Rebolledo v. Tilly’s: Court Properly Denied Arbitration Where Agreement Excluded Statutory Labor Code Claims from its Scope

In Rebolledo v. Tilly’s Inc. (8/6/14) --- Cal.App.4th ---, the plaintiff filed a putative class action and representative PAGA action alleging a number of wage and hour violations. The defendants moved to compel arbitration and dismiss class claims. The trial court denied the motion, and the defendants appealed.

The Court of Appeal affirmed, holding as follows:

The defendants' 2001 arbitration agreement expressly excluded from its scope "any matter within the jurisdiction of the California Labor Commissioner." Plaintiff's statutory wage claims fell within the jurisdiction of the Labor Commissioner, who "may enforce the provisions of [the Labor Code] and all labor laws of the state the enforcement of which is not specifically vested in any other officer, board or commission." Slip op. at 12-16.

The Court rejected the defendant's argument that the arbitration agreement intended to exclude only the claims actually filed before the Labor Commissioner, rather than any claims that could have been filed before the Labor Commissioner. If the defendants had intended to exclude only those claims actually filed before the Labor Commissioner, it could have said so in the operative arbitration agreement. Slip op. at 16-22.

To the extent that the defendants' 2005 arbitration agreement modified the terms of the 2001 arbitration agreement, such modification was not effective because the 2001 document stated that it could be modified only with the signatures of the President, Senior Vice President and Director of Human Resources. The defendants did not provide evidence that all three such executives executed the 2005 document and they could not enforce it. Slip op. at 22-26.

The opinion is available here.