Court Opinion

ID: 3213709
Source: CourtListenerOpinion
Date Created: 2016-06-15 23:02:41.499949+00
Date Added: 2024-06-11T12:39:51.590329
License: Public Domain

Filed 6/15/16 Licon v. Wish-I-Ah Skilled Nursing & Wellness Cntr CA5

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                       FIFTH APPELLATE DISTRICT

KATHY LICON et al.,
                                                                                           F070304
         Plaintiffs and Respondents,
                                                                           (Super. Ct. No. 13CECG03983)
                   v.

WISH-I-AH SKILLED NURSING &                                                              OPINION
WELLNESS CENTRE LLC,

         Defendant and Appellant.

         APPEAL from an order of the Superior Court of Fresno County. Mark W.
Snauffer, Judge.
         Ballard Rosenberg Golper & Savitt, John B. Golper and Jeffrey P. Fuchsman for
Defendant and Appellant.
         Sutton Hague Law Corporation, S. Brett Sutton, Jared Hague, Joseph V. Macias
and Wesley Carlson for Plaintiffs and Respondents.
                                                        -ooOoo-
         Defendant appeals from the denial of its petition to compel arbitration of
plaintiffs’ claims against it. We conclude the arbitration agreement excluded class and
collective actions from its scope, so plaintiffs were not required to arbitrate the class
claims or the private attorney general claims included in their first amended complaint.
                    FACTUAL AND PROCEDURAL BACKGROUND
       Plaintiff, Kathy Licon,1 filed an action on behalf of herself and all others similarly
situated, alleging causes of action for wage and hour violations against her employer.
Plaintiffs filed a first amended complaint, adding Denise as a named plaintiff and adding
causes of action alleged by her as a private attorney general, seeking penalties for Labor
Code violations on behalf of herself and other employees of defendant. Defendant
responded with a petition to compel arbitration of the disputes. It presented evidence
plaintiffs had signed various documents agreeing to be bound by defendant’s arbitration
program or acknowledging receipt of the booklet that described it and contained its
provisions. Plaintiffs opposed the petition, asserting none of the documents presented by
defendant constituted an agreement to arbitrate their employment disputes; alternatively,
if such an agreement existed, the provisions of the arbitration program were
unconscionable and should not be enforced, and the arbitration agreement excluded or
did not apply to the class claims or the private attorney general claims.
       The trial court denied the petition, finding the arbitration agreement expressly
excluded class and collective actions. Further, the agreement submitted by defendant was
unconscionable, and the unconscionable provisions should not be severed. Defendant
appeals from the denial of its petition to compel arbitration.

1       For clarity and convenience, we will refer to plaintiffs by their first names because they
share a last name. No disrespect is intended.
        We note that, in defendant’s papers here and in the trial court, Kathy is referred to as
Johnnie. Plaintiffs, in their respondents’ brief, note that Kathy goes by the name Johnnie. There
is no dispute Kathy signed the documents that bear the signature “Johnnie Licon.”

                                                 2.
                                         DISCUSSION
I.     Appealability and Standard of Review
       An order denying a petition to compel arbitration is appealable pursuant to Code
of Civil Procedure section 1294, subdivision (a).2
       “On petition of a party to an arbitration agreement alleging the existence of a
written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate
such controversy, the court shall order the petitioner and the respondent to arbitrate the
controversy if it determines that an agreement to arbitrate the controversy exists, unless it
determines that … [g]rounds exist for the revocation of the agreement.” (§ 1281.2.) The
party seeking arbitration bears the burden of proving by a preponderance of the evidence
the existence of an arbitration agreement; the party opposing arbitration bears the burden
of proving by a preponderance of the evidence any defense to enforcement of the
agreement. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC
(2012) 55 Cal. 4th 223, 236 (Pinnacle); Engalla v. Permanente Medical Group, Inc.
(1997) 15 Cal. 4th 951, 972.)
       “There is no uniform standard of review for evaluating an order denying a motion
to compel arbitration.” (Robertson v. Health Net of California, Inc. (2005) 132
Cal. App. 4th 1419, 1425.) When the facts are undisputed, the existence and
enforceability of an agreement to arbitrate are questions of law subject to de novo review.
(Sparks v. Vista Del Mar Child & Family Services (2012) 207 Cal. App. 4th 1511, 1519
(Sparks); Dotson v. Amgen, Inc. (2010) 181 Cal. App. 4th 975, 979.) When the evidence
is conflicting, we accept the trial court’s resolution of factual issues if it is supported by
substantial evidence. (Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal. App. 4th 1267,

2       All further statutory references are to the Code of Civil Procedure unless otherwise
indicated.

                                                3.
1277 (Nyulassy).) Plaintiffs presented no conflicting evidence; therefore, our review of
the existence and validity of the arbitration agreement is de novo.
II.    Agreement to Arbitrate
       The trial court impliedly found both Kathy and Denise entered into an arbitration
agreement with defendant. The undisputed facts support that finding.
       In Cruise v. Kroger Co. (2015) 233 Cal. App. 4th 390 (Cruise), the plaintiff signed
an application for employment with the defendant, in which she stated she understood
and agreed that the defendant’s binding arbitration policy was incorporated by reference
into the application and that the policy applied to any employment related disputes
between the parties. (Id. at pp. 392–393.) In the application, the plaintiff also
acknowledged receipt of a copy of the policy. There was evidence, however, that the
arbitration policy was not provided to the plaintiff at the time she applied for
employment. (Id. at p. 393.)
       After her employment was terminated, the plaintiff sued the defendants, and the
defendants moved to compel arbitration. (Cruise, supra, 233 Cal.App.4th at p. 394.)
They presented the signed employment application and a four-page arbitration policy
they contended was the policy referred to in the application. The trial court denied the
motion, concluding the four-page document submitted consisted of pages from the
employee handbook; the document was undated and there was no evidence it existed in
2007 when the plaintiff applied for employment. There also was no evidence the
document was ever given to the plaintiff, and the plaintiff denied ever receiving the
employee handbook. (Id. at p. 395.)
       On appeal the court found the undisputed evidence of the language of the
employment application established an agreement to arbitrate employment disputes.
(Cruise, supra, 233 Cal.App.4th at p. 396.) The defendants’ inability to establish the
contents of the arbitration policy in effect in 2007 did not relieve the plaintiff of the
obligation to arbitrate. Its only impact was that the defendants failed to demonstrate the

                                              4.
parties agreed to arbitrate by procedures different from those set out in the California
Arbitration Act (§ 1280 et seq.; CAA). (Cruise, at p. 399.) “The language of the
arbitration clause in the instant employment application, standing alone, was sufficient to
establish the existence of an agreement by the parties to arbitrate employment-related
disputes. While the parties’ agreement to arbitrate is enforceable, the employer’s
inability to establish the contents of its Arbitration Policy precludes the employer from
enforcing the provisions of said policy. Instead, the arbitration proceeding is to be
conducted in accordance with the procedures set forth in the CAA as well as applicable
case law.” (Id. at p. 400.)
       In Craig v. Brown & Root, Inc. (2000) 84 Cal. App. 4th 416 (Craig), several years
after the plaintiff’s employment began, her employer established a four-step dispute
resolution program to resolve all employee disputes. (Id. at pp. 418–419.) Twice the
employer mailed to the plaintiff’s home address a brochure explaining the program and
emphasizing it would apply to her and to any future legal disputes she had with the
company relating to her employment. (Id. at pp. 419, 420.) When the company
terminated the plaintiff’s employment, she sued. The company moved to compel
arbitration. (Id. at pp. 419–420.) The plaintiff denied receiving the mailed brochures and
asserted she had not agreed to arbitrate her claims. (Id. at p. 420.) The trial court granted
the motion to compel arbitration and the appellate court affirmed.
       “General principles of contract law determine whether the parties have entered a
binding agreement to arbitrate. [Citation.] This means that a party’s acceptance of an
agreement to arbitrate may be express [citations] or implied-in-fact where … the
employee’s continued employment constitutes her acceptance of an agreement proposed
by her employer.” (Craig, supra, 84 Cal.App.4th at p. 420.) The court concluded
substantial evidence supported the trial court’s resolution of the conflicting evidence in
the company’s favor: “there [was] substantial evidence (1) that the memorandum and
brochure were received by Craig in 1993 and again in 1994; (2) that she continued to

                                             5.
work for Brown & Root until 1997; and (3) that she thereby agreed to be bound by the
terms of the Dispute Resolution Program, including its provision for binding arbitration.”
(Id. at p. 422.)
       A.      Denise
       Denise signed a single-page document entitled “Employment Dispute Resolution
Program Agreement.” The first paragraph of the agreement, enclosed by a box, stated
that defendant’s employment dispute resolution (EDR) program provides a four-step
process for resolving employment problems, which ensures a fair resolution to disputes
and is often faster and less expensive. It stated: “If you wish to be considered for
employment, you must read and sign the following agreement binding you to use the
EDR Program to resolve disputes. An EDR Program booklet describing the program in
detail is available where you obtained the Applicant Packet.” The second paragraph
provides that “both the Company and I agree to resolve all claims, controversies or
disputes relating to my application for employment, my employment and/or the
termination of my employment with the Company exclusively through the Company’s
Employment Dispute Resolution Program.” The third paragraph recognizes the last step
in the process is final and binding arbitration before a neutral arbitrator, and
acknowledges agreement that “the Company and I are bound to use the EDR Program as
the only means of resolving employment related disputes and to forego any right either
may have to a jury trial.” The final two paragraphs of the agreement state: “I understand
that the EDR Program affects my legal rights. I also understand that I may obtain a copy
of the EDR Program booklet and seek legal advice before signing this Agreement. [¶] I
certify that I have read this Agreement, I have had an opportunity to ask questions
regarding its content, I understand this Agreement, I believe it to be fair, and I voluntarily
enter into this Agreement.” Denise did not dispute she signed this agreement; it is dated
October 17, 2009.

                                              6.
       Denise also did not dispute that she signed a one-page document entitled
“Employment Dispute Resolution Program Acknowledgment,” which bears her signature
and is dated November 4, 2009, the first day of her employment. This document
acknowledges that Denise received a copy of the EDR Program booklet. It also states: “I
realize it is my responsibility to familiarize myself with its contents.”
       Like the language in the employment application in Cruise, the EDR program
agreement Denise signed constituted an agreement to arbitrate. Plaintiffs argue Denise
was not bound to arbitrate because she did not receive the EDR program booklet until
after she signed the EDR program agreement. But the EDR program agreement, standing
alone, was sufficient to bind Denise to arbitrate her employment disputes with defendant,
even if it did not establish the rules by which the arbitration would be governed.
       Plaintiffs do not dispute that, after she signed the EDR program agreement, Denise
acknowledged receiving a copy of the EDR program booklet. This booklet bears the date
March 1, 2007, and defendant’s supporting declaration states it was still being given to
new employees in 2011. The booklet explains the four-step dispute resolution process in
detail, makes the rules of the American Arbitration Association (AAA) applicable to
arbitration, and describes various rules that apply to the arbitration proceeding. It ends
with an EDR program acknowledgement that is identical to the one signed by Denise.
       The undisputed evidence indicates Denise signed the EDR program agreement in
which she agreed to resolve all disputes with her employer through its dispute resolution
program, the fourth step of which was binding arbitration. Thus, she was bound to
submit all employment related disputes to binding arbitration. Subsequently, she
received a copy of the 2007 EDR program booklet, explaining the program and the four-
step process of dispute resolution. After receipt of the booklet, she continued her
employment with defendant for more than three years. As in Craig, she was given notice
of the terms of the EDR program through the booklet, she continued to work for
defendant, and she thereby impliedly agreed to be bound by the terms of the EDR

                                              7.
program, including binding arbitration pursuant to the rules set out in the 2007 EDR
program booklet. Thus, the undisputed evidence indicates Denise agreed, expressly and
impliedly, to binding arbitration of her employment related disputes with defendant.
       B.     Kathy
       The undisputed evidence shows Kathy began working for defendant in 1979. She
signed an EDR program acknowledgement dated May 27, 2009. By this document, she
acknowledged receipt of a copy of the 2007 EDR program booklet and her responsibility
to familiarize herself with its contents. Although the signed acknowledgement does not
contain information about the arbitration program or an express agreement to arbitrate
disputes, and therefore is not itself an enforceable express agreement to arbitrate, it is
evidence that defendant provided Kathy with notice of the program and its terms. The
program booklet notified defendant’s employees that “[y]our decision to apply, accept
employment or to continue employment with the Company constitutes your agreement to
be bound by the EDR Program.” It stated the company also agreed to be bound by the
program, and this mutual agreement meant both parties were “bound to use the EDR
Program as the only means of resolving employment related disputes.” After
acknowledging receipt of the booklet, Kathy remained employed with defendant for more
than two years. Thus, as in Craig, Kathy was given notice of the EDR program and its
terms, she continued to work for defendant thereafter, and she impliedly agreed to be
bound by the terms of the EDR program as reflected in the booklet.
       The undisputed evidence establishes an agreement to arbitrate between defendant
and both plaintiffs. All of the claims alleged by Kathy and Denise in their first amended
complaint allegedly arose on or after December 31, 2009. Thus, they arose after both
plaintiffs signed the documents which establish their express or implied agreement to
binding arbitration of all employment disputes with defendant.

                                              8.
III.   Exclusion of Class or Collective Actions
       The 2007 EDR program book contained the following provision: “This mutual
agreement to arbitrate claims means that both you and the Company are bound to use the
EDR Program as the only means of resolving employment related disputes and to forego
any right to a jury trial on issues covered by the EDR Program.… This Program covers
only claims by individuals and does not cover class or collective actions.” (Italics
added.) Applying a plain meaning interpretation, plaintiffs contend the words “covers”
and “does not cover” mean class and collective actions are outside the scope of the
arbitration agreement, and therefore those claims may be brought in a court action.
Defendant contends the language “This Program covers only claims by individuals and
does not cover class or collective actions” constitutes a class action waiver; thus, the
arbitration agreement requires employees to arbitrate all their claims against defendant,
but the class action waiver requires them to do so on an individual, non-class basis. The
trial court agreed with plaintiffs, interpreting the same sentence to mean “that class and
collective claims are not covered by the arbitration clause.” Accordingly, the claims
were not required to be arbitrated and there was nothing to prevent plaintiffs from
pursuing their class or collective claims in a court action.
       General rules of contract interpretation apply. The fundamental goal of
contractual interpretation is to give effect to the mutual intention of the parties as it
existed at the time of contracting. (Bank of the West v. Superior Court (1992) 2 Cal. 4th
1254, 1264; Civ. Code, § 1636.) “Such intent is to be inferred, if possible, solely from
the written provisions of the contract. [Citation.] The ‘clear and explicit’ meaning of
these provisions, interpreted in their ‘ordinary and popular sense,’ unless ‘used by the
parties in a technical sense or a special meaning is given to them by usage’ [citation],
controls judicial interpretation.” (AIU Ins. Co. v. Superior Court (1990) 51 Cal. 3d 807,
821–822.) The ordinary sense of a word may be found in its dictionary definition.
(Stamm Theatres, Inc. v. Hartford Casualty Ins. Co. (2001) 93 Cal. App. 4th 531, 539.)

                                               9.
       “Cover,” as used in this context, is defined as “to have width or scope enough to
include or embrace” or “to comprise, include, or embrace in an effective scope of
treatment or operation.” (Webster’s 3d New Internat. Dict. (1993) p. 524.) In short, to
“cover” means to include within its scope. It follows that the phrase “does not cover”
means excludes from its scope. Thus, the plain meaning of the provision that “[t]his
Program covers only claims by individuals and does not cover class or collective actions”
is that class and collective claims are excluded from the scope of the EDR program and
its arbitration procedures. Further, the provision that the parties agreed “to use the EDR
Program as the only means of resolving employment related disputes and to forego any
right to a jury trial on issues covered by the EDR Program” indicates the parties did not
intend to use the EDR program or to forego their right to a jury trial on matters not
covered by the EDR program, such as class and collective claims. Accordingly, by
agreeing to be bound by the provisions set out in the EDR book, plaintiffs did not agree
to either bring class claims in arbitration or waive their right to bring class and collective
claims in court.
       This interpretation of the term “covered” is consistent with the use of that term in
the paragraphs of the EDR book under the heading “Covered Disputes.” Those
paragraphs provide:

              “Disputes covered under the EDR Program pertain to claims such as
       discipline, discrimination, fair treatment, harassment, termination and other
       legally protected rights.

              “Disputes not covered under the EDR Program relate to workers’
       compensation…, unemployment benefits, health, welfare and retirement
       benefits and claims by the Company for injunctive relief to protect trade
       secrets and confidential information.

               “You retain the right to pursue employment disputes before federal
       or state administrative agencies. Nothing in the EDR Program prevents you
       from filing a claim with a federal or state administrative agency or from
       cooperating in a federal or state agency investigation.”

                                             10.
       Again, the term “not covered” is used to mean the claims are excluded from the
obligation to resolve them through the EDR program and its arbitration procedures. The
disputes “not covered” include claims required to be adjudicated administratively and
claims for injunctive relief the employer presumably reserved for litigation in court. The
exclusion of these claims from the coverage of the arbitration agreement, like the
exclusion of class claims, does not mean the employee waives the right to bring them in
any forum.
       Defendant suggests other language in the EDR program booklet demonstrates an
intent to arbitrate all claims on an individual, nonclass basis: language that the EDR
program applied to all disputes “concerning legally protected rights,” and “all claims,
controversies or disputes” between the parties, as well as language referring to the
employee and the employee’s claims in terms of “I,” “me,” “my,” and “you” (such as:
“differences may arise between the Company and me,” “both the Company and I agree,”
and “an attorney may represent you”), which defendant contends contemplate only
individual claims. Defendant’s argument seems to be that, because plaintiffs agreed to
arbitrate all of their claims against defendant except class claims, they agreed to arbitrate
all of their claims on an individual basis and thereby waived their right to bring class
claims in any forum. When considered along with the provisions discussed above,
however, the cited language is consistent with the interpretation excluding class claims
from the scope of the arbitration agreement. All claims, controversies, or disputes must
be arbitrated, except those not covered by the EDR program. Those not covered,
including class claims, would be litigated in another forum. As a result, only individual
claims would be arbitrated.
       When the parties’ construction of contractual language is conflicting, extrinsic
evidence is admissible to interpret the language of the agreement, as long as the evidence
is not used to give the agreement a meaning to which it is not reasonably susceptible.
(Morey v. Vannucci (1998) 64 Cal. App. 4th 904, 912.) When the extrinsic evidence is not

                                             11.
conflicting, resolution of the ambiguity is a question of law, subject to independent
review. (Winet v. Price (1992) 4 Cal. App. 4th 1159, 1166.) The extrinsic evidence
considered in this case was not in conflict.
       The extrinsic evidence considered by the trial court consisted of the historical
development of the law addressing the enforceability of class action waivers in arbitration
agreements, the place of the 2007 EDR program in that chronology and the subsequent
arbitration agreement defendant implemented after the law changed (defendant’s
Alternative Dispute Resolution Policy (ADRP) and the employee agreement to be bound
by it). Defendant challenges consideration of the ADRP agreement to interpret the 2007
EDR program language.3 Defendant asserts consideration of the subsequent agreement is
contrary to Evidence Code section 1151. That statute, however, makes evidence of
subsequent remedial measures “inadmissible to prove negligence or culpable conduct.”
(Evid. Code, § 1151.) The ADRP agreement was not used here as evidence of negligence
or culpable conduct, but to interpret the meaning of contractual language. Thus,
defendant’s challenge is without merit.
       Defendant also asserts the revised arbitration agreement does not shed any light on
what the 2007 EDR program was intended to cover. In the context of the historical
development of the law, however, it does.
       Discover Bank v. Superior Court (2005) 36 Cal. 4th 148, addressed the validity of
a class arbitration waiver. The agreement between the bank and its credit cardholders
provided that, if either party elected to resolve a dispute between them by arbitration,
neither party would have the right to litigate the claim in court or have a jury trial on the
claim; additionally, neither party was allowed to consolidate claims by or against other
cardholders or to arbitrate any claim as a representative or member of a class or in a

3     We note it was defendant who placed in evidence its ADRP, an unsigned employee
agreement to be bound by the ADRP, and its 2013 employee handbook, which refers to the
ADRP.

                                               12.
private attorney general capacity. (Id. at pp. 153–154.) The court concluded that, at least
in some circumstances involving small consumer claims, “the law in California is that
class action waivers in consumer contracts of adhesion are unenforceable, whether the
consumer is being asked to waive the right to class action litigation or the right to
classwide arbitration.” (Id. at p. 153.) The court based its conclusion on a determination
that, under the circumstances there, the class arbitration waiver was unconscionable. (Id.
at pp. 158–163.)
       After Discover Bank, parties drafting arbitration agreements had to be concerned
with the possibility a court would invalidate a class action or class arbitration waiver. If
the court invalidated such a waiver in a contract with an otherwise valid arbitration
agreement requiring that the parties arbitrate all disputes between them, the drafting party
faced the prospect of being required to arbitrate disputes on a class basis. If the drafting
party deemed that to be a less desirable result than litigating class claims in court,4 then a
provision like the one in defendant’s EDR program booklet carved out class claims and
excluded them from arbitration, allowing them to be litigated in court.
       Subsequently, in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333
(Concepcion), the United States Supreme Court determined the Discover Bank rule was
preempted by the Federal Arbitration Act (9 U.S.C. § 1 et seq.; FAA). (Concepcion,
supra, at p. 352.) It concluded the principal purpose of the FAA was to ensure private
arbitration agreements are enforced according to their terms, and “class arbitration, to the
extent it is manufactured by Discover Bank rather than consensual, is inconsistent with
the FAA.” (Id. at p. 344.) Following Concepcion, the California Supreme Court held
that the FAA also preempted a California case that held class action waivers in

4       A court action would apply formal rules of evidence, provide for a jury trial, and allow
appeal on the merits after judgment, all of which might be more important to a defendant when a
large class claim is in issue, rather than a relatively small individual claim.

                                              13.
employment arbitration agreements were invalid under certain circumstances. (Iskanian
v. CLS Transportation Los Angeles (2014) 59 Cal. 4th 348, 361, 366 (Iskanian).)
       The effect of the Concepcion decision generally was to make class action or class
arbitration waivers enforceable, in the absence of rules of general contract law that would
invalidate them. In the wake of the Concepcion decision, defendant replaced its EDR
program book with its ADRP and an employee agreement to be bound by that policy. 5
At the time of defendant’s motion to compel arbitration, both the ADRP and the ADRP
agreement provided: “I understand and agree this ADR Program prohibits me from
joining or participating in a class action or representative action, acting as a private
attorney general or representative of others, or otherwise consolidating a covered claim
with the claims of others.” Thus, the current language clearly prohibits employees from
bringing or participating in class and representative actions, rather than carving class
claims out as matters not covered by the arbitration agreement.
       The contrast between the 2007 EDR program provisions and the subsequent
ADRP agreement provisions, in the context of the development of the law governing
validity of class action waivers, supports the interpretation of the 2007 provisions as
excluding class actions from the arbitration requirement, rather than waiving the right to
pursue class claims in any forum. Accordingly, we conclude the trial court correctly
interpreted the language of the 2007 EDR program booklet as excluding plaintiffs’ class
claims from the scope of the arbitration agreement.
IV.    Private Attorneys General Act Claims
       In the first amended complaint, Denise alleged claims under the Labor Code
Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). The 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

5      There was no evidence either plaintiff signed an ADRP agreement.

                                              14.
and fellow employees, with most of the proceeds of that litigation going to the state.”
(Iskanian, supra, 59 Cal.4th at p. 360.) Like plaintiffs’ class action claims, Denise’s
PAGA allegations present collective claims, brought on behalf of herself “and other
current or former employees” (Lab. Code, § 2699, subd. (a)), that are excluded from the
parties’ arbitration agreement by the provision that “[t]his Program … does not cover
class or collective actions.”
       Additionally, in Iskanian, the court concluded an employee’s right to bring a
PAGA action is unwaivable. (Iskanian, supra, 59 Cal.4th at p. 383.) It further concluded
the FAA “does not preclude our Legislature from deputizing employees to prosecute
Labor Code violations on the state’s behalf. Therefore, the FAA does not preempt a state
law that prohibits waiver of PAGA representative actions in an employment contract.”
(Id. at p. 360.)
       Defendant contends that, to the extent Iskanian invalidates waivers of PAGA
claims in arbitration agreements, it violates the FAA’s preemption of state laws that
outright prohibit arbitration of a particular type of claim, as was explained in Concepcion.
(See Concepcion, supra, 563 U.S. at p. 334.) We are bound by the decisions of the
California Supreme Court and must follow Iskanian. (Auto Equity Sales, Inc. v. Superior
Court (1962) 57 Cal. 2d 450, 455.)
       The EDR program agreement excluded class and collective actions from its scope,
so Denise was not obligated to arbitrate her PAGA claims. Additionally, Denise’s right
to bring a PAGA action against her employer was unwaivable, according to Iskanian.
For both these reasons, we conclude Denise cannot be compelled to arbitrate her PAGA
claims against defendant.

                                            15.
                                         DISPOSITION
       The order denying defendant’s motion to compel arbitration is affirmed. Plaintiffs
are entitled to their costs on appeal.

                                                               _____________________
                                                                            HILL, P.J.
WE CONCUR:

 _____________________
KANE, J.

 _____________________
FRANSON, J.

                                           16.