Judge: Melvin D. Sandvig, Case: 24CHCV03768, Date: 2025-06-04 Tentative Ruling

Case Number: 24CHCV03768    Hearing Date: June 4, 2025    Dept: F47

Dept. F47

Date: 6/4/25

Case #24CHCV03768

MOTION TO COMPEL ARBITRATION

Motion filed on 12/3/24.

MOVING PARTY: Defendants Valencia H. Imports, Inc., Vince Wiese Chevrolet, Inc. and Terry York Motor Cars, Ltd.

RESPONDING PARTY: Plaintiff Mike Altieri, on behalf of the State of California, as a private attorney general

NOTICE: ok

RELIEF REQUESTED: An order compelling Plaintiff Mike Altieri’s individual PAGA claims to individual arbitration and staying Plaintiff’s non-individual PAGA claims.

RULING: The motion is granted. 

SUMMARY OF FACTS & PROCEDURAL HISTORY

On 10/16/24, Plaintiff Mike Altieri, on behalf of the State of California, as a private attorney general (Plaintiff), filed this PAGA (Private Attorney General Act) action against Defendants Valencia H. Imports, Inc., Vince Wiese Chevrolet, Inc. and Terry York Motor Cars, Ltd. (Defendants) for Civil Penalties Pursuant to Labor Code § 2699, et seq. for violations of Labor Code §§ 201, 202, 203, 204, 210, 218, 221, 226(a), 226.7, 227.3, 246, 510, 512, 558(a)(1)(2), 1194, 1197, 1197.1, 1198, 2100, 2802, California Code of Regulations, Title 8, Section 11040, Subdivision 5(A)-(B), California Code of Regulations, Title 8, Section 1 1070(14) (Failure to Provide Seating), and the applicable Wage Order(s).

The undisputed evidence shows that Defendant Valencia H. Imports, Inc. never employed Plaintiff.  (See Cabrera Decl. ¶4; Opposition, generally).  Additionally, the evidence establishes that Defendant Vince Wiese Chevrolet employed Plaintiff as a Sales Associate at Chevrolet Valencia from 11/24/20 through 3/31/22 and that as part of the employment Plaintiff signed an arbitration agreement.  (Cabrera Decl. ¶¶4, 6-11, Ex.A).  The evidence also shows that in March of 2022, Defendant Terry York Motor Cars approved Plaintiff’s transfer request to its Jaguar Land Rover Woodland Hills location at which Plaintiff worked from 4/1/22 through 2/7/24.  (Id. ¶5).  On 3/16/22, Plaintiff signed an arbitration agreement with Defendant Terry York Motor Cars.  (Cabrera Decl. ¶11, Ex.B).

The Arbitration Agreements provide that “[b]oth employee signing below (the “Employee”) and the Company (as defined below) agree that any claim, dispute, and/or controversy between them which would otherwise require or allow resort to any court . . . shall be resolved through mandatory, neutral, binding arbitration on an individual basis only.”  (See Cabrera Decl. ¶¶4-5, Ex.A, B).  The term “Company” for purposes of the Arbitration Agreements includes the entity Plaintiff “is employed by, together with its parents, subsidiaries, affiliates, predecessors, successors and assigns, and each of their respective owners, directors, officers, managers, employees, vendors, and agents.”  Id.  Additionally, the Arbitration Agreements provide, in relevant part:

“This Agreement covers all theories and disputes, whether styled as an individual claim, class action claim, private attorney general claim, or otherwise . . . This Agreement shall not be construed to allow or permit the consolidation or joinder of other claims or controversies involving any other allegedly aggrieved parties, and no matter whatsoever will proceed as a class action, collective action, private attorney general action or any similar representative action.

[. . .]

Class-collective Action Waiver. Employee understands and acknowledges that the terms of this Agreement include a waiver of any substantive or procedural rights that Employee may have to bring or participate in an action on a class, collective, private attorney general, representative or other similar basis. This Class-Collective Action Waiver does not take away or restrict the rights of Employee to pursue Employee’s own claims, but only requires that any such claims be pursued in Employee’s own individual capacity, rather than on a class, collective, private attorney general, representative or similar basis.

[. . .]

BY SIGNING THIS AGREEMENT, I ATTEST TO THE FACT THAT I HAVE READ, UNDERSTAND, AND AGREE TO BE LEGALLY BOUND BY ALL OF THE ABOVE TERMS. I FURTHER UNDERSTAND THAT THIS AGREEMENT REQUIRES ME TO ARBITRATE ON AN INDIVIDUAL BASIS ANY AND ALL DISPUTES THAT ARISE OUT OF MY EMPLOYMENT, UNLESS EXPRESSLY EXCLUDED IN THIS AGREEMENT.”

(Cabrera Decl., Ex.A, B).

Plaintiff refused Defendants’ request to submit his individual PAGA claims to arbitration on the ground that the complaint does not include individual PAGA claims and the representative PAGA claims are not subject to arbitration.  (Mushamel Decl. ¶¶3-4, Ex.2-3)

On 12/3/24, Defendants filed and served the instant motion seeking an order compelling Plaintiff’s individual PAGA claims to individual arbitration and staying Plaintiff’s non-individual PAGA claims.  Plaintiff has opposed the motion and Defendants have filed a reply to the opposition. 

ANALYSIS

Based on the language in the Arbitration Agreements, they apply to “all disputes” arising out of or relating to Plaintiff’s employment with Defendants.  In this action, Plaintiff alleges that he suffered labor code violations based on activities that allegedly occurred in the workplace during his employment.  (See Complaint ¶42). 

As noted above, Plaintiff does not dispute entering the subject Arbitration Agreements.  Nor does Plaintiff argue that the Arbitration Agreements are procedurally unconscionable.  Rather, Plaintiff contends that he is not required to arbitrate the claims in this action because the agreement contains a wholesale PAGA waiver which renders the Arbitration Agreements unenforceable.  Additionally, Plaintiff argues that because the complaint alleges that Plaintiff is not suing in his individual capacity and is proceeding solely under the PAGA, on behalf of the State of California for all aggrieved employees, including himself and other aggrieved employees, his claims are not subject to arbitration.  (See Complaint ¶4).  Further, Plaintiff contends that even if the Court finds that he is asserting individual claims that must be arbitrated, the representative PAGA action should not be stayed.  The Court finds Plaintiff’s arguments are without merit and Plaintiff’s individual PAGA claims are subject to arbitration under both federal and California law.  See 9 U.S.C. §§1-4; CCP 1281.2.  

Even if the Arbitration Agreements are deemed to include wholesale waivers of PAGA claims, the severability clauses in the Arbitration Agreements cure any defects.  See Viking River Cruises, Inc. (2022) 596 U.S. 639, 662 (holding that although an arbitration agreement’s waiver of representative claims was invalid, “Viking was entitled to enforce the agreement insofar as it mandated arbitration of Moriana’s individual PAGA claim.”).  Here, the Arbitration Agreements expressly provide: 

“Severability and Related Matters. If any portion of this Agreement is deemed invalid or unenforceable, it shall not invalidate the other provisions of this Agreement subject to this provision. If any portion of the Class-Collective Action Waiver is deemed invalid or unenforceable, and certain claims are determined not to be subject to the Class-Collective Action Waiver (“Exempt Claim” or “Exempt Claims”), then the Parties shall proceed as follows: (i) the Parties shall arbitrate on an individual basis any non-Exempt Claim to the maximum extent permitted by law; and (ii) any Party seeking to bring or maintain any Exempt Claim shall do so in court. Employee and Company agree that litigation of any Exempt Claim should be stayed pending final resolution of all non-Exempt Claims in arbitration so that litigation of the Exempt Claim(s) does not disrupt the arbitration proceedings or render them ineffective; no Party shall oppose the other Party’s request for a stay. The Parties agree that staying any such litigation pending resolution of individual arbitration will increase efficiencies, decrease costs, and further the interests of justice. As an example and for clarity, if Employee brings a putative class action and claims under the Private Attorneys General Act of 2004 (“PAGA”), and a court determines that the Class-Collective Action Waiver is invalid or unenforceable as to claims under PAGA but not otherwise, Employee shall bring all claims other than the PAGA claims in an individual arbitration; the PAGA claim shall be stayed pending final resolution of the claims subject to individual arbitration, and no Party shall oppose a request to the court for such a stay by the other Party. Under no circumstances shall this Agreement be construed to allow arbitration on a class, collective, private attorney general, representative or other similar basis.”

(Cabrera Decl., Ex.A, B).  

Contrary to Plaintiff’s assertion, this PAGA action necessarily includes Plaintiff’s individual PAGA claims that are subject to arbitration.  It has been held that the language of Labor Code 2699(a) establishes that any PAGA action necessarily includes both an individual PAGA claim and a representative PAGA claim.  See Leeper (2024) 107 CA5th 1001, 1009.  The Leeper Court explained that Balderas (2024) 101 CA5th 533, relied on by Plaintiff, “addresses only PAGA standing issues” and “did not discuss, and its holding does not address, whether a plaintiff may carve out an individual PAGA claim from a PAGA action.”  See Leeper, supra at 1012.  Similarly, Rodriguez v. Packers Sanitation Services LTD., LLC (2025) 109 CA5th 69, also relied on by Plaintiff refused to decide whether it agrees with Leeper’s decision that individual PAGA claims are a necessary component of a PAGA action.  See Rodriguez, supra at 79-80.  However, more recent decisions have agreed with the holding in Leeper that all PAGA actions necessarily contain individual PAGA claims.  See Williams (2025) 331 Cal.Rptr. 877, 885 (110 CA5th 932). 

Plaintiff’s reliance on Balderas, supra, is misplaced as Plaintiff’s standing under PAGA is not at issue in this motion.  To establish standing to bring a PAGA claim, Plaintiff must be an “aggrieved employee.”  Labor Code 2699(a).  An aggrieved employee is an employee who has “personally suffered each of the violations alleged” during the statute of limitations period.  Labor Code 2699(c)(1).  A plaintiff cannot pursue a PAGA claim on behalf of only “other current or former employees” without also pursuing such claim on behalf of him/herself.  Labor Code 2699(a).  California state law does not recognize the existence of an individual PAGA claim.  See Viking River Cruises, Inc., supra at 649.  It is only through an arbitration agreement and federal preemption under the Federal Arbitration Act that a PAGA claim can be bifurcated into individual and non-individual claims, i.e., penalties as to the plaintiff and penalties as to other employees.   Id. at 662; Adolph v. Uber Technologies, Inc. (2023) 14 Cal. 5th 1104, 1119.  Therefore, Plaintiff may only bring a PAGA claim as the state’s designated proxy, suing on behalf of all affected employees, including himself.  See Arias (2009) 46 C4th 969, 986; Reyes (2011) 202 CA4th 1119, 1123.

While Plaintiff alleges that he “is not suing in his individual capacity” and “is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees,” Plaintiff also alleges that he is an “‘aggrieved employee’ acting as a private attorney general under [PAGA].”  (See Complaint p.2:1-3, ¶4).  Therefore, the complaint necessarily includes Plaintiff’s individual claims as an aggrieved employee which must be determined in arbitration.  In other words, if Plaintiff does not have individual claims, he lacks standing to bring the PAGA action as an aggrieved employee.  The relevant question for purposes of resolving a motion to compel arbitration is whether the complaint “assert[s] an individual PAGA claim, not whether it should include such a claim.”  See Rodriguez, supra at 81. 

As contemplated by the Arbitration Agreements and applicable law, this action is stayed pending the conclusion of the arbitration.  See Adolph, supra at 1123-1126; CCP 1281.4; (Cabrera Decl., Ex.A, B).

CONCLUSION

The motion is granted.  Plaintiff Mike Altieri’s individual PAGA claims are ordered to arbitration and this action as to Plaintiff’s non-individual PAGA claims is stayed pending the resolution of the arbitration.