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Brown v. Ralphs Grocery Co.

Brown v. Ralphs Grocery Co.

Court of Appeal of California, Second Appellate District, Division Five

July 12, 2011, Filed

B222689

Opinion

 [**856]  MOSK, J.—

INTRODUCTION

Plaintiff and respondent Terri Brown (plaintiff) brought a class action and representative action under the Labor Code Private Attorneys General Act of 2004 (the PAGA)1 against her employers, defendants and appellants Ralphs Grocery Company and The Kroger Co. (defendants), for alleged violations of the Labor Code. Defendants appeal from the trial court's order denying their petition to compel plaintiff to submit her individual causes of action to arbitration as required under her employment agreement.

We hold that the trial court erred in ruling that under Gentry v. Superior Court (2007) 42 Cal.4th 443 [64 Cal. Rptr. 3d 773, 165 P.3d 556] (Gentry), the class action waiver provision2 in plaintiff's employment agreement was unenforceable because that ruling was not supported by substantial evidence. We also hold that the recent decision of the United States Supreme Court in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. ___ [179 L. Ed. 2d 742, 131 S.Ct. 1740] (AT&T), holding that California decisional law invalidating class action waivers in consumer arbitration agreements is preempted by the Federal Arbitration Act (9 U.S.C. § 1 et seq.; FAA), does not apply to representative actions under the PAGA, and thus the trial court correctly ruled that the waiver of plaintiff's right to pursue a representative action under the PAGA was not enforceable under California law. We remand the case for the trial court to determine whether to sever the unenforceable provision in the arbitration agreement waiving plaintiff's  [***3] right to pursue a PAGA representative action or whether to refuse to enforce the entire arbitration agreement or parts thereof.

FACTUAL AND PROCEDURAL BACKGROUND

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197 Cal. App. 4th 489 *; 128 Cal. Rptr. 3d 854 **; 2011 Cal. App. LEXIS 902 ***; 18 Wage & Hour Cas. 2d (BNA) 1812

TERRI BROWN, Plaintiff and Respondent, v. RALPHS GROCERY COMPANY et al., Defendants and Appellants.

Subsequent History: Modified by Brown v. Ralphs Grocery Co., 2011 Cal. App. LEXIS 940 (Cal. App. 2d Dist., July 20, 2011)

Rehearing denied by Terri Brown v. Ralphs Grocery Co., 2011 Cal. App. LEXIS 1053 (Cal. App. 2d Dist., July 29, 2011)

Review denied by Brown (Terri) v. Ralphs Grocery Company, 2011 Cal. LEXIS 10809 (Cal., Oct. 19, 2011)

US Supreme Court certiorari denied by Ralphs Grocery Co. v. Brown, 566 U.S. 937, 132 S. Ct. 1910, 182 L. Ed. 2d 771, 2012 U.S. LEXIS 2934 (Apr. 16, 2012)

Decision reached on appeal by Brown v. Ralphs Grocery Co., 2014 Cal. App. Unpub. LEXIS 1613 (Cal. App. 2d Dist., Mar. 6, 2014)

Decision reached on appeal by, Remanded by Brown v. Ralphs Grocery Co., 2018 Cal. App. LEXIS 983 (Cal. App. 2d Dist., Oct. 31, 2018)

Prior History:  [***1] APPEAL from an order of the Superior Court of the County of Los Angeles County, No. BC423782, Richard E. Rico, Judge.

Disposition: Reversed and remanded with directions.

CORE TERMS

arbitration, class action, arbitration agreement, unconscionable, representative action, trial court, unenforceable, employees, invalid, preempted, violations, waivers, parties, aggrieved employee, civil penalty, consumer, severed, disputes, waiver provision, agencies, rights, state law, waived, petition to compel arbitration, cause of action, overtime, cases, private attorney general, substantial evidence, refuse to enforce

Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Arbitrability, Labor & Employment Law, Wage & Hour Laws, Remedies, Class Actions, Scope & Definitions, Overtime & Work Periods, Civil Procedure, Class Actions, Prerequisites for Class Action, General Overview, Appeals, Standards of Review, Pretrial Matters, Judicial Review, Federal Arbitration Act, Contracts Law, Defenses, Public Policy Violations, Constitutional Law, Supremacy Clause, Federal Preemption, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Contract Interpretation, Severability