Jarboe v. Hanlees Auto Group

Filed 8/14/20 (opinion on rehearing)
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

THOMAS JARBOE,
Plaintiff and Respondent,
A156411
v.
HANLEES AUTO GROUP et al., (Alameda County
Super. Ct. No. RG17887089)
Defendants and Appellants.

I. INTRODUCTION
Plaintiff Thomas Jarboe 1 was hired by DKD of Davis, Inc., doing
business as Hanlees Davis Toyota (DKD of Davis). Shortly after he began
working, Jarboe was transferred to Leehan of Davis, Inc., doing business as
Hanlees Chrysler Dodge Jeep Ram Kia (Leehan of Davis). Following his
termination at Leehan of Davis, Jarboe brought this wage and hour action
individually and on behalf of a putative class against the Hanlees Auto Group
(Hanlees), its 12 affiliated dealerships, including DKD of Davis and Leehan
of Davis, and three individual defendants, Dong K. Lee, Kyong S. Han, and
Dong I. Lee (collectively defendants). Defendants moved to compel
arbitration based on an employment agreement between Jarboe and DKD of
Davis. The trial court granted the motion as to 11 of the 12 causes of action

1Following various amendments and dismissals, Jarboe replaced
Richard Parr as the named plaintiff in the second amended complaint, which
is operative complaint on appeal.

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against DKD of Davis, but denied the motion as to the other defendants. The
trial court also allowed Jarboe’s claim under the Private Attorneys General
Act of 2004 (PAGA), Labor Code section 2698 et seq. to proceed in court
against all defendants. The trial court refused to stay the causes of action
allowed to proceed in litigation pending arbitration of Jarboe’s claims against
DKD of Davis. (See Code Civ. Proc., § 1281.4).
Hanlees, its affiliated dealerships, and the individual defendants
contend they are entitled to enforce the agreement to arbitrate between
Jarboe and DKD of Davis as third party beneficiaries of Jarboe’s employment
agreement or under the doctrine of equitable estoppel. The record fails to
support either theory. Neither did the trial court err in failing to stay the
litigation under Labor Code section 1281.4. Accordingly, we affirm.
II. BACKGROUND
Hanlees is a group of automobile dealerships in Northern California.
The dealerships function as separate corporate entities. 2 Three individual
defendants own the Hanlees group (individual owners).
As part of the hiring process, Jarboe was required to sign two separate
agreements, each containing an arbitration provision (Arbitration

2 The individual dealerships are: Hanlees Davis, Inc., doing business
as (dba) Hanlees Davis Toyota; Hanlees Freemont, Inc., dba Hanlees
Freemont Hyundai; Hanlees Hilltop, Inc., dba Hanlees Hilltop Toyota;
Hanlees Napa, Inc., dba Hanlees Napa Subaru and Volkswagen; Hanlees
Seven, Inc., dba Hanlees Hilltop Hyundai; DKD of Napa, Inc., dba Hanlees
Chrysler Dodge Jeep Ram of Napa; DKD of Hilltop, Inc., dba Hilltop Buick
GMC; Dohan, Inc., dba Hanlees Chevrolet; Leehan, Inc., dba Hanlees Hilltop
Nissan; LHN, Inc., dba Hanlees Hilltop Volkswagen; Leehan of Davis, Inc.,
dba Hanlees Chrysler Dodge Jeep Ram Kia; and DKD of Davis, Inc., dba
Hanlees Davis Toyota.

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Agreements) 3. Both agreements were form contracts offered on a non-
negotiable, take-it or leave it basis, with little or no time for Jarboe to review
them.
The first agreement, electronically signed by Jarboe on August 4, 2017,
is entitled “Applicant Statement and Agreement” (Application). The
Application is one page, and consists of six paragraphs, all in identical and
small—nearly impossible to read—font. None of the six paragraphs is
labeled or titled, in boldface or otherwise. The last sentence of the first
paragraph provides: “I hereby authorize the Company with which I have
applied for employment to share my Application for Employment with other
affiliated companies/employers, and hereby agree that all terms, conditions
and/or agreements contained in this Applicant’s Statement and Agreement
. . . shall be enforceable by me and by such other companies/employers . . .,
even though I have not signed a separate Applicant’s Statement and
Agreement for those other companies/employers.” Nowhere in the
Application are the terms “Company,” “companies,” “affiliated companies” or
“employers” defined.
The fourth paragraph of the Application refers to arbitration. This
paragraph is almost 35 lines and ends with these three sentences: “If CCP
§ 1284.2 conflicts with other substantive statutory provisions or controlling
case law, the allocation of costs and arbitrator fees shall be governed by said
statutory provisions or controlling case law instead of CCP § 1284.2. Both
the Company and I agree that any arbitration proceeding must move forward
under the Federal Arbitration Act (9 U.S.C. §§ 3–4) even though the claims
may also involve or relate to parties who are not parties to the arbitration

We refer to the Arbitration Agreements collectively. Where
3

necessary to our analysis, we will differentiate among the agreements as the
“Application” and “Employment Agreement.”

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agreement and/or claims that are not subject to arbitration; thus, the court
may not refuse to enforce this arbitration agreement and may not stay the
arbitration proceeding despite the provisions of California Code of Civil
Procedure § 1281.2(c). I UNDERSTAND BY AGREEING TO THIS
BINDING ARBITRATION PROVISION, BOTH I AND THE COMPANY
GIVE UP OUR RIGHTS TO TRIAL BY JURY.”
The second agreement, which Jarboe signed in ink on August 10, 2017,
is entitled “Agreements” and is between DKD of Davis, as the named
“Company” and Jarboe as the named “Employee” (Employment Agreement).
The Employment Agreement contains two boldfaced paragraphs, the first of
which is entitled “At Will Employment Agreement.” This first paragraph
concludes with the following advisement: “This agreement is the entire
agreement between the Company and the employee regarding the rights of
the Company or employee to terminate employment with or without good
cause and this agreement takes the place of all prior and contemporaneous
agreements, representations, and understandings of the employee and the
Company.” The second paragraph is entitled “Binding Arbitration
Agreement.” It is 43 lines, without indentation, included within which is a
sentence that is alone 11 lines. 4

4 The sentence reads as follows: “Because of the mutual benefits (such
as possible reduced expense and possible increased efficiency) which private
binding arbitration can provide both the Company and myself, I and the
Company both agree that any claim, dispute, and/or controversy that either
party may have against one another (including, but not limited to, any claims
of discrimination and harassment, whether they be based on the California
Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964,
as amended, as well as all other applicable state or federal laws or
regulations) which would otherwise require or allow resort to any court or
other governmental dispute resolution forum between myself and the
Company (or its owners, directors, officers, managers, employees, agents, and

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 Jarboe worked at Hanlees Toyota for approximately one month before
he was transferred to Hanlees Kia in September 2017, where he worked until
his termination in January 2018. The compensation reports Jarboe received
while working at Hanlees Kia referred to his employer as “Leehan of Davis,
Inc dba Hanlees [Chrysler Dodge Jeep Ram Kia].”
After he was terminated in 2018, Jarboe filed this putative class action
against Hanlees, its 12 affiliated dealerships, and the three individual
owners, alleging numerous Labor Code violations, including: failure to
provide meal and rest periods; failure to pay overtime compensation; failure
to pay for all hours worked; and failure to pay for waiting time compensation.
In addition to various tort claims, including fraud and conversion, the
complaint alleges an unfair competition claim, as well as a PAGA claim. All
but one cause of action are asserted against “All Defendants” without
differentiation. The fifth cause of action (failure to timely pay all earned
wages in violation of Lab. Code, § 204) is alleged solely against the Hanlees
group. The complaint seeks damages and injunctive relief, as well as civil
penalties under the PAGA.
Defendants moved to stay the action and compel arbitration. The court
determined that there was an enforceable arbitration agreement, finding
evidence that Jarboe electronically signed the Application and ink signed the

parties affiliated with its employee benefit and health plans) arising from,
related to, or having any relationship or connection whatsoever with my
seeking employment with, employment by, or other association with the
Company, whether based on tort, contract, statutory, or equitable law, or
otherwise[] (with the sole exception of claims arising under the National
Labor Relations Act which are brought before the National Labor Relations
Board, claims for medical and disability benefits under the California
Workers’ Compensation Act, and Employment Development Department
claims)[,] shall be submitted to and determined exclusively by binding
arbitration.”

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Employment Agreement. While the Employment Agreement was
procedurally unconscionable it was not substantively unconscionable. Except
for Jarboe’s individual claims against DKD of Davis, the court denied the
motion to compel. The court determined that the defendants failed to
establish that the Employment Agreement applied to entities other than the
named “Company”: DKD of Davis. The court also determined that Jarboe’s
PAGA cause of action could proceed in court because an employee “bringing a
PAGA action . . . is not acting on his or her own behalf, but on behalf of the
state and the state is not bound by the employee’s prior agreement, including
any waiver of his right to bring a representative action.” The court denied
defendants’ motion to stay the PAGA claim pending completion of the
arbitration of Jarboe’s private claims.
III. DISCUSSION
A. Standards of Review
On appeal from an order denying a petition to compel arbitration, we
review the trial court’s factual determinations under the substantial evidence
standard, and we review the legal issues independently. (Duick v. Toyota
Motor Sales, U.S.A., Inc. (2011) 198 Cal.App.4th 1316, 1320; Provencio v.
WMA Securities, Inc. (2005) 125 Cal.App.4th 1028, 1031.) Specifically, we
independently consider the question of whether and to what extent a
nonsignatory may enforce an arbitration agreement. (Molecular Analytical
Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 708; DMS
Services, LLC v. Superior Court (2012) 205 Cal.App.4th 1346, 1352 (DMS
Services).)
Although an order denying a stay of proceedings is not generally
appealable, it is reviewable on appeal from an order denying arbitration
because the denial of stay affects the order appealed from and substantially

6
affects the rights of the appellant. (J.H. Boyd Enterprises, Inc. v. Boyd (2019)
39 Cal.App.5th 802, 811–812.) A trial court’s decision whether to stay an
action at law when a controversy has been ordered to arbitration is reviewed
for an abuse of discretion. (See Cardiff Equities, Inc. v. Superior Court (2008)
166 Cal.App.4th 1541, 1548.)
B. The Trial Court Correctly Refused to Compel Arbitration
Defendants contend that the trial court erred by concluding the
arbitration provision in the Employment Agreement was limited to its
signatories. Defendants argue that Hanlees, its affiliated dealerships, and
the individual owners were entitled to compel arbitration either under the
terms of the agreement, as third party beneficiaries or under the theory of
equitable estoppel.
1. Legal Principles
Under federal and state law, a strong public policy favors arbitration
and seeks to ensure “ ‘private agreements to arbitrate are enforced according
to their terms.’ ” (Stolt-Nielsen S.A. v. AnimalFeeds Internat. Corp. (2010) 559
U.S. 662, 664; see Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.)
However, “ ‘ “there is no policy compelling persons to accept arbitration of
controversies which they have not agreed to arbitrate . . . .” ’ ” (Victoria v.
Superior Court (1985) 40 Cal.3d 734, 744; accord, Cohen v. TNP 2008
Participating Notes Program, LLC (2019) 31 Cal.App.5th 840, 858–859
(Cohen); Jones v. Jacobson (2011) 195 Cal.App.4th 1, 17 (Jones).)
“ ‘[A]rbitration is a matter of contract and a party cannot be required to
submit to arbitration any dispute which he [or she] has not agreed so to
submit.’ ” (AT&T Technologies. v. Communications Workers (1986) 475 U.S.
643, 648; Cohen, at pp. 855, 857–858.)

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 “The United States Supreme Court has stated that ‘. . . the first task of
a court asked to compel arbitration of a dispute is to determine whether the
parties agreed to arbitrate that dispute.’ (Mitsubishi Motors v. Soler Chrysler-
Plymouth (1985) 473 U.S. 614, 626.)” (Cheng-Canindin v. Renaissance Hotel
Associates (1996) 50 Cal.App.4th 676, 683.) “The performance of this duty
necessarily requires the court to examine and, to a limited extent, construe
the underlying agreement.” (Freeman v. State Farm Mutual Auto. Ins. Co.
(1975) 14 Cal.3d 473, 480.) “It is, of course, possible for the parties to agree
that the arbitrator may determine the scope of his authority. ‘The
arbitrability of a dispute may itself be subject to arbitration if the parties
have so provided in their contract.’ [Citation.] Even then, it is necessary for
the court to examine the contract to ascertain whether the parties ‘have so
provided.’ [Citations.]” (Ibid.) Contractual language empowering the
arbitrator to determine arbitrability must be clear and unmistakable.
(Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444, 452 (Green Tree);
AT & T Technologies, Inc. v. Communications Workers (1986) 475 U.S. 643,
649; United Public Employees v. City and County of San Francisco (1997) 53
Cal.App.4th 1021, 1026.)
Here, there is no clear and unmistakable language that empowers the
arbitrator to determine whether a valid agreement to arbitrate exists.
Accordingly, as the reviewing court, we will make this determination.
Hanlees’ citation to Green Tree does not change our conclusion.
In Green Tree, an arbitration clause in a contract between a lender and its
customer provided that “[a]ll disputes, claims, or controversies arising from
or relating to this contract or the relationships which result[ed] from this
contract . . . [would] be resolved by binding arbitration by one arbitrator
selected by us with consent of you.” (Id. at p. 448, italics omitted.) A

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plurality of the court ruled that the question of whether the agreement was
silent on class arbitration was for the arbitrator to decide. The parties
agreed to submit all disputes arising from or related to the contract to the
arbitrator, and the dispute related to the contract and the resulting
relationships. (Id. at pp. 451-452.) The plurality decision in Green Tree,
however, has nothing to do with the issue in this case — whether the
arbitration agreement applies to nonsignatories.
An entity seeking to compel arbitration must generally establish it was
a party to an arbitration agreement. (DMS Services, supra, 205 Cal.App.4th
at pp. 1352–1353; JSM Tuscany, LLC v. Superior Court (2011) 193
Cal.App.4th 1222, 1236.) Only in limited circumstances may an arbitration
agreement be enforced by nonsignatories. One such circumstance is where a
benefit is conferred on the nonsignatory as a result of the agreement, making
the nonsignatory a third party beneficiary of the arbitration agreement.
(Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295, 301.) Another
is when the equitable estoppel doctrine applies and a nonsignatory is allowed
to enforce an arbitration clause because the claims against the nonsignatory
are dependent on, or inextricably intertwined with, the contractual
obligations of the agreement containing the arbitration clause. (See Goldman
v. KPMG, LLP (2009) 173 Cal.App.4th 209, 229–230; Jensen, at p. 306; Jones,
supra, 195 Cal.App.4th at p. 20; Boucher v. Alliance Title Co., Inc. (2005) 127
Cal.App.4th 262, 271–272 (Boucher); see also JSM Tuscany, at pp. 1237–
1239.)
2. Standing of the Individual Owners
Defendants argue that express language of both the Application and
the Employment Agreement requires Jarboe to arbitrate his employment-
related claims against the individual owners. In support of their position,

9
defendants cite the following language from the Application: “I and the
company both agree that any claim . . . that either party may have against
one another . . . which would otherwise require or allow resort to any court or
other governmental dispute resolution forum between myself and the
Company (or its owners, directors, officers, managers, employees, agents, and
parties affiliated with its employee benefit and health plans) arising from,
related to, or having any relationship or connection whatsoever with my
seeking employment with, employment by, or other association with the
Company . . . shall be submitted to and determined exclusively by binding
arbitration.” (Italics added.) In isolation, this reference in the Application to
“owners” would appear to support defendants’ position that Jarboe is
required to arbitrate his claims against the individual defendants.
Although defendants contend the Employment Agreement contains the
same operative language, there is an important difference. Unlike the
Application, the Employment Agreement defines the “Company.” It is DKD
of Davis. Thus, even if the individual defendants have standing to compel
arbitration as “owners” of the company, it is in the limited context of their
ownership of DKD of Davis, the “Company” named in the Employment
Agreement. Jarboe’s claims against DKD of Davis were ordered to
arbitration.
3. Third Party Beneficiary Status
To enforce the Employment Agreement as third party beneficiaries,
defendants had to show that the Arbitration Agreements between Jarboe and
DKD of Davis were made expressly for their benefit. (Civ. Code, § 1559;
Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830,
838.) It is not enough that a literal interpretation of the agreements would
benefit Hanlees and the other dealerships. (Vahle v. Barwick (2001) 93

10
Cal.App.4th 1323, 1328.) It was defendants’ burden to prove that the
agreements were intended to benefit them. (City of Hope v. Brian Cave,
L.L.P. (2002) 102 Cal.App.4th 1356, 1370 (City of Hope).) They failed to do
so.
To the extent defendants are suggesting that the so-called “common
employment application” is evidence that the arbitration provisions were
intended for their collective benefit, they did not make this argument to the
trial court. It is forfeited on appeal for their failing to do so. (See Vikco Ins.
Services, Inc. v. Ohio Indemnity Co. (1999) 70 Cal.App.4th 55, 66–67 [issues
or theories not properly raised before trial court will not be considered on
appeal].) This argument also fails on the merits. 5
Defendants argue that the Application was used to apply to all
dealerships within the Hanlees auto group and, as such, the Application did
not limit the definition of “Company” to one specific named dealership.
Defendants support this contention with Jarboe’s declaration wherein he
states that he “applied for work at Hanlees through an online employment
application.” Jarboe further states that he “understood that in order to apply
for employment and ultimately be employed by Hanlees [he] had to fill out
the entire application or else it would not process.” According to defendants,
the significance of the common employment application is that its definition
of “Company” necessarily meant the Hanlees group, and, as such, all of its
affiliated dealerships were intended third party beneficiaries of the

5 At oral argument, Hanlees argued that it had in fact raised the issue of
the common employment application in the trial court. Our review of the
record, specifically the pages cited by appellate counsel at argument, does not
support this contention. Hanlees did argue the dealerships had “common
ownership,” but it did not argue, as defendants contend on appeal, that
Jarboe was bound by the arbitration clause because he signed a “common
employment application.”

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arbitration provisions in the Application and the Employment Agreement.
We disagree.
Even assuming for the sake of argument that defendants’ construction
of the August 4, 2017 Application is correct, the Application was superseded
by the August 10, 2017 Employment Agreement. As noted, the Employment
Agreement, which defines “Company” as DKD of Davis, contains an
integration clause that states, in part: “This agreement is the entire
agreement between the Company and the employee . . . and this agreement
takes the place of all prior and contemporaneous agreements . . . .”
At oral argument, Hanlees, relying on Jenks v. DLA Piper Rudnik Gray
Cary US LLP (2015) 243 Cal.App.4th 1 (Jenks) argued that the integration
clause was limited to the terms of Jarboe’s at-will employment set forth in
the Employment Agreement. Jenks is distinguishable. In Jenks, the plaintiff
received an offer of employment in a letter containing an arbitration
provision. (Jenks, supra, 243 Cal.App.4th at p. 5.) Although the parties
subsequently entered into a termination agreement regarding the plaintiff’s
employment (ibid.), the court found the agreement did not supercede or
nullify the arbitration provision. (Id. at p. 20.) The termination
agreement included an integration clause stating: “ ‘This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior negotiations and agreements,
whether written or oral [with the exception of the prior confidentiality
agreements].’ ” (Id. at p. 15.) Based on this language, the Jenks court
reasoned: “[T]he integration clause is explicitly limited to ‘the subject matter
hereof,’ namely, the terms of plaintiff’s resignation. The [t]ermination
[a]greement does not mention arbitration at all, and contains no provisions
regarding dispute resolution. Consequently, the identified forum for dispute

12
resolution remains arbitration based on the original Offer
Letter.” (Id. at pp. 15-16.)
There are fundamental differences between the Employment
Agreement in this case and the Jenks agreement. Unlike the agreement
in Jenks, the Employment Agreement here includes a broad integration
clause stating: “This agreement is the entire agreement between the
Company and the employee regarding the rights of the Company or employee
to terminate employment with or without good cause and this agreement
takes the place of all prior and contemporaneous agreements, representations,
and understandings of the employee and the Company.” (Italics added.)
Moreover, the Employment Agreement itself contains an exhaustive
arbitration provision.
The integration clause in the Employment Agreement is not expressly
limited to the terms of Jarboe’s at will employment. By its terms, the
Employment Agreement expressly superseded the prior Application. (See
Grey v. American Management Services (2012) 204 Cal.App.4th 803, 805, 807
[plain language of integration clause contained in subsequent employment
agreement reflected intent to supersede earlier job application].) Accordingly,
any attempt by defendants to vary the terms of the Employment Agreement
is barred by the parole evidence rule. (Casa Herrera, Inc. v. Beydoun (2002)
32 Cal.4th 336, 344 [“terms contained in an integrated written agreement
may not be contradicted by prior or contemporaneous agreements”].) There is
no basis to conclude that Jarboe intended the arbitration provision in the
Employment Agreement would apply to all the defendants.
4. Equitable Estoppel
Defendants also argue that Jarboe should be equitably estopped from
proceeding in court against nonsignatories to the Employment Agreement.

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Under the equitable estoppel doctrine, “a nonsignatory defendant may invoke
an arbitration clause to compel a signatory plaintiff to arbitrate its claims
when the causes of action against the nonsignatory are ‘intimately founded in
and intertwined’ with the underlying contract obligations.” (Boucher, supra,
127 Cal.App.4th at p. 271.) The doctrine applies where the claims are
“ ‘ “based on the same facts and are inherently inseparable” ’ from arbitrable
claims against signatory defendants.” (Metalclad Corp. v. Ventana
Environmental Organizational Partnership (2003) 109 Cal.App.4th 1705,
1713 (Metalclad).) “The fundamental point is that a party may not make use
of a contract containing an arbitration clause and then attempt to avoid the
duty to arbitrate by defining the forum in which the dispute will be resolved.”
(Boucher, at p. 272; see also Metalclad, at p. 1714 [estoppel “prevents a party
from playing fast and loose with its commitment to arbitrate, honoring it
when advantageous and circumventing it to gain undue advantage”]; Garcia
v. Pexco, LLC (2017) 11 Cal.App.5th 782, 787 (Garcia) [party could not avoid
arbitration by framing claims as statutory].)
Defendants rely on Metalclad, Boucher, and Garcia, to argue equitable
estoppel applies here. It’s true that this case concerns the efforts of
nonsignatories to compel a signatory to arbitrate. But that is where the
similarities end. Significant differences between the situations in each of
those cases and this one command a different result. The first difference is
that the integral nature of the relationships between the parties in
Metalclad, Boucher, and Garcia was demonstrated by evidence in the record
in each of those cases.
In Metalclad, the plaintiff had a written stock purchase agreement,
that included an arbitration clause, with Geologic, a subsidiary of defendant
Ventana. (Metalclad, supra, 109 Cal.App.4th at pp. 1709–1710.) Metalclad

14
sued Ventana, Geologic and others for breach of contract, fraud and other
claims, and later dropped Geologic from the suit. (Id. at p. 1710.) Ventana
successfully compelled arbitration under Geologic’s contract with Metalclad,
even though not a signatory. (Id. at pp. 1717–1719) The court based its
decision on the “nexus” between Metalclad’s claims against Ventana and the
underlying contract between Metalclad and Geologic, as well as the “integral
relationship” between Geologic and Ventana as subsidiary and parent. (Id. at
pp. 1717–1718.)
In Boucher, the plaintiff entered into a written three-year employment
contract, containing an arbitration clause, with Financial Title Company
(Financial). (Boucher, supra, 127 Cal.App.4th at p. 265.) Shortly thereafter,
Financial’s assets were transferred to Alliance Title Company, Inc. (Alliance).
(Ibid.) Alliance refused to honor Boucher’s contract with Financial. (Ibid.)
Boucher sued both Financial and Alliance. Both moved to compel arbitration.
(Id. at pp. 265–266.) Alliance demonstrated that its majority shareholder
owned all of Financial’s stock and that Financial transferred all its assets to
Alliance. (Id. at p. 266.) The court said that a nonsignatory may invoke an
arbitration clause to compel a signatory plaintiff to arbitrate claims when the
causes of action against the nonsignatory are intimately founded in and
intertwined with the underlying contract obligations. (Id. at p. 271.)
Because Boucher’s claims relied on and assumed the existence of the
employment agreement with Financial and there was a close relationship
between Financial and Alliance, its corporate successor, Boucher was
required to arbitrate against the nonsignatory. (Id. at pp. 272–273.)
Similarly, in Garcia, the plaintiff asserted Labor Code violations
against his employer, Real Time, a staffing company, and Pexco, the company
for which Real Time assigned Garcia to work. (Garcia, supra, 11 Cal.App.5th

15
at pp. 784–785.) Garcia’s employment application had a provision that
required him to arbitrate “ ‘any dispute’ ” with Real Time, but not with Pexco.
(Id. at p. 784.) The court held Pexco, even though a nonsignatory, could
compel arbitration based on equitable estoppel because Garcia’s “claims
against Pexco are rooted in his employment relationship with Real Time.”
(Id. at p. 787.) In so holding, the court explained that Garcia “cannot attempt
to link Pexco to Real Time to hold it liable for alleged wage and hour claims,
while at the same time arguing the arbitration provision only applies to Real
Time and not Pexco.” (Id. at p. 788.)
Here, unlike in Garcia, the court ordered Jarboe’s claims against DKD
of Davis to arbitration, but declined to order the claims against other
defendants because there was no showing they were either rooted in his
employment with DKD of Davis or within the scope of Jarboe’s agreement to
arbitrate any claims against the “company.” (See, ante, B.2. & 3.)
In contrast to the proven close relationships between the signatories
and the nonsignatories in Metalclad, Boucher, and Garcia, the precise nature
of the relationship between Hanlees and its affiliated dealerships is unproven
in this record. While the record shows that the dealerships are subject to
“common ownership,” there is no evidence showing the relationship among
the separate corporate entities or how they operated with respect to each
other’s employees. Nothing indicates that being hired by DKD of Davis,
meant that Jarboe concurrently worked for all the other dealerships. Rather,
the record suggests that each dealership maintained separate relationships
with that dealership’s employees. For example, before Jarboe began working
for Leehan of Davis he needed to be “moved” from DKD of Davis. Following
this move, Jarboe’s payroll records reflect Leehan of Davis as his only
employer.

16
 Defendants rely on Jarboe’s allegations in the operative complaint that
the defendants were “joint employer[s].” Defendants also claim Jarboe’s
complaint treats all defendants as a single enterprise because all of the
causes of action except for one are alleged against “All Defendants” without
distinction. These boilerplate allegations are not sufficient to support
defendants’ equitable estoppel claim. (See Barsegian v. Kessler & Kessler
(2013) 215 Cal.App.4th 446, 452–453.) The defendants have not admitted
that they are “joint employer[s]” nor have they provided any evidence that
shows a joint employment relationship with Jarboe.
The only conclusion that can be drawn on this record is that there is
some relationship between Hanlees and its affiliated dealerships. But it is
unclear what that relationship may be and it has not been shown to be
integral to support the application for equitable estoppel. (See, e.g.,
Thomson-CSF, S.A. v. American Arbitration Assn. (2d Cir.1995) 64 F.3d 773,
777 [“As a general matter, . . . a corporate relationship alone is not sufficient
to bind a nonsignatory to an arbitration agreement”].)
Nor is there a basis to conclude that Jarboe’s claims are “ ‘ “intimately
founded in and intertwined with” ’ ” the Arbitration Agreements. (Metalclad,
supra, 109 Cal.App.4th at p. 1717.) Because Jarboe “treats all defendants as
a single enterprise” defendants assert that it would be inequitable to allow
him to link Leehan of Davis with the other defendants for purposes of wage
and hour claims, while at the same time arguing that the arbitration
provisions only apply to DKD of Davis.
Jarboe’s claims against the company, DKD of Davis, arising from his
employment agreement will proceed to arbitration. The claims against other
defendants for which there is no agreement to arbitrate will not. The mere
fact that the claims against Leehan of Davis and the other defendants may be

17
related to the claims DKD of Davis is arbitrating against Jarboe does not
compel application of equitable estoppel. Rather, the linchpin of the estoppel
doctrine is fairness: “ ‘Equitable estoppel precludes a party from asserting
rights “he otherwise would have had against another” when his own conduct
renders assertion of those rights contrary to equity.’ ” (Metalclad, supra, 109
Cal.App.4th at p. 1713; see also City of Hope, supra, 102 Cal.App.4th at pp.
1370–1371.)
In Metalclad, Boucher, and Garcia, it was equitable to compel the
signatories into arbitration against nonsignatories because each of the
signatories raised claims that were founded on the underlying contracts; the
signatories sought to enforce a benefit under the nonsignatories while
seeking to avoid arbitration. By contrast, in this case, Jarboe is not seeking
to obtain benefits under his employment agreement with DKD of Davis
against Hanlees and the other dealerships under the Employment
Agreement, as there are none, and he is arbitrating the claims against his
employing company. Simply put, the inequities that the doctrine of equitable
estoppel is designed to address are not present.
C. The Trial Court Correctly Refused to Stay the Proceedings
Defendants argue that the trial court erred in refusing to stay both
Jarboe’s PAGA claim and his remaining wage and hour claims against the
nonsignatory defendants, while his individual claims against DKD of Davis
are being arbitrated.
Code of Civil Procedure section 1281.4 provides: “If a court of
competent jurisdiction, whether in this State or not, has ordered arbitration
of a controversy which is an issue involved in an action or proceeding pending
before a court of this State, the court in which such action or proceeding is
pending shall, upon motion of a party to such action or proceeding, stay the

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action or proceeding until an arbitration is had in accordance with the order
to arbitrate or until such earlier time as the court specifies. [¶]. . . [¶] If the
issue which is the controversy subject to arbitration is severable, the stay
may be with respect to that issue only.”
Citing Franco v. Arakelian Enterprises, Inc. (2015) 234 Cal.App.4th
947, defendants argue that a stay was required to prevent inconsistent
determinations that could arise from overlapping issues and possible res
judicata/collateral estoppel implications that could affect the arbitrator’s
jurisdiction. In Franco, the court stated that a stay was required “[b]ecause
the issues subject to litigation under the PAGA might overlap those that are
subject to arbitration of Franco’s individual claims . . . .” (Id. at p. 966.)
While the court directed entry of a stay in Franco, the final paragraph of
Code of Civil Procedure section 1281.4 “specifically vests the trial court with
authority to sever issues.” (Cook v. Superior Court of Los Angeles County
(1966) 240 Cal.App.2d 880, 887.) “[W]hen there is a severance of arbitrable
from inarbitrable claims, the trial court has the discretion to stay proceedings
on the inarbitrable claims pending resolution of the arbitration. (Code. Civ.
Proc., §1281.4; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699,
714.)” (Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 320.)
Nothing in Franco can be interpreted as restricting a court’s discretion under
these circumstances.
Nevertheless, defendants insist that a stay is necessary because
Jarboe’s PAGA claim and his individual claims arise out of the same nucleus
of facts alleged to violate the Labor Code. While there may be similarities
between the claims, a PAGA claim “is not a dispute between an employer and
an employee arising out of their contractual relationship.” (Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 386 (Iskanian).)

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Instead, it is “a dispute between an employer and the state, which alleges
directly or through its agents—either the [Labor and Workforce
Development] Agency or aggrieved employees—that the employer has
violated the Labor Code.” (Iskanian, at pp. 386–387, italics omitted.)
Requiring an employee to litigate a portion of a PAGA claim in a forum
selected by the employer interferes with “the state’s interests in enforcing the
Labor Code.” (Iskanian, at p. 383.)
In Williams v. Superior Court (2015) 237 Cal.App.4th 642 (Williams) a
trial court ordered that in order to give effect to the employee’s written
agreement to waive representative claims but arbitrate individual claims, an
employee’s “aggrieved employee” standing under PAGA was to be submitted
to an arbitrator. (Id. at p. 645.) The appellate court reversed, concluding
that under Iskanian the representative action waiver was ineffective and
contrary to public policy and the PAGA cause of action was not divisible into
separate individual and representative claims. (Ibid.) Citing our decision in
Reyes v. Macy’s, Inc. (2011) 202 Cal.App.4th 1119, the court observed that
“case law suggests that a single representative PAGA claim cannot be split
into an arbitrable individual claim and a nonarbitrable representative claim.
(Williams, at p. 649, italics omitted.) Although Jarboe alleges, in conformity
with the statutory language, 6 that he is “an aggrieved employee” seeking
recovery of civil penalties “on behalf of himself or herself and other current

6 Labor Code section 2699, subdivision (a) provides: “Notwithstanding
any other provision of law, any provision of this code that provides for a civil
penalty to be assessed and collected by the Labor and Workforce
Development Agency or any of its departments, divisions, commissions,
boards, agencies, or employees, for a violation of this code, may, as an
alternative, be recovered through a civil action brought by an aggrieved
employee on behalf of himself or herself and other current or former
employees pursuant to the procedures specified in Section 2699.3.”

20
and former aggrieved employees,” the claim is not an individual one. (Lab.
Code, § 2699, subd. (a); Reyes v. Macy’s, at p. 1123.) Rather, Jarboe brings
the PAGA claim “as the proxy or agent of the state’s labor law enforcement
agencies.” (Arias v. Superior Court (2009) 46 Cal.4th 969, 986 (Arias).)
Recently, our Supreme Court, in ZB, N.A. v. Superior Court (2019) 8 Cal.5th
175, confirmed that “[a]ll PAGA claims are ‘representative’ actions in the
sense that they are brought on the state’s behalf.” (Id. at p. 185.)
Because a PAGA claim is representative and does not belong to an
employee individually, an employer should not be able dictate how and where
the representative action proceeds. (See Perez v. U-Haul Co. of California
(2016) 3 Cal.App.5th 408, 421; Williams, supra, 237 Cal.App.4th at p. 649.)
At oral argument, Hanlees contested the inherent unfairness in allowing the
PAGA claim to proceed, because a successful employee would benefit from a
judgment that has no reciprocal preclusive effect for a successful employer.
However, as our Supreme Court explained in Arias, “The potential for
nonparty aggrieved employees to benefit from a favorable judgment under
the act without being bound by an adverse judgment, however, is not unique
to the Labor Code Private Attorneys General Act of 2004. It also exists when
an action seeking civil penalties for Labor Code violations is brought by a
government agency rather than by an aggrieved employee suing under the
Labor Code Private Attorneys General Act of 2004. Because an action under
the act is designed to protect the public, and the potential impact on remedies
other than civil penalties is ancillary to the action’s primary objective, the
one-way operation of collateral estoppel in this limited situation does not
violate the employer’s right to due process of law.” (Arias, supra, 46 Cal.4th
at p. 987.)

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 Accordingly, we conclude the trial court did not abuse its discretion in
declining to stay the PAGA action pending the arbitration of Jarboe’s
individual claims.
Finally, defendants contend that they requested a stay of all non-
arbitrable claims not just the PAGA claim. But the trial court’s order does
not address the wage and hour claims. We cannot review the propriety of a
non-existent ruling. The proper vehicle for raising this claim of error was a
motion for reconsideration. (Code Civ. Proc., § 1008). As defendants’ time to
seek reconsideration has long since passed, we deem this issue forfeited on
appeal.
D. Unconscionability
Jarboe argues the trial court should have ruled that the Arbitration
Agreements were unenforceable in their entirety due to both procedural and
substantive unconscionability. Jarboe, however, has not appealed from the
trial court’s order compelling arbitration of his individual claims against
DKD of Davis. Nor could he, because an order compelling arbitration is not
appealable. (Ashburn v. AIG Financial Advisors, Inc. (2015) 234 Cal.App.4th
79, 94.) Moreover, the general rule is that a respondent who has not
appealed from a judgment may not assert error on appeal. (Hutchinson v.
City of Sacramento (1993) 17 Cal.App.4th 791, 798.) Accordingly, we do not
address Jarboe’s claim that the Arbitration Agreements were unenforceable
due to unconscionability.
IV. DISPOSITION
The trial court’s order granting in part and denying in part defendants’
motion to compel Jarboe to arbitrate claims and declining to stay the PAGA
claim is affirmed. Jarboe shall recover his costs on appeal.

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 ______________________________
Siggins, P.J.

We concur:

______________________________
Fujisaki, J.

______________________________
Jackson, J.

Jarboe v. Hanlees, A156411

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Trial Court: Alameda County
Superior Court

Trial Judge: Hon. Winifred Y. Smith

Counsel:

John P. Boggs, Roman Zhuk, Fine, Boggs, & Perkins, LLP for Appellants.

Nicholas A. Carlin, Brian S. Conlon, Phillips, Erlewine, Given, & Carlin, LLP for
Respondent.

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