McGuire Woods, John A. Van Hook; and Joel S. Allen for Defendant and Appellant. Righetti Glugoski, Michael C. Righetti, John Glugoski; and Michael Malk 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. RIC1306158) OPINION APPEAL from the Superior Court of Riverside County. Sharon J. Waters, Judge. Affirmed as modified. McGuire Woods, John A. Van Hook; and Joel S. Allen for Defendant and Appellant. Righetti Glugoski, Michael C. Righetti, John Glugoski; and Michael Malk for Plaintiffs and Respondents.
Juan Varela (Varela), Victoria Lee Dinger Main (Main), and Steven Bailey (Bailey), as individuals and on behalf of others similarly situated, sued Dolgen California, LLC (Dolgen), which operated Dollar General stores. Varela, Main, and Bailey (collectively, Plaintiffs) brought a class action alleging (1) violations of meal and rest break laws; (2) waiting time penalties; (3) wage statement penalties; (4) unfair business practices; and (5) violations under PAGA. Dolgen petitioned the trial court to compel arbitration. The trial court granted the petition in part and denied the petition in part. Dolgen contends the trial court erred by partially denying the petition. In particular, Dolgen asserts the trial court erred by finding putative class members had pending claims at the time they signed the arbitration agreement. We modify the order, but otherwise affirm.
Private Attorney General Act. (Labor Code, § 2698 et seq.)
FACTUAL AND PROCEDURAL HISTORY
A. PROCEDURAL HISTORY FROM MAY 2013 THROUGH APRIL 2014
1. RIVERSIDE COUNTY COMPLAINT
On May 20, 2013, Varela filed his original class action complaint in Riverside County Superior Court. Varela alleged (1) violations of meal and rest break laws; (2) unfair business practices; and (3) violations pursuant to PAGA. Varela defined the class as " 'All current and former individuals who work/worked for [Dolgen] in the State of California within four years of the filing date of this action, and who a) [Dolgen] classified as non-exempt workers, b) [Dolgen] provided 'key carrier' responsibilities, and c) worked one or more afternoon or evening shifts and were unable to be relieved of all work-related duties during rest and/or meal breaks because s/he was the only individual with "key carrier" responsibility.' " Varela alleged that, due to Dolgen's practice of having only one supervisor on duty, the supervisors' breaks were often interrupted because they had to respond to a variety of situations requiring a supervisor and they had to remain on-call on the premises during the entirety of their break periods.
On behalf of himself and the class, Varela alleged Dolgen failed to provide meal and rest breaks. On behalf of himself and the class, Varela alleged Dolgen engaged in unfair business practices by requiring Varela and class members to work through their meal and rest breaks. Varela also alleged Labor Code violations, under PAGA.
2. SACRAMENTO COUNTY COMPLAINT
On June 6, 2013, Main filed her original class action complaint in Sacramento County Superior Court. Main's complaint reflected, "[Main] brings this action on behalf of herself, and the Class Members against [Dolgen] for [its] failure to relieve keyholders of duty for meal breaks; and were not permitted [sic] to leave [Dolgen's] premises unless there was a second keyholder on-duty to relieve the first keyholder on-duty; [its] failure to issue accurate itemized wage statements to California non-exempt employees; [its] failure to provide full wages due to California non-exempt employees upon separation of employment; and for [PAGA] related penalties stemming from the foregoing." (All caps. and fns. omitted.)
Main defined the class members as "all current and former non-exempt employees of Dolgen . . . who worked in the State of California at any time from June 6, 2009 th[r]ough the conclusion of this action, and who worked at least one shift as the only keyholder on-duty during the first five hours of a shift." (All caps. omitted.)
Main's first cause of action was brought on behalf of herself and the class and alleged a failure to provide meal breaks. Main's second cause of action was brought on behalf of herself and the class and alleged a failure to pay compensation due at the time the employees ceased their employment with Dolgen. Main's third cause of action was brought on behalf of herself and the class and alleged a failure to issue accurately itemized wage statements. Main's fourth cause of action was brought on behalf of herself and the class and alleged unfair business practices due to Dolgen not paying its employees for missed breaks and waiting time penalties. Main's fifth cause of action was brought under PAGA.
3. DOLGEN ACTIVITY
On July 1, 2013, Dolgen filed an answer to Varela's complaint. In April 2014 Dolgen petitioned to have the Riverside and Sacramento cases coordinated.
B. ARBITRATION AGREEMENT
On August 4, 2014, Dolgen distributed arbitration agreements (the Agreement) to its employees. Employees were given the options of consenting to or rejecting the Agreement. If an employee took no action, then after 30 days, the employee was deemed to have consented to the Agreement. Since August 4, 2014, Dolgen has presented newly hired employees with the Agreement.
The Agreement included the following introductory paragraph: "You agree that, with the exception of certain excluded claims described below, any legal claims or disputes that you may have against Dollar General, its parent and subsidiary corporations . . . arising out of your employment with Dollar General or termination of employment with Dollar General ('Covered Claim' or 'Covered Claims') will be addressed in the manner described in this Agreement."
The Agreement included the following class action waiver: "You and Dollar General may not assert any class action, collective action, or representative action claims in any arbitration pursuant to this Agreement or in any other forum." In regard to claims covered by the Agreement, the Agreement provided: "Covered claims also do not include claims pending in court as of the date this Agreement is signed by you"
C. PLAINTIFF'S ACTIVITY
In July 2017, Plaintiffs filed their second amended complaint. In August, Plaintiffs moved for class certification.
D. PETITION TO COMPEL ARBITRATION
Bailey began working for Dolgen in August 2015. As part of Bailey's hiring paperwork, he signed the Agreement. Bailey was hired as a sales associate. Bailey was later promoted to assistant store manager.
In September 2017, Dolgen petitioned the trial court to compel arbitration of (1) Bailey's claims; and (2) the claims of all putative class members who consented to the Agreement. Dolgen asserted Bailey's claims should be arbitrated because Bailey consented to the Agreement, which requires arbitration and prohibits class actions. Dolgen conceded the Agreement exempted claims pending in court at the time of signing the Agreement, but asserted that clause only applied to Varela and Main, who were the named plaintiffs in the pending cases when the Agreement was distributed to employees in August 2014.
Dolgen asserted, "[A]ny argument that [Bailey] and other putative class members had pending claims when they signed the Agreement is simply false because there is no way that employees who did not even fit the class definition at the time they signed the Agreement had 'pending claims' even before their first day of employment or their first shift. Finally, until a class is certified, claims of putative class members are only hypothetical, not pending, as they are not parties to the litigation."
Plaintiffs opposed Dolgen's petition to compel arbitration. In regard to Bailey, Plaintiffs asserted Varela's case was pending in court at the time that Bailey signed the Agreement. After Bailey was promoted to assistant store manager, he met the definition of the class defined in Varela's complaint. Therefore, Bailey should not have to arbitrate his claims because they fell within the pending claims exception of the Agreement. In regard to the putative class, Plaintiffs argued, "[N]o class has been certified, thus [Dolgen] cannot seek to compel any absent class member to arbitrate his/her claims because they are not parties and have not been given notice as required by their constitution[al] right to due process."
The trial court held a hearing on Dolgen's petition. In regard to Bailey, the trial court found he was not a putative class member when he signed the Agreement because he was a sales associate—not a keyholder—at the time of signing. As a result, Bailey did not have a pending claim at the time of signing of the Agreement. Therefore, the trial court ruled that the petition to compel arbitration would be granted as to Bailey's claims.
Counsel for plaintiffs said, "If I may just to clarify the ruling, just want to clarify this ruling is only as to Mr. Bailey and nobody else." The trial court responded, "Correct. Request to generically order other people into arbitration without identifying who they are or why they should be ordered, I don't even address. But thank you. I should have clarified that."
Counsel for Dolgen said, "So basically you have compelled Mr. Bailey to arbitration, and I assume that there is still not a—there's still no standing for us to make—you know, to come to a decision on what to do with the other potential putative class members." The court asked, "So you're talking about the key carriers, the people who were key carriers at the time the arbitration agreement was presented to them?" The court said its inclination was to deny the petition to compel arbitration as to those employees.
Counsel for Dolgen said, "At such time you're prepared to make a ruling, I assume you will listen to my defense of that . . . . But I understand what you're saying. But at least allow me to reserve my ability to make that argument at that time." Counsel for plaintiffs said, "I'm hesitant to get into asking for advisory rulings . . . . [¶] But . . . has the court made any interpretation of that disputed language which excludes claims pending in court from the arbitration agreement?"
The court said, "I think that's what I was trying to suggest, that I agreed with plaintiff's view that to the extent somebody was in a key carrier position at the time they were presented with this arbitration agreement that, in fact, they did have a claim pending in court, i.e., as a putative class member, and so they would not—that claim would not be covered." Counsel for Dolgen asked if the trial court was making that conclusion part of its ruling "in connection with this." The trial court responded, "Yes."
A. UNCLEAR RECORD
A written ruling was not made. The minute order from the hearing reflects that the petition to compel arbitration was granted; it does not reflect a partial denial as to the putative class members. In Dolgen's petition, it requested (1) Bailey, and (2) the putative class members be compelled to arbitrate. There is nothing in the reporter's transcript indicating the trial court granted the petition as to the putative class members. Accordingly, we conclude the minute order is incomplete to the extent it only reflects the petition was granted because it does not reflect the trial court's conclusion as to the putative class members. (People v. Malabag (1997) 51 Cal.App.4th 1419, 1422-1423 [circumstances of the individual case determine whether the clerk's transcript or reporter's transcript controls when the record is contradictory].)
It is unclear if the trial court (A) declined to rule on the petition as to the putative class members on the procedural basis that the petition was not ripe due to the putative class members having not yet been identified; (B) denied the petition as to the putative class members on the procedural basis that the petition was premature due to the putative class members having not yet been identified, or (C) denied the petition on the merits because the putative class members had "pending claims" that were exempt from the Agreement. For the sake of addressing the parties' concerns, we will proceed as though the trial court entered a partial denial of the petition to compel arbitration as it pertained to the putative class members. We will not assume the basis for that ruling.
To the extent the trial court declined to rule on the petition, and thus was merely musing over the possibilities presented by the case, this court would not have jurisdiction over this appeal. (Anne H. v. Michael B. (2016) 1 Cal.App.5th 488, 500-501; see also In re Baycol Cases I & II (2011) 51 Cal.4th 751, 754; see also Code Civ. Proc., §§ 904.1 & 1294.) We do not interpret the record in a manner that would defeat jurisdiction because (1) the parties do not interpret the record in that manner; (2) the parties need clarity, given the various ways in which the record can be interpreted; and (3) the case is ongoing, so clarity will be useful as the case proceeds. (See In re Elaine E. (1990) 221 Cal.App.3d 809, 813 [to promote judicial economy and substantial justice, the record is interpreted as including an appealable judgment]; see In re Albert B. (1989) 215 Cal.App.3d 361, 373 ["From the start, the issue of appealability has been unclear, although this court has held the orders here are appealable"]; see generally Hall v. Superior Court (2016) 3 Cal.App.5th 792, 805 [" 'If a judgment is ambiguous, we may examine the entire record to determine its scope and effect' "].) --------
Dolgen contends the trial court erred by partially denying its petition. Dolgen contends the putative members of the uncertified class did not have "claims pending" at the time they signed the Agreement. Plaintiffs contend, "The trial court lack[ed] authority to compel absent class members to arbitration." (Boldface omitted.)
C. TRIAL COURT'S AUTHORITY
We address the procedural issue of the timing of the petition to compel arbitration as it concerned the putative members of the uncertified class.
The law provides, "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." (Code Civ. Proc., § 1281.2.)
A petition to compel arbitration of putative class members, prior to class certification, is premature. (Lee v. Southern California University for Professional Studies (2007) 148 Cal.App.4th 782, 788.) Putative members of an uncertified class are not parties to the case for purposes of compelling arbitration. (See Smith v. Bayer Corp. (2011) 564 U.S. 299, 313 ["But as the dissent in Devlin noted, no one in that case was 'willing to advance the novel and surely erroneous argument that a nonnamed class member is a party to the class-action litigation before the class is certified' "].)
Because putative members of an uncertified class are not full parties to the case, they cannot yet refuse to arbitrate. A refusal to arbitrate is a necessary element of a petition to compel arbitration. (Code Civ. Proc., § 1281.2.) Because there was not a party to the case who refused to arbitrate, Dolgen's petition that pertained to the putative class members was premature. (Sky Sports, Inc. v. Superior Court (2011) 201 Cal.App.4th 1363, 1368 ["until the class was certified to include a signatory to the arbitration agreement, it would have been premature to bring a motion to compel"].) Thus, the trial court properly denied the petition.
To the extent the trial court denied the petition on the merits, i.e., based upon a finding that the putative class members had "claims pending" and thus were exempt from the Agreement, the trial court erred because such a finding was premature given that the putative class members were not yet full parties. (In re Checking Account Overdraft Litigation (11th Cir. 2015) 780 F.3d 1031, 1037 [("In the absence of both live claims and cognizable plaintiffs, the District Court's pronouncement purporting to definitively foreclose the arbitration of the hypothetical claims that might be raised in the future by hypothetical plaintiffs cannot be regarded as anything but an impermissible 'advisory opinion on [an] abstract proposition of law' "].) Accordingly, we will affirm the trial court's partial denial of the petition to compel arbitration, but we will modify the denial to be without prejudice.
D. MERITS OF THE PETITION
We have concluded ante the petition to compel arbitration was premature as it pertained to the putative members of the uncertified class. Our conclusion is limited to that issue. We express no opinion regarding whether the putative class members had "claims pending" when they signed the Agreement. (See generally Hendershot v. Ready to Roll Transportation, Inc. (2014) 228 Cal.App.4th 1213, 1225 ["The position that absent class members occupy in class action litigation is sui generis"]; see also Deposit Guaranty Nat. Bank, Jackson, Miss v. Roper (1980) 445 U.S. 326, 342 (conc. opn. of Stevens, J.) ["absent members of the class should be considered parties to the case or controversy at least for the limited purpose of the court's Art. III jurisdiction"].)
The partial denial of the petition to compel arbitration is modified to reflect the partial denial is without prejudice to the petition being brought again at the proper time. In all other respects, the order is affirmed. The parties are to bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3).)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
J. I concur: RAMIREZ
RAPHAEL, J., Dissenting.
I must dissent. We have no jurisdiction over this appeal, so we must dismiss it.
This is a class action case where an appeal has been taken not only before class certification, but before the class members have even been identified in discovery. The only potential basis for our jurisdiction would be if this appeal were from an "order dismissing or denying a petition to compel arbitration" under Code of Civil Procedure section 1294, subdivision (a). But here, defendant and appellant Dolgen California, LLC (Dolgen) entirely prevailed on its only petition to compel arbitration. A grant of a petition to compel arbitration is not an appealable order. (Reyes v. Macy's, Inc. (2011) 202 Cal.App.4th 1119, 1122.) There is thus no appealable order here. We today are issuing an opinion modifying and affirming, in a modest way, what the majority construes to be the trial court's order, but we lack jurisdiction to do even this much.
Dolgen filed a petition to compel arbitration as to a single named plaintiff—its "Petition to Compel Individual Arbitration of Steven Bailey's Claims"—and likely expected to get a ruling that could apply broadly to other putative members in this class action. Dolgen's petition was granted. Yet it turned out that Dolgen's petition was granted on a ground that does not resolve the broadest issue the parties wish to address.
That broad issue is the validity of the class action waiver that many of the putative class members signed. After the underlying class action lawsuits were filed—but before the putative class members joined the lawsuits—Dolgen distributed to its employees arbitration agreements that included a class action waiver.
Did the putative class members who signed the agreements waive the right to join this class action in these circumstances? Dolgen believes they did; plaintiffs believe they did not.
Possibly expecting to obtain resolve this issue, Dolgen filed its "petition to compel individual arbitration of Steven Bailey's claims," as he was the only one of the three named plaintiffs who joined the lawsuit after he signed the class action waiver. The petition was directed only to Bailey, not to any other plaintiff. Not only the caption, but the notice of hearing ("To Plaintiff Steven Bailey and His Attorneys of Record"), and its substantive argument heading ("Plaintiff Must Arbitrate His Claims Against [Dolgen]"), concerned only Bailey. It relied throughout on Bailey's deposition, not on the deposition of any other plaintiff. And, among other things, it relied on a declaration of a supervisor who reviewed Bailey's personnel records, not anyone else's records.
Of course, the petition could not properly seek to compel other particular putative class members to arbitrate, as these other class members were not yet plaintiffs in the case (nor even identified in the litigation). Even if there were a general legal ruling that would apply to them—such as that the class action waiver was generally valid even though it was presented by corporate counsel while a lawsuit was pending—they still would have the opportunity to, at least, litigate their individual circumstances before they are compelled into arbitration.
In a few places in its petition, Dolgen signaled that it hoped to receive a ruling as to Bailey that would apply to other class members. But even in its petition, it recognized that there was no particular other class member that it was seeking to compel to arbitration. For instance, it did not state that all putative class members had signed the agreement. Rather, it stated only that "a significant number of the putative class members in this case have consented to the Agreement . . . ." Dolgen implicitly recognized that a meaningful number of putative class members had opted out of the arbitration agreement, noting that "of the more than 3,000 total putative class members, there are fewer than 800 total opt-outs."
Thus, the petition was directed at Bailey and noticed only to Bailey. But even if the trial court's ruling as to Bailey might bear on some other putative class members, Dolgen did not seek to compel any other particular class member to arbitration. Because they had not yet been identified as plaintiffs, there was as yet no means to do so.
Our record reflects that the court "granted" the petition. Thus, it compelled Bailey to arbitration as Dolgen requested. It did not make any ruling regarding the arbitration of the claims of any other particular class member.
Code of Civil Procedure section 1294, subdivision(a) provides for appellate jurisdiction over only a dismissal or a denial of a petition to compel arbitration. There is no appellate jurisdiction over a grant of such a petition. For this reason, we have no jurisdiction over this appeal.
The confusion about appealability in this case arises because, at the hearing, the parties sought advisory views from the trial court as to the broad issue of the validity of the class action waivers that Dolgen used. The waivers may in the future be challenged by employees not yet a part of this case, on the ground that Dolgen provided the agreements containing the waivers while this lawsuit was pending but before the employees had joined it.
The grant of Dolgen's petition compelling Bailey to arbitration did not resolve the broad issue, because, at the time he signed the agreement, he was not in the position included in this class action but was promoted into it later.
It is true that the trial court stated that it "tend[ed] to agree with the plaintiff" that in general the putative class members had not waived their claims when they signed the agreement. But it resolved the petition based on its view that the particular "problem . . . with respect to Mr. Bailey" was that he "wasn't a class member at the time" he signed.
At the hearing, in fact, Dolgen's counsel made sure that the trial court clarified that it was not ruling as to any other putative class member:
"[Counsel]: Your Honor, if I may . . . just to clarify the ruling, just want to clarify this ruling is only as to Mr. Bailey and nobody else.
"THE COURT: Correct. Request to generically order other people into arbitration without identifying who they are or why they should be ordered, I don't even address."
Dolgen's counsel made sure the record made clear that the issue of "what do we do with the people . . . who are not here who are subject to the arbitration agreement" was not decided by stating: "My understanding is that, you know, there's no ruling here on that issue." Counsel repeated: "you have compelled Mr. Bailey to arbitration, and . . . there's still no standing for us to . . . come to a decision on what to do with the other potential putative class members."
In response, the trial court indicated it agreed with the plaintiffs on the broader issue of the validity of the agreement, but it confirmed it was not making a ruling on class members other than Bailey: "[C]an I make a ruling on that right now? You're right. I can't. So I'm just giving you my thoughts . . . ."
In fact, Dolgen's counsel specifically asked the court to reserve its judgment on the issue so that it could argue it further: "At such time you're prepared to make a ruling, I assume you will listen to my defense of that and how I believe that all those cases are easily distinguishable. . . . [A]t least allow me to reserve my ability to make that argument at that time." The court responded, "Sure." There followed a discussion where it became clear that the court had not received Dolgen's reply in support of its petition that contained some of the case law support Dolgen wished to provide. The court then stated, "If there is a way to bring that issue back around to me, then I'll certainly read what I didn't read last week, which is your reply papers [on] that point."
Thus, the record establishes that the trial court issued no ruling as to any class member other than Bailey.
Toward the end of the hearing, Bailey's counsel again asked the court for its view on the issue of other potential class members who were in the applicable position when they signed the waiver. In doing so, counsel stated that he was "hesitant to get into asking for advisory rulings" because he knew the issue as to "this plaintiff" was decided. In response, the court re-stated its view that it agreed with the plaintiffs. The court did not state that its view was anything other than an advisory ruling, and it did not retract its statement that Dolgen could make an argument as to those putative class members later.
The court did make a further separate ruling that could best be characterized as a discovery ruling. "So now defense needs to go and . . . identify the people's position at the time they signed the agreement and identify how many key carriers we had so plaintiff knows what his potential class is now." The court confirmed that this was a ruling it was making "in connection with" the petition.
This last ruling was not a denial of the petition to compel Bailey to arbitration, nor was it a substantive ruling on whether the other class members would (or would not) be compelled to arbitrate. Rather, it was an order designed to inform plaintiffs' counsel of his "potential" class limited to employees who were (unlike Bailey) already potential class members at the time they signed their agreements. The Court's statements at the hearing do not change the fact that the Court granted (rather than denied) the petition to compel arbitration that Dolgen filed.
"The right to appeal is wholly statutory." (Dana Point Safe Harbor Collective v. Superior Court (2010) 51 Cal.4th 1, 5). The Legislature has not permitted immediate appeals from orders granting petitions to compel arbitration, so an appeal from any such order must wait for a final judgment in a case.
Here, Dolgen filed a petition to compel arbitration of Bailey's individual case, and that petition was granted. No other individual was the subject of the petition. While the parties understandably are interested in receiving a ruling on whether arbitration will be compelled for the putative class members who signed the class action waiver while they were already potential members of the class, the petition was directed only at Bailey, and the others are not even yet in the case. There was no dismissal or denial of a petition to compel arbitration as to any particular plaintiff, so we have no jurisdiction under Code of Civil Procedure section 1294, subdivision (a).
There are circumstances where we have authority to interpret an imperfect record to find that, in substance, jurisdiction is established. For example, we could do so where an appeal from a dismissal order was filed prematurely before such an order was entered, where there was in substance actually an order of dismissal. (See In re Elaine E. (1990) 221 Cal.App.3d 809, 813.) But we lack authority to interpret a record to find a substantive ruling that does not exist and thereby create jurisdiction that the Legislature has not provided. In this appeal, there is currently no order regarding the as-yet-unidentified class members—much less an appealable order—to "affirm" or "modify." Jurisdiction cannot be created because the parties believe it exists, or because a ruling from an appellate court would be useful to them.
For these reasons, I believe we are compelled by law to dismiss this appeal, so that is the action I would take.