Opinion
G044641 Super. Ct. No. 30-2010-00379770
11-02-2011
CHRIS HOLSTED et al., Plaintiffs and Respondents, v. R.J. NOBLE COMPANY et al., Defendants and Appellants.
Atkinson, Andelson, Loya, Ruud & Romo, Steven D. Atkinson, Robert R. Roginson and Barbara S. Van Ligten for Defendants and Appellants. Shanberg Stafford, Ross E. Shanberg and Shane C. Stafford for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
Appeal from an order of the Superior Court of Orange County, Robert J. Moss, Judge. Affirmed.
Atkinson, Andelson, Loya, Ruud & Romo, Steven D. Atkinson, Robert R. Roginson and Barbara S. Van Ligten for Defendants and Appellants.
Shanberg Stafford, Ross E. Shanberg and Shane C. Stafford for Plaintiffs and Respondents.
Plaintiffs Chris Holsted, Heliodoro Espinoza, Blanca Araujo, and Ryan Bradley were employed as truck drivers by defendants R.J. Noble Company and Strength Transportation Management, Inc. Strength was a party to collective bargaining agreements containing arbitration provisions. Plaintiffs sued defendants for various alleged wage and hour violations, most of them arising out of Labor Code claims. The court denied defendants' motion to compel arbitration, finding Noble was not a party to the agreements and that the union could not waive plaintiffs' rights to file suit on their claims.
Defendants assert the union had the right to agree to arbitration and that the provisions in the agreements were sufficiently clear to be enforced. They deny arbitration is prohibited under Labor Code section 229 (all further statutory references are to this code unless otherwise stated) or that the provisions are unconscionable. Finally, they seek to have the action against Noble stayed until completion of arbitration.
We find no error and affirm.
FACTS AND PROCEDURAL HISTORY
The complaint alleges that at different times from July 2005 to November 2009 plaintiffs concurrently worked for defendants as joint employees. Their duties included loading, delivering, and unloading materials and preparing reports relating to that activity in connection with construction sites, most of which were road and highway projects.
Strength is a party to two collective bargaining agreements with the Industrial Professional and Technical Workers International Union, SIUNA, AFL-CIO (union) with effective dates of February 1, 2006 to January 31, 2009 (2006 agreement) and February 1, 2009 to January 31, 2012 (2009 agreement) (collectively the agreements). Both agreements applied to truck drivers.
In a paragraph entitled "Wage Order" (bold and capitalization omitted) in the 2006 agreement the parties acknowledged that provisions of wage orders issued by the Industrial Welfare Commission "may apply to the employees" and agreed any claimed violations were to be resolved "exclusively through the grievance and arbitration provisions of th[e] Agreement." The 2006 agreement also "prohibit[ed] conduct which would violate laws regulating the workplace" and enumerated and incorporated by reference those "laws and regulations," including the Labor Code, any regulations promulgated "by any agency which enforces any of such legislation," and any other state administrative regulations affecting the workplace. This same provision required that any dispute would be "resolved exclusively under the grievance and arbitration procedures contained in this [a]rticle."
The 2009 agreement contains a provision entitled "Meal Periods." (Bold, capitalization, and underscoring omitted.) It provides "that any dispute or grievance regarding overtime, meal periods, rest periods or any other subject matter covered by any and all wage orders issued by the State of California[,] including Industrial Wage Order 16-2001 (Wage Order 16)," is to be resolved pursuant to the grievance procedure in the agreement. It contained the same provision as in the 2006 agreement prohibiting conduct violating laws and regulations and incorporated the Labor Code and administrative and agency regulations. It also referred to procedures set forth in that article.
In 2010 plaintiffs, as former employees, filed suit against defendants setting out 10 causes of action: non-payment of overtime, failure to provide meal and rest periods, failure to maintain itemized wage statements, and failure to pay minimum wages all in violation of the Labor Code and Wage Order 16; failure to timely pay wages upon termination and violation of prevailing wage laws in violation of the Labor Code; unfair competition in violation of Business and Professions Code section 17200; violation of the Labor Code suing as private attorneys general (section 2698 et seq.); and breach of express and implied contract.
After filing an answer defendants moved to compel arbitration. After argument the trial court denied the motion, ruling that because Noble was not a party to the agreements there was no basis for it to compel arbitration. As to Strength, relying on authority in defendants' opposition, it stated "the law seems clear that a labor union cannot waive an employee's right to access to the court to resolve wage and hour claims such as this one."
DISCUSSION
1. No Waiver of Trial
Plaintiffs argue the union did not have the authority to prospectively waive their right to try wage and hour claims, no matter the language in the agreements. As authority they rely on Zavala v. Scott Brothers Dairy, Inc. (2006) 143 Cal.App.4th 585. There, plaintiff-employees sued the defendant for its alleged violation of sections 226 and 226.7 and certain wage orders based on failure to provide rest breaks and correctly itemized wage stubs, and for unfair business practices, claims similar to those in our case. Defendant petitioned to compel arbitration based on a collective bargaining agreement that required arbitration of all disputes "arising under" it. (Id. at p. 588, italics omitted.) The agreement provided for coffee breaks and itemization of wage statements but not in the same language as the Labor Code and wage orders. (Ibid.)
In affirming denial of the petition the court held the arbitration provision did not bind the plaintiffs "because the [u]nion could not waive [the] plaintiffs' right to bring statutory labor-rights claims in court and because such claims did not arise under the [collective bargaining agreement]." (Zavala v. Scott Brothers Dairy, Inc., supra, 143 Cal.App.4th at p. 592.) It based much of its reasoning on Barrentine v. Arkansas-Best Freight System, Inc. (1981) 450 U.S. 728 [101 S.Ct. 1437, 67 L.Ed.2d 641] where truck drivers subject to a collective bargaining agreement with a provision requiring arbitration for "'"any controversy which might arise"'" (Zavala v. Scott Brothers Dairy, Inc., supra, 143 Cal.App.4th at p. 593, italics omitted) were not required to arbitrate claims based on alleged violations of statutes "'designed to provide minimum substantive guarantees to individual workers' [citation]" (ibid., italics omitted). "Rights under the [federal Fair Labor Standards Act] . . . 'are independent of the collective-bargaining process'" (ibid.) and "'these congressionally granted . . . rights are best protected in a judicial rather than in an arbitral forum . . .' [citation]" (ibid., fn. omitted).
Defendants argue the right to trial may be waived under federal law so long as the waiver language is "'clear and unmistakable'" (Livadas v. Bradshaw (1994) 512 U.S. 107, 125 [114 S.Ct. 2068, 129 L.Ed.2d 93]) relying on 14 Penn Plaza LLC v. Pyett (2009) 556 U.S. 247 [129 S.Ct. 1456, 173 L.Ed.2d 398].) There, where defendant-union members and plaintiff, their employer, were parties to a collective bargaining agreement requiring arbitration for employment discrimination, defendants sued for violation of the federal Age Discrimination in Employment Act of 1967 (ADEA). The court held "that a collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law." (14 Penn Plaza LLC v. Pyett, supra, 556 U.S. at p. ____, 129 S.Ct. at p. 1474.)
But federal law is not at issue here. Plaintiffs' claims are based on state statutes and common law. Further, plaintiffs argue the Federal Arbitration Act (9 U.S.C. § 1 et seq.; FAA) does not govern the dispute and defendants do nothing more than make a passing claim, in another context, that because the case "involves an employment agreement" the FAA applies. Failure to make reasoned legal argument forfeits an issue. (People v. Stanley (1995) 10 Cal.4th 764, 793.) Thus there is no claim the FAA controls. And we see nothing in Penn Plaza that mandates its applicability to anything beyond the facts of the case, i.e., a suit for violation of federally protected rights under the ADEA.
Rather, the reasoning in Zavala persuades us that, despite some language to the contrary in the agreements, plaintiffs retain the right to litigate their statutory and Wage Order 16 wage and hour claims in a court. (Zavala v. Scott Brothers Dairy, Inc., supra, 143 Cal.App.4th at pp. 593-594; see also Chin et al., Cal. Practice Guide: Employment Litigation (The Rutter Group 2010) ¶ 18:553.1, p. 18-61 [under Zavala, despite arbitration clause in collective bargaining agreement employees retained right to sue for wage claims].)
2. Section 229
Section 229 declares: "Actions to enforce the provisions of this article for the collection of due and unpaid wages claimed by an individual may be maintained without regard to the existence of any private agreement to arbitrate. This section shall not apply to claims involving any dispute concerning the interpretation or application of any collective bargaining agreement containing such an arbitration agreement." The first sentence makes clear that despite an agreement to arbitrate unpaid wage claims, a plaintiff has the right to file suit.
In seeking to compel arbitration defendants rely on the second sentence, arguing that plaintiffs' claims "require the trial court to 'interpret and apply'" the provisions of the agreements, thus removing it from section 229's exemption. We disagree.
Granted, the statutes and wage orders are incorporated into the agreements. But that does not mean application of those statutes requires an interpretation of them. Strength's duties are set out in the provisions of the incorporated statutes and orders and, the fact-finder must look to them to determine the question and extent, if any, of its liability. There is a difference between referring to the agreements and interpreting them. (See Livadas v. Bradshaw, supra, 512 U.S. at pp. 123-124.) Only the former is necessary here.
Although the Supreme Court has held the FAA preempts section 229 based on the supremacy clause of the United States Constitution (Perry v. Thomas (1987) 482 U.S. 483, 490-491 ), as discussed above the FAA does not govern this dispute.
Thus, section 229 also protects plaintiffs' rights to litigate their claims for unpaid wages.
3. Non-Labor Code Causes of Action
Of the 10 causes of action in plaintiffs' complaint, three are not based on the Labor Code or Wage Order 16: two are for breach of contract and the other is for unfair competition under Business and Professions Code section 17200. Defendants assert that because all of these are based on the same conduct that is the basis for the alleged Labor Code violations, they should be arbitrated as well. Obviously, since the Labor Code and Wage Order 16 causes of action are not to be arbitrated, there is no basis for ordering arbitration of these claims.
DISPOSITION
The order is affirmed. Respondents are entitled to costs on appeal.
_______________
RYLAARSDAM, ACTING P. J.
WE CONCUR:
_______________
ARONSON, J.
_______________
IKOLA, J.