Date: 09-02-2017

Case Style: Gabriel Cortez v. Doty Bros. Equipment Company

Case Number: B275255

Judge: P.J. Perluss

Court: California Court of Appeals Second Appellate District Division Seven on appeal from the Superior Court, Los Angeles County

Plaintiff's Attorney: Eric B. Kingsley, Liane Katzenstein, Ly, Kelsey M. Szamet, Ari J. Stiller, Michael A. DesJardins and Eric A. Panitz

Defendant's Attorney: John T. Egley, Joshua G. Simon and Delavan J. Dickson

Description: 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.
3
(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
4
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
5
arbitration, and the court’s termination of class claims proper on
the ground the CBA does not authorize classwide arbitration.
FACTUAL AND PROCEDURAL BACKGROUND
1. The CBA Governing Cortez’s Employment
From September 2008 through May 2013 Cortez was a
member of Teamsters Local Union No. 986 and worked at various
times as a truck driver in the employ of Doty Bros. in its water
division. Doty Bros. belongs to an association of general
contractors that entered into a CBA with the Teamsters on
July 1, 2006 and a second CBA on July 1, 2010. Both CBA’s
provided, “The parties to this Agreement recognize Industrial
Wage Order 16-2001 covering On Site Construction, Mining,
Drilling, and Logging Industries. Any dispute or grievance
arising from this Wage Order shall be processed under and in
accordance with Article V, Procedure for Settlement of
Grievances and disputes of this agreement.” Article V
established an arbitration process overseen by a board made up
of union and contractor representatives.
2. Cortez’s Individual Claims and Putative Class Action
Cortez sued Doty Bros. on behalf of himself and all
individuals “who hold or held the position of ‘non-supervisory
hourly employees in the following divisions: water, underground,
and oil’ currently employed by or formerly employed by” Doty
Bros. or its subsidiaries or affiliated companies. In a first
amended complaint Cortez alleged on behalf of himself and the
putative class that Doty Bros. failed to comply with multiple
provisions of the Labor Code governing overtime pay (Lab. Code,
§§ 204, 510, 1194, 1198), meal periods (Lab. Code, §§ 226.7, 512)
and rest breaks (Lab. Code, § 226.7) and requiring timely
payments of wages due following termination of employment
6
(Lab. Code, §§ 201-203). He also alleged that Doty Bros. violated
the record keeping requirements in Labor Code sections 226,
1174 and 1174.5 and Industrial Welfare Commission (IWC) wage
order No. 16-2001 (Wage Order 16). Finally, Cortez alleged Doty
Bros.’ violations of those statutes and regulations constituted
unfair competition (Bus. & Prof. Code, § 17200) and provided the
basis for his representative action for civil penalties under PAGA.
3. Doty Bros’ Petition To Compel Arbitration
Doty Bros petitioned to compel arbitration of all Cortez’s
individual statutory claims and to dismiss the class claims and
representative PAGA claim as unauthorized under the CBA.
Cortez opposed the petition, arguing, among other things, the
CBA did not contain a clear and unmistakable waiver of his right
to litigate in a judicial forum his statutory claims under the
Labor Code. On September 19, 2014 the superior court granted
Doty Bros’ petition to compel arbitration of all but Cortez’s PAGA
cause of action, reasoning, as to the latter claim, the right to
prosecute the PAGA action in a judicial forum was nonwaivable
under the Supreme Court’s decision in Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348. The
court severed and stayed the PAGA claim and ordered the
remainder of Cortez’s individual and class claims to arbitration,
leaving it to the arbitrator to decide whether the CBA authorized
classwide arbitration.
The parties thereafter stipulated to have the court, not the
arbitrator, determine the question whether the CBA authorized
arbitration of class claims. On March 23, 2015, following briefing
and a hearing on this question, the court concluded the CBA did
not contemplate arbitration of class claims. The court rejected
Cortez’s argument that classwide arbitration was nonwaivable
7
under the NLRA, dismissed the class claims and directed all but
the PAGA claim to be individually arbitrated. Cortez filed a
notice of appeal. Later, as discussed, Cortez voluntarily
dismissed his PAGA claim and filed a second notice of appeal,
purporting to appeal from both the September 19, 2014 order
compelling arbitration of his individual claims and the March 23,
2015 order dismissing his putative class claims.
DISCUSSION
1. Appealability
a. The March 23rd order dismissing class claims while
the PAGA claim remained pending was not an
appealable order
The death knell doctrine, a judicially created exception to
the one final judgment rule, treats an order that dismisses class
claims while allowing individual claims to survive as an
appealable order. (In re Baycol Cases I & II (2011) 51 Cal.4th
751, 757 (Baycol) [under the “death knell doctrine,” when an
“order effectively [rings] the death knell for the class claims, [the
court] treat[s] it as in essence a final judgment on those claims,
which [is] appealable immediately”]; Aleman v. Airtouch Cellular
(2012) 209 Cal.App.4th 556, 585 [same].) The doctrine is
animated by two basic considerations: (1) The order terminating
class claims is the practical equivalent of a final judgment for
absent class members; and (2) without the possibility of a group
recovery, the plaintiff will lack incentive to pursue claims to final
judgment, thus allowing the order terminating class claims to
evade review entirely. (Baycol, at p. 758.) To preserve appellate
review of orders terminating class claims, the death knell
doctrine permits appeal from an order that “amounts to a
de facto final judgment for absent plaintiffs under circumstances
8
where . . . the persistence of viable but perhaps de minimis
individual plaintiff claims creates a risk no formal final judgment
will ever be entered.” (Id. at p. 759; accord, Coopers & Lybrand v.
Livesay (1978) 437 U.S. 463, 469-470 [98 S.Ct. 2454, 57 L.Ed.2d
351]; Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758, 766.)
Significantly, the two fundamental underpinnings of the
death knell doctrine are lacking when a plaintiff’s representative
PAGA claim remains pending in the trial court following the
termination of the class claims. Despite dismissal of the class
claims, the PAGA plaintiff remains incentivized by the statutory
scheme to proceed to judgment on behalf of himself or herself as
well as the individuals he or she represents. (See Munoz, supra,
238 Cal.App.4th at p. 311 [“[g]iven the potential for recovery of
significant civil penalties if the PAGA claims are successful, as
well as attorney fees and costs, plaintiffs have ample financial
incentive to pursue the remaining representative claims under
the PAGA and, thereafter, pursue their appeal from the trial
court’s order denying class certification”].) For this reason, every
appellate court that has addressed this issue since Munoz (the
first published appellate case to address the question) has
similarly found the death knell doctrine inapplicable when a
PAGA claim remains pending after the termination of class
claims. (E.g., Young v. RemX, Inc. (2016) 2 Cal.App.5th 630,
635-636; Nguyen v. Applied Medical Resources Corp. (2016)
4 Cal.App.5th 232, 243 (Nguyen); Munoz, at p. 310; Miranda,
supra, 241 Cal.App.4th at pp. 201-202.)1

1
In Bartoni v. American Medical Response West (2017)
11 Cal.App.5th 1084, our colleagues in the First District, faced
with the appellant’s argument that Munoz was wrongly decided,
9
We find the analyses of these appellate courts persuasive
and hold the death knell exception to the one final judgment rule
does not apply when a PAGA claim remains pending in the trial
court following termination of the class claims. Accordingly, the
March 23, 2015 order was not appealable under the death knell
doctrine.
b. Questions exist as to the viability and scope of our
appellate jurisdiction; we treat the appeal as a
petition for writ of mandate
Cortez contends he eliminated any bar to appellate
jurisdiction when he voluntarily dismissed his PAGA claim on
March 30, 2016 and filed a new notice of appeal on May 20, 2016
challenging both the termination of his putative class claims and
the order compelling arbitration. It was at that point, he argues,
that the death knell sounded, and the one-year-old March 23,
2015 order dismissing his class claims became appealable. (Doty
Bros, for its part, agrees with this analysis concerning the
appealability of the dismissal of the class claims.) Cortez also
contends the September 2014 order compelling arbitration is
reviewable on appeal from the order terminating class claims as
an interim order affecting the class’s substantial rights. (See
Code Civ. Proc., § 906 [“[u]pon an appeal pursuant to Section
904.1 or 904.2, the reviewing court may review the verdict or
decision and any intermediate ruling, proceeding, order or
decision which involves the merits or necessarily affects the
judgment or order appealed from or which substantially affects
the rights of a party”].)

declined to reach the issue and elected to treat the appeal as a
writ petition. (Bartoni, at p. 1095.)
10
The events underlying Cortez’s two appeals raise several
intriguing jurisdictional questions: (1) May a plaintiff
unilaterally sound the death knell by voluntarily dismissing the
representative action that serves as an obstacle to appealability
under the death knell doctrine? (2) If so, under what time
constraints must the plaintiff take such action to perfect a timely
appeal from the order terminating the class claims? That is,
must the voluntary dismissal of the PAGA claim and filing of a
notice of appeal occur within 60 days (or 180 days) of entry of the
order terminating class claims for the appeal from the dismissal
order to be timely (see Cal. Rules of Court, rule 8.104(a)(1) [notice
of appeal must be filed on or before earliest of (A) 60 days after
superior court clerk serves a notice of entry of judgment; (B) 60
days after a party serves a notice of entry of judgment; or (C) 180
days after entry of judgment]) or, as occurred here, is the filing of
a new notice of appeal within 60 days after the plaintiff’s
voluntary dismissal of the PAGA claim sufficient?
The scope of our appellate jurisdiction under the death
knell doctrine is also at issue. The September 19, 2014 order
compelling arbitration was not an appealable order. (Code Civ.
Proc., § 1294; Abramson v. Juniper Networks, Inc. (2004)
115 Cal.App.4th 638, 648 [order compelling arbitration not
appealable; may be reviewed only after entry of judgment
confirming award]; Muao v. Grosvenor Properties, Ltd. (2002)
99 Cal.App.4th 1085-1089.) Thus, even if appellate jurisdiction
exists under the death knell doctrine, is the September 2014
order compelling arbitration subject to review? Is it, as Cortez
contends, appealable as an interim order affecting substantial
rights after judgment pursuant to Code of Civil Procedure
section 906 (cf. Wallace v. GEICO General Ins. Co. (2010)
11
183 Cal.App.4th 1390, 1396, fn. 5 [ruling that plaintiff lacked
standing to serve as class representative reviewable on appeal
from order striking class allegations]) or is section 906
inapplicable here, when the appeal from the termination of the
class claims was premised not on Code of Civil Procedure
sections 904.1 or 904.2, as section 906 by its terms requires, but
pursuant to the judicially created death knell doctrine?
Each of these questions presents threshold jurisdictional
issues; however, we need not resolve any of them here. In light of
the legal uncertainty surrounding the effect of Cortez’s voluntary
dismissal of the PAGA claim on the appealability under the death
knell doctrine of the superior court’s order terminating class
claims and the parties’ agreement the propriety of the
termination of the class claims is properly before this court, as
well as the lack of any prejudice or delay that would be caused by
our intervention at this point, we exercise our discretion to treat
the appeal from the termination of class claims as a petition for
writ of mandate and consider the merits of the order dismissing
the class claims and the prior order compelling arbitration of
Cortez’s individual claims. (See Olson v. Cory (1983) 35 Cal.3d
390, 401; Nelsen v. Legacy Partners Residential, Inc. (2012)
207 Cal.App.4th 1115, 1123; Phillips v. Sprint PCS, supra,
209 Cal.App.4th at p. 767; H.D. Arnaiz, Ltd. v. County of San
Joaquin (2002) 96 Cal.App.4th 1357, 1366-1367.)
In exercising our discretion in this manner, we are mindful
that reviewing an order compelling arbitration by writ should be
done sparingly and only in an appropriate circumstance to avoid
defeating the purpose of the arbitration statute. (Young v. RemX,
Inc., supra, 2 Cal.App.5th at p. 636 [“‘“[t]he rationale behind the
rule making an order compelling arbitration nonappealable is
12
that inasmuch as the order does not resolve all of the issues in
controversy, to permit an appeal would delay and defeat the
purposes of the arbitration statute”’”]; Zembsch v. Superior Court
(2006) 146 Cal.App.4th 153, 160 [same].) Indeed, we summarily
denied the initial writ petition seeking review of the order
compelling arbitration for just that reason. Now, however, when
arbitration has already been significantly delayed and the issues
fully briefed, review of that arbitration order, integral to a proper
evaluation of the order terminating class claims, will not cause
any additional delay or subvert the purpose of the arbitration
statute. To the contrary, efficiency is gained, not lost, by treating
the appeal from the dismissal of class claims as a writ petition
and considering both orders at the same time. (See Nelsen v.
Legacy Partners Residential, supra, 207 Cal.App.4th at p. 1123
[treating appeal from order compelling arbitration as writ
petition]; Phillips v. Sprint, supra, 209 Cal.App.4th at p. 767; see
also Vasquez v. Superior Court (2000) 80 Cal.App.4th 430, 434
(Vasquez) [deciding on merits petition for writ of mandate
challenging order compelling arbitration based on arbitration
provision in CBA].)
2. The Order Compelling Arbitration
a. Governing law and standard of review
A petition to compel arbitration should be granted if the
court determines that an agreement to arbitrate the controversy
exists. (Code Civ. Proc., § 1281.2.) Fundamental to this inquiry
is whether the parties have agreed to arbitrate their dispute.
(See Am. Express Co. v. Italian Colors Rest. (2013) 570 U.S. __
[133 S.Ct. 2304, 2306, 186 L.Ed.2d 417 [it is “overarching
principle that arbitration is a matter of contract”]; Mendez v.
Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541
13
(Mendez) [arbitration is a contractual matter; “‘a party that has
not agreed to arbitrate a controversy cannot be compelled to do
so’”]; see also Vasserman v. Henry Mayo Newhall Memorial
Hospital (2017) 8 Cal.App.5th 236, 244 (Vasserman) [same];
Avery v. Integrated Healthcare Holdings, Inc. (2013)
218 Cal.App.4th 50, 59 [same].)
A union representative may agree on an employee’s behalf
as part of the collective bargaining process to require the
employee to arbitrate controversies relating to an interpretation
or enforcement of a CBA. (14 Penn Plaza LLC v. Pyett (2009)
556 U.S. 247, 256-257 [129 S.Ct. 1456, 173 L.Ed.2d 398] (Penn
Plaza) [“‘arbitration of labor disputes under collective bargaining
agreements is part and parcel of the collective bargaining process
itself’”]; Wright v. Univ. Maritime Serv. Corp. (1998) 525 U.S.
70, 79 [119 S.Ct. 391, 142 L.Ed.2d 361] (Wright).) In fact, when a
CBA includes an arbitration provision, contractual matters under
a CBA are presumed arbitrable; that is, arbitration must be
granted as long as the CBA is reasonably susceptible to an
interpretation in favor of arbitration. (Wright, supra, 525 U.S.
at pp. 78-79.)
However, the presumption of arbitration in a CBA does
not apply to statutory violations. (Wright, supra, 525 U.S. at
pp. 78-79 [cases involving statutory claims “ultimately concern[]
not the application or interpretation of any CBA, but the
meaning of a . . . statute” and rights “distinct from any right
conferred by” the CBA]; see Penn Plaza, supra, 556 U.S. at
p. 258.) Thus, although a union representative in negotiating a
CBA in good faith may waive the employee’s right to pursue in a
judicial forum an action for a statutorily protected right (see Penn
Plaza, supra, 556 U.S. at p. 256 [the decision to fashion a CBA to
14
require arbitration of statutory claims is “no different from the
many other decisions made by parties in designing grievance
machinery”]), the United States Supreme Court has made clear
that waiver of the right to prosecute a statutory violation in a
judicial forum is only effective if it is explicit, “‘clear and
unmistakable.”’ (Id. at p. 254; accord, Wright, at p. 80 [the right
to prosecute statutory violations in a judicial forum “is of
sufficient importance to be protected against [a] less-than-explicit
union waiver” in a CBA]; Mendez, supra, 220 Cal.App.4th at
p. 543.)2

2 Citing cases decided prior to Penn Plaza, supra, 556 U.S.
247, Cortez contends the rights guaranteed to him under the
Labor Code are nonwaivable and cannot be negotiated away as
part of the collective bargaining process. (See Barrentine v.
Arkansas-Best Freight System, Inc. (1981) 450 U.S. 728, 740
[101 S.Ct. 1437, 67 L.Ed.2d 641] (Barrentine) [holding that union
representative could not waive on employee’s behalf employee’s
right to pursue in court wage and hour claims under the Fair
Labor Standards Act]; Zavala v. Scott Brothers Dairy, Inc. (2006)
143 Cal.App.4th 585, 592-593 (Zavala) [citing Barrentine to
support its holding that union representative could not waive
employee’s right to litigate in court wage and hour violation
under Labor Code].) In fact, as Penn Plaza recognized, there is
no waiver of the substantive statutory right by requiring
arbitration, only the right to seek relief from a court, rather than
an arbitrator, in the first instance. (Penn Plaza, supra, 556 U.S.
at p. 266.) Moreover, although Cortez urges the Penn Plaza
holding should be limited to antidiscrimination statutes and held
not to apply to statutory claims under the Labor Code, nothing in
Penn Plaza supports such a cramped interpretation. To the
contrary, in holding that statutory violations could be subject to
arbitration if clearly and unmistakably bargained for in the CBA,
the Penn Plaza Court distinguished the arbitration provision in
15
We apply de novo review to the trial court’s interpretation
of an arbitration agreement that does not involve conflicting
extrinsic evidence. (Vasserman, supra, 8 Cal.App.5th at p. 244;
Mendez, supra, 220 Cal.App.4th 541.)
b. The CBA contained an explicit and unmistakable
agreement to arbitrate Labor Code claims seeking to
enforce Wage Order 16
The CBA governing Cortez’s employment provided that
“[a]ny dispute or grievance arising from this Wage Order 16[]
shall be processed under and in accordance with” the arbitration
procedure outlined in Article V of the CBA. While recognizing
that provision clearly and unmistakably requires arbitration of
claims arising under the wage order, Cortez insists he brought
his claims under the Labor Code, not the wage order.3
Therefore,
he asserts, his Labor Code claims are not subject to arbitration.

Barrentine on the ground it “did not expressly reference the
statutory claim at issue” and was thus not sufficiently clear and
explicit to support a waiver. (Penn Plaza, at p. 263.) Of course,
the necessary implication of that holding is that a clear and
explicit agreement to arbitrate wage and hour claims would be
enforceable.
3 As the Supreme Court explained several months ago, “The
Legislature established the Industrial Welfare Commission
(IWC) a century ago to regulate and protect the working
conditions of women and minors. [Citation.] The IWC carried
out that mission by adopting a series of wage orders, quasilegislative
enactments ‘establishing minimum wages, maximum
work hours, and conditions of labor.’ [Citations.] As a result,
‘wage and hour claims are today governed by two complementary
and occasionally overlapping sources of authority: the provisions
of the Labor Code, enacted by the Legislature, and a series of
18 wage orders, adopted by the IWC.’” (Mendoza v. Nordstrom,
16
Cortez’s argument has some superficial appeal. The Labor
Code is not mentioned in the CBA, and no extrinsic evidence was
offered to explain that omission. Ordinarily, as we stated in
Mendez, the failure to cite the statute at issue in the arbitration
provision itself is fatal to any claim that the waiver of the right to
enforce the statute in court is clear and explicit. (Mendez, supra,
220 Cal.App.4th at p. 546 [a broad arbitration clause and a
contractual agreement to abide by all antidiscrimination laws is
not a clear and explicit agreement to arbitrate statutory claims
under the Fair Employment and Housing Act (FEHA); “[a]t a
minimum, the [CBA] must specify the statutes for which claims
of violation will be subject to arbitration”]; accord, Vasquez,
supra, 80 Cal.App.4th at p. 436 [The CBA contains “a contractual
commitment not to discriminate on the basis of national origin,
but there is no express provision that the antidiscrimination
commitment is subject to the grievance and arbitration provisions
[of the CBA.] Nor are the ADA [Americans with Disabilities Act]
and the FEHA explicitly incorporated in the CBA. Indeed, these
statutes are not even mentioned.”]; Vasserman, supra,
8 Cal.App.5th at p. 248 [same]; see Ibarra v. UPS (5th Cir. 2012)
695 F.3d 354, 359-360 [“for a waiver of an employee’s right to a
judicial forum for statutory discrimination claims to be clear and
unmistakable, the [CBA] must, at the very least, identify the
specific statutes the agreement purports to incorporate or include
an arbitration clause that explicitly refers to statutory claims”].)
Nonetheless, as Cortez concedes, the agreement to
arbitrate claims “arising under” Wage Order 16 is clear and

Inc. (2017) 2 Cal.5th 1074, 1081.) Wage Order 16 covers “certain
on-site occupations in the construction, drilling, mining, and
logging industries.” (See Cal. Code Regs., tit. 8, § 11160.)
17
unmistakable. Although the Labor Code is not specifically
mentioned, we cannot disregard the reality that an employee may
enforce the protections of the wage order in court only by
bringing a claim under the Labor Code. (Flowers v. Los Angeles
County Metropolitan Transportation Authority (2015)
243 Cal.App.4th 66, 74 (Flowers) [there is no private right of
action to enforce wage order; employee must rely on Labor Code
sections that require compliance with the wage order to enforce
its terms]; Thurman v. Bayshore Transit Management, Inc.
(2012) 203 Cal.App.4th 1112, 1132 [same].) As the Supreme
Court observed in an analogous context, employers and
employees become subject to the Labor Code requirements for
minimum wage “only under the terms of an applicable wage
order[;] and an employee who sues [under the Labor Code] to
recover unpaid minimum wages actually and necessarily sues to
enforce the wage order.” (Martinez v. Combs (2010) 49 Cal.4th
35, 56; accord, Flowers, supra, 243 Cal.App.4th at p. 86.) To hold
that wage and hour disputes arising under Wage Order 16 are
arbitrable under the CBA only in theory, but not in practice
because they are, by necessity, brought under the Labor Code,
would result in the very absurdity courts are required to avoid.
(See generally Civ. Code, § 1638 [“[t]he language of a contract is
to govern its interpretation, if the language is clear and explicit,
and does not involve an absurdity”]; Eucasia Schools Worldwide,
Inc. v. DW August Co. (2013) 218 Cal.App.4th 176, 182
[“‘“[i]nterpretation of a contract ‘must be fair and reasonable, not
leading to absurd conclusions’”’”].)
Cortez’s causes of action for overtime pay, meal and rest
break violations (first, second and third causes of action) seek to
enforce the protections in Wage Order 16, which either mirror or
18
inform the Labor Code sections he cites to support his claims.
(Compare Lab. Code, §§ 1194, 1198, 510 (overtime), 226.7 (meal
and rest breaks) with Cal. Code Regs., tit. 8, § 11160, pars. 3
(overtime), 10 (meal periods), 11 (rest periods).)
4 Cortez’s fourth
and fifth causes of action, although purportedly based on Labor
Code sections 226, 1174 and 1174.5, expressly refer to the
requirements of Wage Order 16 and seek to enforce the reporting
and record keeping provisions of the wage order.
Cortez’s sixth cause of action for statutory penalties due for
failure to pay wages in a timely manner following his separation
or termination from employment (Lab. Code, §§ 202, 203) (sixth
cause of action), in contrast, does not arise under Wage Order 16,

4
Labor Code section 1194 provides, in part, “[A]ny employee
receiving less than the legal minimum wage or the legal overtime
compensation applicable to the employee is entitled to recover”
the balance of the unpaid wage in a civil action. Labor Code
section 1198 provides, in part, “The employment of any employee
for longer hours than those fixed by the [applicable wage] order
or under conditions of labor prohibited by the [wage] order is
unlawful.” And Labor Code section 510 identifies a minimum
rate of overtime pay. The same protections are identified in the
Wage Order 16. (See Cal. Code Regs., title 8, § 11160, par. 3A.)
Labor Code section 226.7 addresses meal and rest breaks.
Subdivision (b) provides, “An employer shall not require an
employee to work during a meal or rest or recovery period
mandated pursuant to an applicable statute, or applicable
regulation, standard or order of the [IWC]”; subdivision (c)
authorizes recovery of one additional hour of pay at the
employee’s regular rate of compensation for each work day that
the meal or rest period is not provided. Paragraphs 10 and 11 of
Wage Order 16 reiterate and supplement those Labor Code
provisions.
19
which makes no mention of payment upon the employee’s
separation from employment, much less statutory penalties for
failure to do so. Coty Bros implicitly recognizes this omission in
the wage order but insists that this claim is subject to arbitration
because it involves a “wage-related issue.” That interpretation of
the CBA sweeps too broadly. The agreement requires arbitration
of claims arising under the wage order. Cortez’s sixth cause of
action is based on a statute that is not informed by, referenced in,
or even relevant to, the wage order disputes they clearly and
unmistakably agreed to arbitrate.
Cortez’s seventh cause of action for unfair competition is
based on Doty Bros’ purported violations of the Labor Code. (See
Bus. & Prof. Code, § 17200 [unfair competition claim for unlawful
business act or practice may be premised on violation of state or
federal law]; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th
826, 839 [same].) To the limited extent that cause of action is
based on the nonarbitrable claim alleging violation of Labor Code
sections 202 and 203, that claim, too, necessarily falls outside the
agreement to arbitrate.
In sum, Cortez’s claims under the Labor Code for overtime,
meal and rest breaks and violation of record keeping provisions
(his first through fifth causes of action) arise under Wage
Order 16 and thus are within the CBA’s provision compelling
arbitration. However, his causes of action for timely payments
upon separation of employment and his unfair competition claim
based on that statutory violation (Cortez’s sixth and seventh
causes of action) do not fall within the wage order. The court
erred in compelling arbitration of those claims.
20
3. The CBA Does Not Contemplate Classwide Arbitration
The question whether an arbitration agreement authorizes
arbitration of class action claims is also a matter of contract
interpretation. Absent language in the arbitration provision
itself or extrinsic evidence establishing the parties’ agreement to
arbitrate classwide claims, only individual claims may be
arbitrated. Silence on the issue may not be construed as
agreement. (See Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.
(2010) 559 U.S. 662, 684-685 [130 S.Ct. 1758, 176 L.Ed.2d 605]
(Stolt-Nielsen) [ “a party may not be compelled under the FAA
[Federal Arbitration Act5
]to submit to class arbitration unless
there is a contractual basis for concluding that the party agreed
to do so”; agreement to authorize class-action arbitration may not
be inferred solely from the fact of the parties’ agreement to
arbitrate]; Sandquist v. Lebo Automotive, Inc. (2016) 1 Cal.5th
233, 243 [same].)
In resolving the question whether the parties agreed to
class arbitration, state law principles of contract interpretation
apply. (Nelsen v. Legacy Partners Residential, Inc. supra,
207 Cal.App.4th at p. 1128.) The fundamental rule of contract
interpretation is to give effect to the mutual intent of the parties
at the time they formed the contract. (Bank of the West v.
Superior Court (1992) 2 Cal.4th 1254, 1264; see Civ. Code,
§ 1636.) We are guided by the plain language of the agreement.
(Civ. Code, § 1639.)
The instant CBA reveals no discernible intent to permit
class arbitration. Throughout Article V’s alternative dispute

5
The parties agree the arbitration provision in the CBA is
governed by the FAA.
21
provisions, the CBA refers to the grievance or dispute of an
individual employee, not a group of employees: Paragraph 501
states, “An individual employee having a grievance or dispute
shall first attempt to adjust said grievance or dispute with the
Contractor or his representative.” Paragraph 502 provides, “If
the individual employee fails to effect a settlement of his
grievance or dispute . . . [it] may be referred to the Teamster
Craft Joint Adjustment Board established herein.” Paragraphs
507, 512 and 514.1 and 5.14.5 similarly use the singular term
“party” to refer to each side of a dispute.6
Although paragraphs
507.1, 513 and 514.3 use the plural “parties,”
7 when viewed in

6
Paragraph 507 provides, “All fees and expenses of the
Chairman shall be borne by the party against whom the
Chairman rules.” Paragraph 512 provides, “It is understood and
agreed that the procedures outlined in this grievance procedure
shall be the exclusive remedy for any violation of this Agreement,
provided the foregoing shall not deprive either party from
obtaining any injunctive relief from the courts to which he is
otherwise entitled.” Paragraph 5.14.1 also refers to “either party”
in discussing the hiring of lawyers to assist in the arbitration.
Paragraph 514.5 identifies the parties on both sides of the
dispute as the “charging party” and the “charged party.”
7
Paragraph 507.1 provides, “If there is any question as to
which is the losing party, or if a case is referred back to the
parties without decision . . . the Chairman is authorized and
requested to determine who shall pay the fees and may in such
case order a sharing of such fees.” Paragraph 513 states, “The
determination of the Teamster Craft Joint Adjustment Board are
final and binding upon the parties. There shall be NO APPEAL.”
Paragraph 514.3.1 provides, “Once a grievance is placed on the
agenda it shall be heard unless postponed by mutual consent of
both parties.”
22
context, the use of the plural in those paragraphs refers to the
two sides of the controversy, not multiple parties on the same
side of a grievance. (Foster-Gardner, Inc. v. National Union
Fire Ins. Co. (1998) 18 Cal.4th 857, 868 [“‘“language in a contract
must be construed in the context of that instrument as a whole,
and in the circumstances of that case”’”]; Bank of the West v.
Superior Court, supra, 2 Cal.4th at p. 1264 [same].)
Cortez does not dispute this interpretation of the CBA or
otherwise challenge the trial court’s determination that the
language of the CBA does not contemplate classwide arbitration.
Rather, he argues that any employer-employee contract that
prohibits classwide arbitration violates the protections for
collective action afforded employees under sections 7 and 8 of the
NLRA and is therefore invalid.8

There is currently a conflict among the United States
Courts of Appeals as to the merit of Cortez’s position. The Ninth
and Seventh Circuits have held that waivers of classwide

8
Section 7 of the NLRA states that “[e]mployees shall have
the right to self-organization, to form, join or assist labor
organizations, to bargain collectively through representatives of
their own choosing, and to engage in concerted activities for the
purpose of collective bargaining or other mutual aid or protection,
and shall also have the right to refrain from any or all such
activities except to the extent that such right may be affected by
an agreement requirement membership in a labor organization
as a condition of employment as authorized in section 158(a)(3) of
this title.” (29 U.S.C. § 157.)
Section 8(a)(1) of the NLRA states it is an unfair labor
practice for an employer “to interfere with, restrain, or coerce
employees in the exercise of the rights guaranteed in” section 7.
(29 U.S.C. § 158(a)(1).)
23
arbitration are antithetical to the NLRA’s protection of collective
activity (see Morris v. Ernst & Young, LLP (9th Cir. 2016) 834
F.3d 975, 983; Lewis v. Epic Sys. Corp. (7th Cir. 2016) 823 F.3d
1147, 1155) while other circuit courts have rejected that position
and found such waivers of class actions enforceable. (See, e.g.,
Murphy Oil USA, Inc. v. NLRB (5th Cir. 2015) 808 F.3d 1013,
1018; Sutherland v. Ernst & Young LLP (2d Cir. 2013) 726 F.3d
290, 297; Owen v. Bristol Care, Inc. (8th Cir. 2013) 702 F.3d 1050,
1052.) The United States Supreme Court recently granted
certiorari in these cases to resolve the issue. (See, e.g., Morris,
at p. 983; cert. granted sub non. Ernst & Young, LLP v. Morris
(2017) __ U.S. __ [137 S.Ct. 809, 196 L.Ed.2d 595].)
Cortez urges us to defer ruling on this question until the
United States Supreme Court decides this issue. Further delay
is unnecessary. The California Supreme Court has rejected
Cortez’s argument. (See Iskanian v. CLS Transportation, LLC
Los Angeles, supra, 59 Cal.4th at pp. 375-376 [“the NLRA’s
general protection of concerted activity, which makes no
reference to class actions,” does not bar parties to a CBA from
excluding class claims from the agreement to arbitrate].) So
must we. (Auto Equity Sales, Inc. v. Superior Court (1962)
57 Cal.2d 450, 455.)

Outcome: The appeal is dismissed. Deeming the appeal a petition for writ of mandate, the petition is granted in part. The superior court is directed to vacate its September 19, 2014 order compelling arbitration of Cortez’s individual claims and to enter a new order compelling arbitration of the first through fifth causes
of action and denying the petition to compel arbitration of the sixth and seventh causes of action. The order of proceedings is subject to the superior court’s discretion under Code of Civil Procedure section 1281.2, subdivision (c). In all other respects the petition is denied. Each party is to bear his and its own costs
in connection with this proceeding

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