Hernandez v. Ross Stores

Hernandez v. Ross Stores (CA4/2 E064026, filed 12/7/16, pub. ord. 1/3/16) Arbitration/PAGA



Defendant and appellant Ross Stores, Inc. (Ross) appeals the denial of its motion to compel arbitration.  Plaintiff and respondent Martina Hernandez was employed at a Ross warehouse in Moreno Valley.  She filed a single-count representative action under the California Private Attorney General Act, Labor Code section 2698 et. seq. (PAGA) alleging Ross had violated numerous Labor Code laws, and sought to recover PAGA civil penalties for the violations.

          

Ross insisted that Hernandez must first arbitrate her individual disputes showing she was an “aggrieved party” under PAGA and then the PAGA action could proceed in court.  The trial court found, relying on Iskanian v. CLS Transportation Los Angeles LLC (2014) 59 Cal.4th 348, 387 (Iskanian) that the PAGA claim was a representative action brought on behalf of the state and did not include individual claims.  As such, it denied the motion to compel arbitration because there were no individual claims or disputes between Ross and Hernandez that could be separately arbitrated.

          

On appeal, Ross raises the issue of whether under the Federal Arbitration Act (FAA) an employer and employee have the preemptive right to agree to individually arbitrate discreet disputes underlying a PAGA claim while leaving the PAGA claim and PAGA remedies to be collectively litigated under Iskanian.  We uphold the trial court’s denial of the motion to compel arbitration.

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