Collie v. The Icee Co.

Summary

The California Court of Appeal affirmed the denial of The Icee Company’s motion to compel arbitration of a former employee’s Private Attorneys General Act (PAGA) action. The court held that a predispute arbitration agreement between the employee and employer could not bind the state, the real party in interest in a PAGA action, and that Epic Systems Corp. v. Lewis did not undermine this conclusion.

Holdings

1. An employee cannot be compelled to arbitrate a PAGA cause of action on the basis of a predispute arbitration agreement because the state is the real party in interest and was not a party to the agreement.
2. Epic Systems Corp. v. Lewis does not undermine Iskanian or Betancourt because Epic did not address the unique nature of PAGA claims or the state's status as the real party in interest.
3. A PAGA claim seeking unpaid wages under Labor Code section 558 cannot be compelled to arbitration because PAGA does not authorize employees to recover those unpaid wages and an impermissible request for relief cannot be compelled to arbitration.

Questions Presented

1. Whether a former employee may be compelled under a predispute arbitration agreement to arbitrate a representative PAGA cause of action, including one characterized as an individual claim.
2. Whether Epic Systems Corp. v. Lewis undermined Iskanian and related California authority holding that a predispute arbitration agreement cannot bind the state in a PAGA action.
3. Whether a PAGA claim seeking unpaid wages under Labor Code section 558 may be compelled to arbitration.

Disposition

affirmed