Villalobos v. Maersk, Inc.

Summary

The California Court of Appeal affirmed an order partially granting and partially denying defendants’ motion to compel arbitration in a wage-and-hour and PAGA action brought by a temporary staffing employee. The court held that incorporating AAA arbitration rules, without expressly stating that the arbitrator would decide arbitrability, did not provide clear and unmistakable evidence of delegation in the employment context. It also upheld rulings that certain minimum-wage-related waiting-time penalties and the PAGA claim were not arbitrable under California law.

Holdings

1. In the context of a mandatory employment arbitration agreement between an employer and an hourly worker, incorporation of an arbitration provider's rules, without expressly specifying in the parties' agreement that those rules authorize the arbitrator to decide the existence, scope, or validity of the arbitration agreement, is not clear and unmistakable evidence that the parties delegated arbitrability to the arbitrator.
2. Labor Code section 229 shields a section 203 waiting-time-penalties claim from arbitration to the extent the claim is based on the employer's failure to pay minimum wages.
3. When the Federal Arbitration Act does not apply and California law governs, no part of a PAGA claim is arbitrable under a predispute arbitration agreement absent the state's consent; a representative PAGA claim cannot be split into an arbitrable individual claim and a nonarbitrable representative claim.

Questions Presented

1. Whether incorporation of the AAA arbitration rules, without an express delegation provision in the arbitration agreement or arbitration policy, clearly and unmistakably delegated arbitrability questions to the arbitrator.
2. Whether Villalobos's waiting-time-penalties claim under Labor Code section 203 was nonarbitrable under Labor Code section 229 to the extent it was based on allegedly unpaid minimum wages.
3. Whether any portion of Villalobos's PAGA claim was arbitrable when the Federal Arbitration Act did not apply.

Disposition

affirmed