agree to arbitrate statutory wage claims regardless of the chosen forum. (See AT & T
Mobility LLC v. Concepcion (2011) 563 U.S. 1740 (Concepcion); Sonic-Calabasas A,
Inc. v. Moreno (2013) 57 Cal. 4th 1109, 1124 (Sonic-Calabasas A, II).)2 Accordingly, the
ordinary meaning of the phrases at issue clearly relates to defining the nature of a claim,
not where it is adjudicated. Indeed, to adopt Employer’s interpretation we would have to
ignore the portion of the agreement defining the exempted claims as “matters governed”
by the Labor Commissioner because this terminology does not suggest a particular forum
of litigation, only a type of subject matter.

2              In its opening brief, Employer argued a Berman hearing is an unwaivable
right that an employee cannot be asked to relinquish in favor of arbitration. This is no
longer the law. The United States Supreme Court, pending its Concepcion opinion,
granted review and vacated our Supreme Court’s decision Sonic-Calabasas A. Inc. v.
Moreno (2011) 51 Cal. 4th 659 (Sonic-Calabasas A, I). In its reply brief, Employer
acknowledges our Supreme Court reconsidered Sonic-Calabasas A, I in light of the
Concepcion opinion. (Sonic-Calabasas A, II, supra, 57 Cal. 4th 1109.) An employee’s
right to seek a Berman hearing can be waived as a condition of employment. (Id. at
p. 1124.)

                                                17
              If Employer intended to exclude only statutory wage claims brought in one
forum over another it could have narrowly drafted and defined the phrases “matters
governed” and “matter[s] within the jurisdiction” to mean “claims actually filed with the
commissioner” or “claims being litigated in a Berman hearing.” Alternatively, Employer
could have clarified employee was agreeing to arbitrate “statutory wage claims not
brought before the Labor Commissioner.” However, without language qualifying or
limiting the forum for statutory wage claims, an employee would reasonably understand
the plain language of exclusion covered all statutory wage claims regardless of where
they were adjudicated. (Victoria, supra, 40 Cal.3d at p. 744 [we must “‘give effect to the
parties’ intentions, in light of the usual and ordinary meaning of the contractual language
and the circumstances under which the agreement was made’”].) We would have to
rewrite the agreement to expressly limit the exclusion to claims actually filed in a
particular forum. This we cannot do.
              Employer argues that because the Labor Commissioner never asserted
jurisdiction over Rebolledo’s wage claims she must arbitrate them. Employer provides
case authority describing the circumstances when the Labor Commissioner loses its
jurisdiction over a worker’s wage claim. These cases do not assist Employer. In Post,
supra, 23 Cal.4th at page 947, the Supreme Court held the timely filing of an appeal
terminates the Commissioner’s jurisdiction. Similarly, in Murphy v. Kenneth Cole
Productions, Inc. (2007) 40 Cal. 4th 1094, 1117, another case cited by Employer, our
Supreme Court verified the appeal of the Commissioner’s decision is a de novo trial of
the wage dispute. This case does not concern the appeal of a Labor Commissioner’s
award.
              Employer also maintains these cases prove the Labor Commissioner lost
jurisdiction of Rebolledo’s lawsuit because she filed her action in superior court. This
argument misses the point. The issue on appeal is not whether we should apply a “first in
time” approach to jurisdiction in this case. We need not decide whether the Labor

                                             18
Commissioner’s authority to investigate wage violations is trumped once a worker files a
lawsuit in superior court. In ruling on a motion to compel arbitration, we need only
determine whether the parties actually agreed to arbitrate this particular kind of dispute.
Accordingly, the dispositive issue is the clear and ordinary meaning of the phrases
“matters governed” and “matters within the jurisdiction.” A statutory wage claim
qualifies as a “matter governed” by the Labor Commissioner regardless of whether he or
she is actively adjudicating the case.
              Another argument raised by Employer is that the ordinary meaning of the
phrases at issue must be viewed in the context of the two other excluded administrative-
type claims. Specifically, the agreement expressly excluded workers’ compensation
claims and unemployment insurance claims from arbitration. Employer argues the
arbitration agreement did not need to define “the jurisdiction” of the administrative
agencies responsible for handling those two types of claims, i.e., the California Workers’
Compensation Appeals Board (WCAB) and the Employment Development
Department/Unemployment Insurance Appeals Board (EDD). It explained those entities
have “exclusive jurisdiction” over those types of claims but because the Labor
Commissioner does not have exclusive jurisdiction over wage claims, “the language of
the 2001 Agreement was necessary to clarify that only matters brought before the Labor
Commissioner are excluded from the agreement to arbitrate.”
              Nonsense. The only reason Employer did not need to define the scope of
excluded workers’ compensation claims is because all workers’ compensation claims
cannot be arbitrated as a matter of law. “The Workers’ Compensation Act (. . . § 3200
et seq.) generally provides the exclusive remedy for employee injuries incurred in the
course of employment. [Citation.] [¶] When the exclusive remedy rule applies (e.g.,
injured employee seeking damages for workplace injury), the employee cannot bring an
‘action at law.’ [Citation.] [¶] The rule also bars arbitration of such disputes.
[Citation.]” (Italics added.)

                                            19
(Knight et al. Cal. Practice Guide: Alternative Dispute Resolution (2013) § 5:76.27,
p. 5-64.6.) Thus, the Workers’ Compensation Act provides the exclusive remedy, and the
WCAB is the exclusive forum for resolution of any dispute over a right or liability
incidental to a claim for workers’ compensation benefits.
              Likewise, the parties could not have agreed to process unemployment
insurance claims in arbitration. The EDD has exclusive jurisdiction to investigate an
employee’s claim for unemployment benefits and make an eligibility determination.
(See American Federation of Labor v. Unemployment Ins. Appeals Bd. (1996) 13 Cal. 4th
1017, 1024 (American Federation) [discussing California’s unemployment insurance
program “designed to provide insurance for workers ‘unemployed through no fault of
their own, and to reduce involuntary unemployment and the suffering caused thereby to a
minimum’”]; Unemp. Ins. Code §§ 301, 1326 et seq.) An appeal of the EDD’s decision
is heard by an administrative law judge. (Unemp. Ins. Code §§ 1334, 1335, subd. (c).) A
claimant may appeal that decision to the Unemployment Insurance Appeals Board
(Unemp. Ins. Code § 1328), and if still not satisfied “may then seek a limited trial de
novo in the superior court in an administrative mandate proceeding.” (American
Federation, supra, 13 Cal.4th at p. 1026; Code Civ. Proc., § 1094.5.)
              The same is not true for statutory wage claims. The Labor Commissioner
does not have exclusive jurisdiction. Unlike other types of employment litigation (e.g.,
discrimination actions under the Fair Employment and Housing Act), there is no
requirement that an employee exhaust administrative remedies before filing suit. (See
Chin et al., Cal. Practice Guide: Employment Litigation, supra, ¶ 11:1441 at p. 11-160.)
Consequently, adding the phrase “within the jurisdiction” does not serve to clarify
Employer’s purported intent to permit its employees to request an administrative Berman
hearing but not litigate the very same wage claims in superior court. Whereas matters
within the jurisdiction of the WCAB must be administratively adjudicated, matters within

                                            20
the jurisdiction of the Labor Commissioner do not. Simply stated, a matter within the
jurisdiction need not be actually brought before the Labor Commissioner.
              Employer asserts that when the agreement was written it believed
employees could not waive their right to administrative Berman hearings as a condition
of employment. It recognizes this is no longer the law but asserts this was the reason
“within the jurisdiction” was included in the agreement. If this was Employer’s intention
the arbitration agreement was poorly drafted because the language used plainly exempted
all statutory wage claims regardless of the forum of litigation. “The strong policy in
favor of arbitration may not be used to permit a party to enforce provisions of an
arbitration agreement that, as here, either do not exist or were so poorly drafted that
another party cannot be presumed to have agreed to them. [Citations.]” (Thompson v.
Toll Dublin, LLC (2008) 165 Cal. App. 4th 1360, 1370.) As stated above, there were
many ways Employer could have clarified only statutory wage claims actually brought
before the Labor Commissioner would be exempted.
              Alternatively, Employer argues the court’s interpretation of the arbitration
agreement is erroneous because it contradicts other key portions of the 2001 Agreement.
Employer notes the parties expressly agreed to arbitrate discrimination and wrongful
termination claims, yet these types of claims could also qualify as Labor Code violations,
falling within the Labor Commissioner’s jurisdiction and exempted from arbitration.
Employer concludes, “It is impossible to reconcile these two clauses under the court’s
interpretation. Instead, the only consistent and sensible interpretation of the
2001 Agreement is to permit [Rebolledo] to seek administrative relief for claims actually
initiated to the Labor Commissioner, not excluding from the agreement any claim that
could be brought before the Labor Commissioner.”
              As aptly stated by Rebolledo, any inconsistency would be of Employer’s
own making as the drafter of the agreement and it is not a reason to stray from the usual
and ordinary meaning of the language stated in the agreement. More importantly, when

                                             21
there are conflicting clauses the more specific clause controls the more general.
Wrongful termination and discrimination claims do not just fall under the Labor Code.
These claims may also may be brought under the Fair Employment and Housing Act
(FEHA; Gov. Code, § 12940 et seq.) and are arbitrable. (Chin et al., Cal. Practice Guide:
Employment Litigation, supra, ¶ 18:515, pp. 18-63 to 18-64.) Federal statutory
discrimination claims (such as those made under Title VII, ADEA, ADA, FLSA,
USERRA, and whistleblower claims) are also subject to arbitration. (Chin et al., Cal.
Practice Guide: Employment Litigation, supra, ¶ 18:505-18:512, pp. 18-62 to 18-63.)
The parties could generally agree to arbitrate wrongful termination and discrimination
claims, and also specifically exempt from arbitration Labor Code violations.
              In any event, the dispute in this case does not relate to wrongful termination
or a discrimination claim. We found no provision in the arbitration agreement discussing
statutory wage claims other than the provision excluding such claim from the arbitration
obligation. There is no internal conflict with respect to waiver of the statutory wage
claims.
E. The 2005 Agreement
              The court determined the 2005 Agreement was unenforceable, stating,
“This document is a modification of the prior agreements because the language in the
[2005 Agreement] is changed. It, however, does not expressly supersede the 2001 and
2004 Agreements. [¶] Although [Rebolledo] signed the document there is no indication
that the document was translated for her or that she understood the terms of the
handbook. (Her declaration attached to the opposition indicates she does not speak or
understand English and did not understand the term ‘arbitration’.)” The court also stated,
“The 2001 . . . Agreement (which is never stated to be superseded) requires the signatures
of three executives of [Employer] to modify it and they are not on this document. [¶]
Although the employer can unilaterally modify an employment contract there must be
reasonable notice of their intent to do so and that is lacking here. [¶] This [2005

                                            22
Agreement] also is illusory in that it does not state or identify the rules of the arbitration
to be conducted which are material term[s] missing from the agreement.” Employer
argues the court was wrong.
              We begin by reviewing the context in which the 2005 Agreement was
executed in comparison with the prior two arbitration agreements. The 2001 Agreement,
unlike the 2005 Agreement, contained multiple paragraphs devoted to explaining the
arbitration obligation in addition to describing the employee’s other terms of
employment. The 2004 Agreement repeated the same arbitration obligation, albeit with
less detail, in a document also called an “employment contract.” In contrast, the
2005 Agreement was contained within a one-page handbook acknowledgement form.
There was no evidence, or any suggestion by either party, that arbitration terms were
discussed anywhere within the handbook itself. The parties did not include a copy of the
actual handbook, indicating it contained no information about arbitration. The
acknowledgement form contained a one paragraph summary of the arbitration obligation.
The acknowledgment was printed with the number “50” on the very bottom of the form,
suggesting it was part of a larger document. Also the bottom of the document contains
the statement, “Employee Copy: Remains in Employee Handbook.” We can infer the
acknowledgement form was likely attached to the end of the Employer’s handbook.
Indeed, Employer maintains the 2005 Agreement was “merely” providing a “one
paragraph summar[y] of the 2001 Agreement.” It does not suggest the
acknowledgment’s recitation of the arbitration obligation intended to be included as one
of the handbook’s policies.
              On appeal, Employer argues the 2001 Agreement was not modified. It
asserts the 2005 Agreement does not contain any material change from the
2001 arbitration terms. Employer contends the court had no legal authority upon which
to base its ruling that “a short summary” of an employer’s arbitration agreement
“constitutes a ‘modification’ of the original agreement.” It reasons neither the 2004 or

                                              23
2005 Agreements expressly supersede the 2001 Agreement, suggesting it was not
intended to alter the terms of the original obligation. We conclude this argument does not
help Employer. If the 2005 Agreement was simply intended to contain a shortened
summary of the 2001 Agreement, then it too encompasses the original exemption of
statutory wage claims. We have previously ruled the parties expressly agreed to exclude
statutory wage claims. The trial court properly denied the motion.
              In its reply brief, Employer took a different approach, arguing the
2005 Agreement would be enforceable even if it did modify the 2001 Agreement.
Employer maintains the agreement should not be struck down as unconscionable because
it is well established an employer can unilaterally modify an arbitration agreement as
long as the employees receive notice of the change. Employer notes the modification
satisfies the covenant of good faith and fair dealing because the 2005 Agreement would
not apply to unfiled statutory wage claims accruing before 2005. We need not consider
the merit of this argument because the original agreement could not be modified without
the signatures of three of Employer’s executives.
              As stated above, the 2001 Agreement expressly exempted statutory wage
claims from the arbitration obligation. The 2005 Agreement does not contain this same
express exemption. We agree with the trial court’s conclusion that for such a material
modification to be enforceable, it required the signature of three executives.
              The 2001 Agreement addressed several different employment issues as
follows: (1) employment was at-will; (2) employees must follow terms of the employee
handbook; (3) any disputes must be first mediated; and (4) after mediation, disputes must
be arbitrated. With respect to the first issue, the 2001 Agreement expressly provided the
employee’s employment was at will, which meant the employee could be terminated at
any time, with or without cause.
              The next paragraph of the 2001 Agreement cautioned: “Employee’s [a]t-
[w]ill status is the entire agreement between Employee and [Employer]. It supersedes all

                                             24
prior agreements, understandings and representations concerning Employee’s
employment with [Employer]. Only the President, Senior Vice President and Director of
Human Resources, acting together, may enter into a different employment agreement or
modify [Employer’s] employment policies. All three (3) signatures must be obtained.”
(Italics added.)
                Employer argues the italicized portion of the above provision simply meant
signatures were required in the event an employee’s “at will” status was changed. Not
so. The agreement plainly requires signatures to change the employee’s status or
“modify employment policies.” The word “or” is a conjunction commonly used to
connect clauses representing alternatives. If Employer intended to require signatures
only to change an employee’s status, there would be no need to include the phrase “or
modify employment policies.” The signature requirement is broadly written to
encompass much more than a status change. A contract is to be read as a whole, “so as to
give effect to every part, if reasonably practicable, each clause helping to interpret the
other.” (Civ. Code, § 1641.) Moreover, it is well settled contracts “are construed to
avoid rendering terms surplusage. [Citations.]” (ACL Technologies, Inc. v. Northbrook
Property & Casualty Ins. Co. (1993) 17 Cal. App. 4th 1773, 1785.)
                We recognize the 2001 Agreement does not define what “employment
policies” require the three executive signatures. We can infer from other provisions in
the contract that signatures were not required to modify the policies outlined in the
employee handbook, hours, wages, or working conditions. The agreement specified,
“[Employer] may change any and all policies or practices” in the handbook “at any time.”
In addition, it gave Employer the right to change “hours, wages and working conditions
at any time.”
                The 2001 Agreement describes in great detail the employment policy
requiring the mediation and arbitration of disputes. Unlike the other employment policy
provisions, there is no provision granting the Employer a similar unilateral modification

                                             25
right to modify the arbitration terms. We agree with the trial court’s interpretation of the
agreement holding arbitration would fall within the broad category of “employment
policies” requiring the signature of three executives for any modification. And because
the 2005 Agreement contains a material modification of the types of claims that must be
arbitrated, it required the signature of three executives to be enforceable.3
                                             III
              The order is affirmed. Respondent shall recover her costs on appeal.

                                                   O’LEARY, P. J.

WE CONCUR:

IKOLA, J.

THOMPSON, J.

3             Based on our ruling the wage claims were expressly exempted from
arbitration obligation, and our conclusion the 2005 Agreement was an unenforceable
modification of the original arbitration agreement, we need not address Employer’s
argument the trial court also erred by concluding the agreements were unenforceable due
to unconscionability concerns. Because we can affirm the court’s order for the two
reasons discussed in this opinion, we need not say more.

                                             26