Zakaryan v. Men's Wearhouse, Inc.

245 Cal. Rptr. 3d 333, 33 Cal. App. 5th 659
CourtCalifornia Court of Appeal, 5th District
DecidedMarch 28, 2019
DocketB289192
StatusPublished
Cited by15 cases

This text of 245 Cal. Rptr. 3d 333 (Zakaryan v. Men's Wearhouse, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zakaryan v. Men's Wearhouse, Inc., 245 Cal. Rptr. 3d 333, 33 Cal. App. 5th 659 (Cal. Ct. App. 2019).

Opinion

HOFFSTADT, J.

*664The Labor Code Private Attorneys General Act of 2004 (PAGA) deputizes individual employees to step *665into the shoes of our state's labor enforcement agency and sue their employers for underpaid wages and *335additional, statutorily prescribed amounts on behalf of themselves and their aggrieved coworkers. ( Lab. Code, § 2698 et seq. )1 In Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 382-392, 173 Cal.Rptr.3d 289, 327 P.3d 129 ( Iskanian ), our Supreme Court held that individual employees cannot contractually agree to arbitrate their potential PAGA claims, but may still contractually agree to arbitrate their "individual damages claims." If an employee brings a solitary PAGA claim, may a trial court split that claim-that is, may the court send the employee to arbitration (when he has agreed to it) to recover his underpaid wages but retain jurisdiction to award the additional, statutorily prescribed amounts? Our sister courts are divided on the issue: Esparza v. KS Indus., L.P. (2017) 13 Cal.App.5th 1228, 221 Cal.Rptr.3d 594 ( Esparza ) has sanctioned such an order, while Lawson v. ZB, N.A. (2017) 18 Cal.App.5th 705, 227 Cal.Rptr.3d 613 ( Lawson ) has not. Although this issue is pending before our Supreme Court in Lawson ( Lawson , review granted Mar. 21, 2018, S246711), we analyze the issue differently than Esparza or Lawson but ultimately conclude that courts may not split a solitary PAGA claim and send it to two different fora. Accordingly, we affirm the trial court's order denying the motion to compel arbitration in this case.

FACTS AND PROCEDURAL BACKGROUND

I. Facts

Arthur Zakaryan (plaintiff) started working as a store manager for defendants, The Men's Wearhouse and Tailored Brands, Inc. (collectively, The Men's Wearhouse) in November 2002. As its homophonic name suggests, the Men's Wearhouse sells men's clothing and accoutrement. Due to work performance issues, The Men's Wearhouse in early 2016 gave plaintiff the option of accepting a demotion out of management or resigning. Plaintiff opted to resign, and did so in February 2016.

By the time of his resignation, plaintiff had signed or by his conduct agreed to two different arbitration agreements with The Men's Wearhouse-one in 2006 and a second in 2015. Under the terms of the 2006 agreement, plaintiff agreed to arbitrate "any and all claims, disputes and controversies ... includ[ing] ... any [c]laim arising from [his] employment ... or its termination," but that agreement expressly excluded "collective" or "representative action[s]." Under the terms of the 2015 agreement, plaintiff agreed to arbitrate "all claims or controversies ... whether or not arising out of [his] employment (or its termination)" and to "waive any right to bring" "any *666class, collective, or representative action," but that agreement expressly excluded any PAGA claims "otherwise covered by this Agreement."

II. Procedural Background

In January 2017, plaintiff sued The Men's Wearhouse. "[O]n behalf of all aggrieved employees currently and formerly employed" as The "Men's Wearhouse store managers," plaintiff alleged a "representative action" under PAGA on the ground that The Men's Wearhouse had wrongly misclassified managers as exempt from California's laws regarding overtime pay and meal and rest breaks. This underpayment also rendered the managers' wage statements inaccurate and entitled those who had quit or been fired to "waiting time penalties" under section 203. Plaintiff prayed for "unpaid and underpaid wages *336of all aggrieved employees," the additional penalties incorporated into PAGA from more specific Labor Code provisions, prejudgment interest, attorney fees and "further and other injunctive and equitable relief."

After Esparza was decided, The Men's Wearhouse filed a motion to compel arbitration of the portion of plaintiff's PAGA claim seeking reimbursement of underpaid wages. The motion to compel was filed nearly six months after The Men's Wearhouse had answered plaintiff's complaint without raising arbitration as a defense.

Following full briefing and a hearing, the trial court denied the motion to compel. The court found Lawson more persuasive than Esparza , and in so doing rejected the notion that plaintiff's PAGA claim could be split in order to send the underpaid wages portion to arbitration.

The Men's Wearhouse filed this timely appeal.

DISCUSSION

The Men's Wearhouse challenges the trial court's refusal to order arbitration of the portion of plaintiff's PAGA claim that seeks to recover his underpaid wages. As noted above, the California courts currently disagree about a trial court's authority to order a portion of a PAGA claim to arbitration: One case says this is permissible ( Esparza , supra , 13 Cal.App.5th at p. 1234, 221 Cal.Rptr.3d 594 ), while most others have said it is not ( Lawson , supra , 18 Cal.App.5th at p. 712, 227 Cal.Rptr.3d 613 ; Williams v. Superior Court (2015) 237 Cal.App.4th 642, 649, 188 Cal.Rptr.3d 83 ( Williams v. Superior Court ); Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th 439, 448, 215 Cal.Rptr.3d 344 ; Tanguilig v. Bloomingdale's, Inc. (2016)

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245 Cal. Rptr. 3d 333, 33 Cal. App. 5th 659, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zakaryan-v-mens-wearhouse-inc-calctapp5d-2019.