Cortez v. Doty Bros. Equipment Co.

Gabriel Cortez sued his former employer Doty Bros. Equipment Company for Labor Code and wage and hour violations on behalf of himself and a putative class of employees and former employees.  Cortez’s complaint included a related representative claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).  On September 19, 2014 the superior court granted Doty Bros.’ petition to compel arbitration of Cortez’s individual claims pursuant to an arbitration provision in the collective bargaining agreement (CBA) governing his employment and severed and stayed his PAGA claim, which was not subject to arbitration.  The court reserved questions concerning the arbitrability of the class claims for the arbitrator.  On November 19, 2014 we summarily denied Cortez’s petition for a writ of mandate challenging the court’s order compelling arbitration.

          

Cortez and Doty Bros. then stipulated to allow the superior court, rather than the arbitrator, to determine the arbitrability of the class claims.  On March 23, 2015, after substantial briefing and a hearing on this question, the court dismissed the class claims as unauthorized under the CBA.  On April 1, 2015 Cortez filed a notice of appeal purporting to appeal from the March 23, 2015 order dismissing his class claims and the September 19, 2014 order compelling arbitration of his individual claims.  Cortez argued in his appellate briefs that this court had jurisdiction to review both rulings under the death knell doctrine.

          

While Cortez’s appeal was pending, the appellate courts in Munoz v. Chipotle Mexican Grill, Inc. (2015) 238 Cal.App.4th 291, 310 (Munoz) and Miranda v. Anderson Enterprises, Inc. (2015) 241 Cal.App.4th 196, 201-202 (Miranda) held the death knell doctrine did not apply to the denial of class certification or dismissal of class claims while a plaintiff’s PAGA claim remained pending in the trial court.  Concerned about the viability of his initial appeal, Cortez voluntarily dismissed his PAGA claim with prejudice on March 30, 2016 and filed a second notice of appeal on May 20, 2016, again identifying the September 19, 2014 order compelling arbitration and the March 23, 2015 order dismissing all class claims as the orders subject to appellate review.  We consolidated the two appeals.

          

Cortez contends this court has jurisdiction under the death knell doctrine to review the March 2015 dismissal of his class claims either because the outstanding PAGA claim did not defeat that order’s appealability under the death knell doctrine or because he removed any bar to appellate jurisdiction when he dismissed his PAGA claim in March 2016 and filed a new notice of appeal.  Cortez also contends the September 2014 order compelling arbitration is an interim order affecting the class’s substantial rights and thus is reviewable on appeal from the order dismissing the class claims under Code of Civil Procedure section 906.  Alternatively, he requests we treat his consolidated appeal as a petition for writ of mandate, revisit our summary denial of his prior writ petition and address the merits of both the court’s order compelling arbitration of his individual claims and the dismissal of his class claims.

          

On the merits Cortez argues his statutory claims were not encompassed by the terms of the arbitration agreement in the CBA and, even if they were, the court erred in dismissing the class claims because the right to pursue collective action—including prosecution of a class action in an arbitral forum—is a nonwaivable protected right under the National Labor Relations Act (NLRA) (29 U.S.C. § 151 et seq.).

          

Although not fully identified by the parties in their briefs, Cortez’s appeal poses several difficult jurisdictional questions, in particular, the effect of Cortez’s dismissal of his PAGA claim on the appealability of the earlier order dismissing the class claims, including whether a plaintiff’s voluntary action can create an appealable order under the death knell doctrine and whether the second notice of appeal from an order entered more than a year before was timely; and the applicability of Code of Civil Procedure section 906 to an order made appealable under the judicially created death knell doctrine rather than pursuant to Code of Civil Procedure section 904.1.  We resolve none of those issues.  Rather, in light of the uncertainty of the appealability of the orders challenged by Cortez and the absence of any delay or prejudice our intervention at this stage would cause, we find this an appropriate case in which to exercise our discretion to treat the consolidated appeal as a petition for writ of mandate and reach the merits of the superior court’s orders compelling arbitration of Cortez’s individual claims and terminating the class claims.

          

We grant Cortez’s petition in part, finding Cortez’s cause of action under the Labor Code for Doty Bros.’ failure to timely pay wages upon his separation from employment (Lab. Code, § 203) (sixth cause of action) and his unfair competition action based on that alleged statutory violation (Bus. & Prof. Code, § 17200) (seventh cause of action) are not encompassed by the arbitration provision in the CBA.  In all other respects, we deny the petition, concluding the remaining causes of action are subject to arbitration, and the court’s termination of class claims proper on the ground the CBA does not authorize classwide arbitration.