Judge: Armen Tamzarian, Case: 24STCV31390, Date: 2025-04-07 Tentative Ruling

Case Number: 24STCV31390    Hearing Date: April 7, 2025    Dept: 52

Defendant Stericycle, Inc.’s Motion to Compel Arbitration and to Stay Proceedings

Defendant Stericycle, Inc. moves to compel arbitration of plaintiff Yomara Bonilla’s individual claims under the Private Attorneys General Act (PAGA) and stay the representative PAGA claims.  (See Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 662-663 (Viking River); Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1113-1114 (Adolph) [discussing arbitrable “individual” PAGA claims and nonarbitrable representative or “non-individual” claims].)

Evidentiary Objections

            Plaintiff makes two objections to the declaration of Amanda Beezley in support of this motion.  Both objections are overruled. 

            Defendant makes two objections to the declaration of Nairi Shirinian in support of plaintiff’s opposition.  Both objections are overruled.

Discussion

Plaintiff opposes this motion solely on the basis that the complaint does not assert any “individual” or “non-representative” PAGA claim.  Plaintiff framed the complaint that way.  It alleges, “Plaintiff does not seek to assert his own claim for civil penalties under PAGA as part of this Action.”  (Comp., ¶ 4.)  It further alleges, “Specifically, Plaintiff does not seek to recover Plaintiff’s 25% share of civil penalties for the particular Labor Code violations Plaintiff experienced.  Rather, this is a purely representative PAGA action wherein Plaintiff seeks to recover all civil penalties for the Labor Code violations experienced by third-party aggrieved employees (Aggrieved Employees) and the State of California’s 75% of the civil penalties for the Labor Code violations Plaintiff experienced.”  (¶ 7.)  The footer on each page also states, “PAGA Complaint – Representative Action Only.”

Defendant contends a plaintiff cannot avoid arbitration by framing a PAGA complaint to exclude any individual component.  Defendant argues that, where preemption due to the Federal Arbitration Act applies (which is not disputed here), every PAGA claim necessarily includes an individual component subject to arbitration. 

The parties identify conflicting opinions by the Court of Appeal on this subject.  When “appellate decisions are in conflict,” the trial court “can and must make a choice between the conflicting decisions.”  (Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 456.)  The court will discuss the three relevant decisions in chronological order.

First, Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533 (Balderas) reversed a trial court order striking a PAGA complaint on the basis that the plaintiff “had not filed an individual action seeking PAGA relief for herself” and therefore “lacked standing to pursue a ‘non-individual’ or representative PAGA action on behalf of other employees.”  (Id. at p. 536.)  The Court of Appeal held, “[A]n employee who does not bring an individual claim against her employer may nevertheless bring a PAGA action for herself and other employees of the company.”  (Ibid.)  The appeal did not address arbitration.

Second, Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001 (Leeper) reversed a trial court order denying a motion to compel arbitration of an “individual” PAGA claim.  The trial “court denied the motion on the basis that Leeper’s PAGA action did not allege any individual claims subject to arbitration under the parties’ arbitration agreement.”  (Id. at p. 1005.)  The Court of Appeal held, “[E]very PAGA action necessarily includes an individual PAGA claim.”  (Ibid.)  The court reached that conclusion “based on the unambiguous language in [Labor Code] section 2699, subdivision (a).”  (Id. at p. 1009.) 

The PAGA statute “describes a PAGA claim as ‘a civil action brought by an aggrieved employee on behalf of the employee and other current or former employees.’ ”  (Leeper, supra, 107 Cal.App.5th at p. 1009.)  The court reasoned, “The unambiguous and ordinary meaning of the word ‘and’ is conjunctive, not disjunctive.  Thus, the clause ‘on behalf of the employee and other current or former employees’ [citation] means that the action described has both an individual claim component (plaintiff’s action on behalf of the plaintiff himself or herself) and a representative component (plaintiff’s action on behalf of other aggrieved employees).”  (Ibid., italics in original.)  The court further noted that “Balderas did not have occasion to discuss, did not discuss, and its holding does not address, whether a plaintiff may carve out an individual PAGA claim from a PAGA action.”  (Id. at p. 1012.) 

Finally, Rodriguez v. Packers Sanitation Services Ltd., LLC (2025) 109 Cal.App.5th 69 (Rodriguez) disagreed with Leeper (id. at pp. 78-81 & fn. 5) in affirming an order denying the defendant’s motion to compel arbitration.  The Court of Appeal held, “If the plaintiff’s complaint asserts no individual PAGA claim, there is no existing dispute over his or her right to obtain an individual PAGA remedy, and he or she cannot properly be ordered to arbitrate such a claim.  Therefore, if on a motion to compel arbitration the court examines the complaint and determines it does not allege an individual PAGA claim, the court should decline to compel any such claim to arbitration.”  (Id. at p. 80.)  

Rodriguez disagreed with Leeper in multiple ways.  It criticized Leeper’s analysis of Balderas and “question[ed] Leeper’s interpretation of Labor Code section 2699, subdivision (a).”  (Rodriguez, supra, 109 Cal.App.5th at p. 81, fn. 5.)  But primarily, Rodriguez reasoned that “the Leeper court appeared to insert into the plaintiff’s complaint a missing claim”: an individual PAGA claim.  (Id. at p. 80.)  The court criticized Leeper for “construing Labor Code section 2699, subdivision (a) as requiring an individual PAGA claim, and not only declaring that the complaint ‘necessarily’ included such a claim but also requiring the plaintiff to arbitrate a claim she had never chosen to assert.”  (Ibid.)  Thus, assuming Leeper correctly interpreted the PAGA statute, Rodriguez held that interpretation “means that a PAGA complaint should contain an individual PAGA claim, not that it does.”  (Id. at p. 79, italics in original.) 

The court finds Leeper more persuasive than Rodriguez.  Plaintiff may not “carve out an individual PAGA claim from a PAGA action.”  (Leeper, supra, 107 Cal.App.5th at p. 1012.)  Defendant is entitled to arbitrate that portion of plaintiff’s action. 

In addition to Leeper’s holding based on statutory interpretation, there is another reason every PAGA claim includes an individual dispute potentially subject to arbitration: whether the plaintiff meets the requirements for standing under PAGA.  “ ‘Standing is a threshold issue necessary to maintain a cause of action, and the burden to allege and establish standing lies with the plaintiff.’ ”  (People ex rel. Becerra v. Superior Court (2018) 29 Cal.App.5th 486, 495.)  “Generally, ‘[a] litigant’s standing to sue is a threshold issue to be resolved before the matter can be reached on the merits.’ ”  (Buckland v. Threshold Enterprises, Ltd. (2007) 155 Cal.App.4th 798, 813.)  “Standing requirements vary from statute to statute, and must be assessed in light of intent of the statute at issue.”  (Ibid.) 

In PAGA claims, “standing” requires the plaintiff to “be an ‘aggrieved employee’ — that is, (1) ‘someone “who was employed by the alleged violator” ’ and (2) ‘ “against whom one or more of the alleged violations was committed.” ’ ”  (Adolph, supra, 14 Cal.5th at p. 1114.)  Rodriguez acknowledges that “under Adolph [a plaintiff] is required to allege that he is an aggrieved employee in order to meet the standing requirements for PAGA nonindividual claims.”  (Rodriguez, supra, 109 Cal.App.5th at pp. 76-77.)  If the plaintiff is not an aggrieved employee, he or she has no standing to bring the PAGA action, and the action must fail.  And whether the plaintiff is an aggrieved employee is a dispute often included in the scope of the parties’ arbitration agreement. 

Here, the parties’ contract provides, “[T]his Agreement applies to any dispute arising out of or related to Employee’s … application or selection for employment, employment, and/or termination of employment with Stericycle, Inc.”  (Beezley Decl., Ex. 7, § 1.)  “[T]his Agreement is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law or before a forum other than arbitration, including without limitation, to disputes arising out of or relating to the application for employment, background checks, privacy, employment relationship, … compensation, classification, minimum wage, expense reimbursement, overtime, breaks and rest periods, or retaliation, discrimination, or harassment and claims arising under” numerous statutes, “and state statutes or regulations, if any, addressing the same or similar subject matters, and all other federal or state legal claims (including without limitation torts) arising out of or relating to your application, selection, employment, or the termination of employment.”  (Ibid.)

Plaintiff’s complaint alleges defendant violated numerous provisions of the Labor Code.  (Comp., ¶¶ 10-34.)  It alleges, for example, that defendant failed to: “pay overtime wages” (¶ 10), pay “minimum wages for all hours … worked” (¶ 11), provide rest and meal periods (¶¶ 12-15), pay accrued “vacation time owed upon separation of employment” (¶ 20), and “reimburse employees” for expenses (¶ 21).  To have standing to bring a PAGA action, plaintiff must have personally suffered at least one of these violations.  (Adolph, supra, 14 Cal.5th at p. 1114.)  Establishing that constitutes a “dispute arising out of or related to” plaintiff’s employment with defendant or “disputes arising out of or relating to the … employment relationship, … compensation, … minimum wage, expense reimbursement, overtime, breaks and rest periods” subject to binding arbitration.  (Beezley Decl., Ex. 7, § 1.) 

Even if plaintiff seeks to waive the right to collect PAGA penalties as in Balderas and Rodriguez, determining whether defendant violated plaintiff’s rights under the Labor Code is both (a) necessary for plaintiff to have standing in this action, and (b) an arbitrable “dispute” under the parties’ arbitration agreement.  Under Viking River and Adolph, defendant is therefore entitled to compel arbitration of those disputes pursuant to the parties’ contract.

Disposition

            Defendant Stericycle, Inc.’s motion to compel arbitration and stay proceedings is granted.  The court hereby orders plaintiff Yomara Bonilla to arbitrate individual PAGA claims and the controversy over whether plaintiff is an “aggrieved employee” under PAGA.  The court hereby stays the entire action pending resolution of the arbitration proceeding.