In re Uber Technologies Wage and Hour Cases

Filed 9/28/23

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

A166355
In re UBER TECHNOLOGIES
WAGE AND HOUR CASES. (San Francisco County Super. Ct.
No. CJC-21-005179; J.C.C.P.
No. 5179)

In these coordinated proceedings, defendants Uber and Lyft 1 appeal
after the trial court denied their motions to compel arbitration of claims
brought against them in civil enforcement actions by the People of the State
of California (the People) 2 and by the Labor Commissioner through the
Division of Labor Standards Enforcement (DLSE). 3 We conclude the court
correctly denied the motions because the People and the Labor Commissioner

1 The defendants are (1) Uber Technologies, Inc., and certain of its

affiliated entities (collectively, Uber), and (2) Lyft, Inc. (Lyft).
2 The Attorney General of California, joined by city attorneys of the

cities of Los Angeles, San Diego, and San Francisco, brought the action on
behalf of the People.
3 The DLSE is a division within the Department of Industrial

Relations. (Lab. Code, §§ 21, 79.) We will use the terms DLSE and Labor
Commissioner interchangeably.

1
are not parties to the arbitration agreements invoked by Uber and Lyft. We
therefore affirm.
I. BACKGROUND
A. The People’s and the Labor Commissioner’s Actions Against
Uber and Lyft
In May 2020, the People filed this action. In their operative complaint,
the People allege Uber and Lyft violated the Unfair Competition Law (Bus. &
Prof. Code, § 17200 et seq.) (UCL) by misclassifying their California ride-
share and delivery drivers as independent contractors rather than employees,
thus depriving them of wages and benefits associated with employee status. 4
The People allege the misclassification harms workers, competitors, and the
public. The People seek injunctive relief, civil penalties, and restitution
under the UCL. (Bus. & Prof. Code, §§ 17203, 17204, 17206.) The People
also seek injunctive relief under the statutory scheme established by
Assembly Bill No. 5 (2019–2020 Reg. Sess.) (Assembly Bill 5), specifically
Labor Code section 2786, 5 which authorizes such relief to prevent
misclassification of employees as independent contractors.
The People sought, and the trial court entered, a preliminary injunction
prohibiting Uber and Lyft from misclassifying their drivers as independent
contractors in violation of Assembly Bill 5. (People v. Uber Technologies, Inc.,
supra, 56 Cal.App.5th at pp. 281–282.) We affirmed in an October 2020
opinion. (Id. at p. 316.) Following the passage of Proposition 22, which

4 We discussed the People’s claims and other relevant background more

fully in People v. Uber Technologies, Inc. (2020) 56 Cal.App.5th 266, 273, 274–
282.
5 The injunctive relief provision of Assembly Bill 5 was originally

codified as Labor Code section 2750.3, subdivision (j) (Stats. 2019, ch. 296,
§ 2) and was later transferred to section 2786 (Stats. 2020, ch. 38, §§ 1–2).
(See People v. Uber Technologies, Inc., supra, 56 Cal.App.5th at p. 274, fn. 3.)

2
altered the standards for determining whether app-based drivers are
independent contractors (Bus. & Prof. Code, § 7451), the People and Uber and
Lyft stipulated to dissolve the preliminary injunction, which had been stayed
since it was entered. The People’s operative first amended and supplemental
complaint clarifies that the People seek injunctive relief to the extent
Proposition 22 is unconstitutional or otherwise invalid. 6
In August 2020, the Labor Commissioner filed separate actions against
Uber and Lyft, pursuant to her enforcement authority under the Labor Code.
(E.g., Lab. Code, §§ 61, 90.5, 95, 98.3, subd. (b).) The Labor Commissioner
alleges Uber and Lyft have misclassified drivers as independent contractors
and have thus violated certain Labor Code provisions and wage orders. The
Labor Commissioner seeks injunctive relief, civil penalties payable to the
state, and unpaid wages and other amounts alleged to be due to Uber’s and
Lyft’s drivers, such as unreimbursed business expenses. 7

6 The validity of Proposition 22 under the state constitution is a

question now pending before the California Supreme Court. (Castellanos v.
State of California (2023) 89 Cal.App.5th 131, review granted June 28, 2023,
S279622.)
7 As noted, the People and the Labor Commissioner filed their actions

pursuant to statutory authority as public enforcement officials. (Bus. & Prof.
Code, §§ 17203, 17204, 17206; Lab. Code, §§ 2786, 61, 90.5, 95, 98.3,
subd. (b).) Their actions are not private attorney general actions, i.e., they
are not actions “brought by an aggrieved employee on behalf of himself or
herself and other current or former employees” as authorized by the Labor
Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)
(PAGA). (Lab. Code, § 2699, subd. (a).) They are direct enforcement actions
by public prosecutors acting under specific statutory grants of prosecutorial
authority.

3
 The People’s action and the Labor Commissioner’s actions were
coordinated (along with other cases not involved in this appeal) 8 as part of
Uber Technologies Wage and Hour Cases.
B. Uber’s and Lyft’s Motions To Compel Arbitration Based on Their
Arbitration Agreements With Drivers
As we noted in People v. Uber Technologies, Inc., supra, 56 Cal.App.5th
at p. 312, fn. 24, foreshadowing this appeal, Uber and Lyft filed motions to
compel arbitration in the People’s action; they also filed similar motions in
the Labor Commissioner’s actions. Uber and Lyft sought to require
arbitration of those actions to the extent they seek remedies that Uber and
Lyft characterize as “driver-specific” or “ ‘individualized’ ” relief, such as
restitution under the UCL and unpaid wages under the Labor Code.
Uber’s and Lyft’s motions did not seek to compel arbitration of the
People’s and the Labor Commissioner’s requests for civil penalties and
injunctive relief, but they nonetheless asked the court to stay those portions
of the actions pending completion of any driver arbitrations. Finally, as an
alternative to their requests to compel arbitration, Uber and Lyft asked the
court to strike the People’s and the Labor Commissioner’s requests for
restitution and certain other relief.
In their motions, Uber and Lyft relied on arbitration agreements they
entered into with drivers. The agreements require drivers to arbitrate on an
individual basis most disputes arising from their relationship with Uber or
Lyft. The People and the Labor Commissioner are not parties to the
agreements.

8 According to the parties’ briefs in this appeal, those other cases (which

also allege misclassification of employees as independent contractors) were
brought by private parties under PAGA.

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 Following coordination, the parties filed additional briefing pertaining
to the motions, and the trial court heard argument on August 26, 2022. On
September 1, 2022, the court entered an order denying Uber’s and Lyft’s
motions.
Uber and Lyft appealed.
II. DISCUSSION
Uber and Lyft contend the arbitration agreements they entered into
with their drivers require that portions of the civil enforcement actions
brought by the People and the Labor Commissioner be compelled to
arbitration. If this court orders arbitration, they argue, the remaining
portions of the People’s and the Labor Commissioner’s actions should be
stayed. We conclude, as the trial court did, that there is no basis to compel
arbitration.
A. Standard of Review
“Whether an arbitration agreement binds a third party is a legal
question we review de novo.” (Department of Fair Employment and Housing
v. Cisco Systems, Inc. (2022) 82 Cal.App.5th 93, 99 (Cisco).)
B. The People and the Labor Commissioner Are Not Bound by
Uber’s and Lyft’s Arbitration Agreements with Their Drivers
Both the federal government and California have strong public policies
“ ‘in favor of arbitration as an expeditious and cost-effective way of resolving
disputes.’ ” (People v. Maplebear Inc. (2022) 81 Cal.App.5th 923, 930
(Maplebear).) But “[e]ven though the ‘ “ ‘law favors contracts for arbitration
of disputes between parties’ [citation], ‘ “there is no policy compelling persons
to accept arbitration of controversies which they have not agreed to
arbitrate . . . .” ’ ” ’ ” (Id. at p. 931.)
The trial court correctly concluded there is no basis to compel
arbitration here because the People and the Labor Commissioner are not

5
parties to the arbitration agreements Uber and Lyft entered into with their
drivers. Uber and Lyft contend arbitration nevertheless should be compelled
on the basis of either (1) federal preemption or (2) equitable estoppel. We
disagree. 9
1. Preemption
Uber and Lyft argue the Federal Arbitration Act (9 U.S.C. § 1 et seq.)
(FAA) precludes the People and the Labor Commissioner from pursuing in
court some of the types of relief they seek in their enforcement actions,
including restitution under the UCL and unpaid wages and business
expenses of drivers under the Labor Code. Characterizing these forms of
relief as “individualized” or “driver-specific,” they argue that, because such
relief may benefit individual drivers, any claim seeking it “belong[s]” to the
drivers (and the People and the Labor Commissioner only “stand[] in the
[drivers’] shoes,” while the drivers are the “real parties in interest”). Thus,
they conclude, those portions of the People’s and the Labor Commissioner’s
actions must be compelled to arbitration. We disagree.
The United States Supreme Court has emphasized that, while the FAA
embodies a strong federal policy in favor of enforcing parties’ agreements to
arbitrate, that policy is founded on the parties’ consent, and there is no policy
in favor of requiring arbitration of disputes the parties have not agreed to
arbitrate. (Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __, __

9 Because we hold the People and the Labor Commissioner are not

bound by the arbitration agreements between Uber and Lyft and their
drivers, we need not address (1) the Labor Commissioner’s argument that
Uber and Lyft have not provided sufficient evidence of such agreements
because they produced no signed agreements, or (2) defendants’ contentions
that the agreements are valid and binding as between the parties who
entered them. We will assume for purposes of this opinion that the
arbitration agreements bind drivers who entered them.

6
[142 S.Ct. 1906, 1918] (Viking River) [“the ‘first principle’ of our FAA
jurisprudence” is “that ‘[a]rbitration is strictly “a matter of consent” ’ ”]; id. at
p. __ [142 S.Ct. at p. 1917]; E.E.O.C. v. Waffle House, Inc. (2002) 534 U.S.
279, 294 (Waffle House) [“Because the FAA is ‘at bottom a policy
guaranteeing the enforcement of private contractual arrangements,’
[citation], we look first to whether the parties agreed to arbitrate a dispute,
not to general policy goals, to determine the scope of the agreement.”].)
“ ‘ ‘Whether an agreement to arbitrate exists is a threshold issue of
contract formation and state contract law.” [Citations.] “The party seeking
to compel arbitration bears the burden of proving the existence of a valid
arbitration agreement.” ’ [Citation.] ‘Because arbitration is a matter of
contract, generally “ ‘one must be a party to an arbitration agreement to be
bound by it or invoke it.’ ” ’ [Citation.] ‘However, both California and federal
courts have recognized limited exceptions to this rule, allowing
nonsignatories to an agreement containing an arbitration clause to compel
arbitration of, or be compelled to arbitrate, a dispute arising within the scope
of that agreement.’ [Citation.] ‘ “ ‘As one authority has stated, there are six
theories by which a nonsignatory may be bound to arbitrate:
“(a) incorporation by reference; (b) assumption; (c) agency; (d) veil-piercing or
alter ego; (e) estoppel; and (f) third party beneficiary.” ’ ” ’ ” (Maplebear,
supra, 81 Cal.App.5th at pp. 931–932.)
Here, as noted, the People and the Labor Commissioner are not parties
to the arbitration agreements at issue. And none of the above theories
supports compelling their claims to arbitration. We reject Uber’s and Lyft’s
suggestion that the People and the Labor Commissioner should be bound
because they allegedly are mere proxies for Uber’s and Lyft’s drivers. (See
Cisco, supra, 82 Cal.App.5th at p. 99 [addressing a similar claim; noting the

7
“proxy” theory was “along [the] lines” of the assumption, agency, and alter
ego theories].)
The relevant statutory schemes expressly authorize the People and the
Labor Commissioner to bring the claims (and seek the relief) at issue here.
(Bus. & Prof. Code, §§ 17203, 17204, 17206 [authority for Attorney General
and other public prosecutors to sue in the name of the People under the
UCL]; Lab. Code, § 2786 [authority under Assembly Bill 5]; id., §§ 61, 90.5,
95, 98.3, subd. (b) [Labor Commissioner’s authority].) The public officials
who brought these actions do not derive their authority from individual
drivers but from their independent statutory authority to bring civil
enforcement actions, and, as we discuss further below, there is no basis for
binding them to arbitration agreements Uber and Lyft entered with drivers.
a. Waffle House Establishes the Drivers’ Arbitration Agreements Do
Not Bar the People and the Labor Commissioner from Seeking
Judicial Relief
In Waffle House, the United States Supreme Court held that the
federal Equal Employment Opportunity Commission (EEOC) is not bound by
employee arbitration agreements because it has the ability to determine
whether to file suit and what relief to pursue. (Waffle House, supra, 534 U.S.
at pp. 291, 282, 285, 297–298.) An employee’s agreement to arbitrate certain
claims does not bar the EEOC from pursuing “victim-specific judicial relief”
(as well as injunctive relief) in its own action. (Id. at pp. 282, 285, 297–298.)
The high court rejected arguments that the EEOC’s claims in this setting are
“derivative” and that the EEOC is a “proxy for the employee.” (Id. at
pp. 297–298.)
Recent decisions by California appellate courts have followed Waffle
House, holding that public agencies bringing enforcement actions as
authorized by statute are not bound by arbitration agreements between

8
private parties. In Maplebear, a case very similar to this one, the San Diego
City Attorney brought an enforcement action under the UCL on behalf of the
People, alleging Instacart misclassified its shoppers as independent
contractors. (Maplebear, supra, 81 Cal.App.5th at p. 926.) The trial court
denied Instacart’s motion to compel arbitration, and the appellate court
affirmed, holding that, under Waffle House, arbitration agreements between
Instacart and its shoppers were not binding on the People. (Maplebear, at
pp. 926–927, 935.)
The Maplebear court rejected Instacart’s contention that the FAA
supported a contrary result because the People allegedly were “deputized” by
the shoppers. (Maplebear, supra, 81 Cal.App.5th at pp. 934–935.) Instead,
the court held, the City of San Diego was acting in its own law enforcement
capacity to seek relief under the UCL. (Maplebear, at p. 934.) The court
explained that “the FAA is not concerned with the ability of the State of
California to prosecute violations of the Labor Code and to seek civil
penalties and related relief for those violations under the UCL. Contrary to
Instacart’s assertion, the Shoppers are not the real party in interest in this
case, the People are.” (Id. at p. 935.)
Similarly, in Cisco, supra, 82 Cal.App.5th at p. 97, the appellate court
addressed whether the Department of Fair Employment and Housing (now
named the Civil Rights Department) could be “compelled to arbitrate an
employment discrimination lawsuit when the affected employee agreed to
resolve disputes with the employer through arbitration.” Affirming the trial
court’s denial of a motion to compel arbitration, the appellate court held the
Department could not be required to arbitrate because it did not agree to do
so. (Ibid.) The Cisco court rejected the employer’s claim that the Department

9
should be bound because it was a “proxy” for the employee and was “not
acting independently.” (Id. at p. 99.)
Instead, the Cisco court explained, the Department acts independently
and pursuant to express statutory authority when it sues for violations of the
Fair Employment and Housing Act. (Cisco, supra, 82 Cal.App.5th at pp. 99–
100, 103–104, citing Waffle House, supra, 534 U.S. at p. 291.) “As an
independent party, the Department cannot be compelled to arbitrate under
an agreement it has not entered.” (Cisco, at p. 104; see Crestwood Behavioral
Health, Inc. v. Lacy (2021) 70 Cal.App.5th 560, 581–585 [recognizing,
following Waffle House, that the Labor Commissioner has independent
statutory authority to investigate and obtain victim-specific relief under the
Labor Code and to protect the public interest, regardless of whether an
individual employee’s claim has been compelled to arbitration].)
We agree with the analysis in Maplebear and Cisco. We hold that,
under Waffle House, the People and the Labor Commissioner are not bound
by arbitration agreements they did not enter. The FAA does not preclude
them from exercising their statutory authority to enforce the law and to seek
appropriate remedies, including injunctive relief and civil penalties, as well
as restitution and other “victim-specific judicial relief.” (Waffle House, supra,
534 U.S. at p. 282; id. at pp. 285, 297–298.) The trial court correctly so held.
As we discuss below, Uber’s and Lyft’s arguments to the contrary are not
persuasive.
b. Viking River Provides No Basis for Reversal
Uber and Lyft contend the high court’s decision in Viking River
requires that the People and the Labor Commissioner be bound to Uber’s and
Lyft’s arbitration agreements with their drivers. We disagree. Viking River
involved a different issue—whether California’s rule invalidating waivers of
representative claims under PAGA is preempted by federal law. (Viking

10
River, supra, 596 U.S. at p. __ [142 S.Ct. at p. 1913]; see Adolph v. Uber
Technologies, Inc. (2023) 14 Cal.5th 1104, 1113–1114 [discussing Viking
River].) In this case, the actions brought by the People and the Labor
Commissioner are not private attorney general actions under PAGA. The
PAGA plaintiff in Viking River, a former employee of the defendant, had
signed an agreement to arbitrate any dispute arising out of her employment
(Viking River, at p. __ [142 S.Ct. at pp. 1915–1916]), and the high court did
not address any claim that a plaintiff who was a nonsignatory to the
agreement should be bound.
Uber and Lyft dwell on language in a footnote in Viking River
(footnote 4), in which the high court stated that, “[a]lthough the terms of
[9 U.S.C.] § 2 limit the FAA’s enforcement mandate to agreements to
arbitrate controversies that ‘arise out of’ the parties’ contractual
relationship,[10] disputes resolved in PAGA actions satisfy this requirement.
The contractual relationship between the parties is a but-for cause of any
justiciable legal controversy between the parties under PAGA, and ‘arising
out of’ language normally refers to a causal relationship. [Citation.] And
regardless of whether a PAGA action is in some sense also a dispute between
an employer and the State, nothing in the FAA categorically exempts claims
belonging to sovereigns from the scope of [9 U.S.C.] § 2.” (Viking River,
supra, 596 U.S. at p. __, fn. 4 [142 S.Ct. at p. 1919, fn. 4].) This passage,
Uber and Lyft tell us, supports their effort to bind the People and the Labor
Commissioner to arbitration agreements with their drivers.

10 Section 2 of the FAA (9 U.S.C. § 2) states in relevant part: “A written
provision in . . . a contract evidencing a transaction involving commerce to
settle by arbitration a controversy thereafter arising out of such contract or
transaction . . . shall be valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract . . . .”

11
 We disagree. In our view, the cited passage establishes that, when an
employee who has agreed to arbitrate claims against an employer brings a
PAGA action, then (even if that action could be said to be a dispute between
an employer and the state) the FAA requires that the employee submit to
arbitration any claim covered by the agreement, because the claim arises out
of the contractual relationship between the parties. (Viking River, supra,
596 U.S. at p. __, fn. 4 [142 S.Ct. at p. 1919, fn. 4]; id. at p. __ [142 S.Ct. at
pp. 1915–1916].) As we read it, the passage addresses which claims (brought
by a plaintiff who was a signatory to an arbitration agreement) are to be
submitted to arbitration pursuant to the FAA’s mandate. (Viking River, at
p. __, fn. 4 [142 S.Ct. at p. 1919, fn. 4].) The Viking River court did not cite
Waffle House and did not state it was altering or limiting the holding in that
case. And nowhere in footnote 4 or elsewhere in the Viking River opinion did
the high court state it was addressing or expanding the category of litigants
who are covered by the FAA’s mandate to include public enforcement
agencies who did not agree to arbitrate any claims against the employer.
Indeed, as noted above, far from suggesting parties should be bound to
arbitrate where they have not agreed to do so, the Viking River court
emphasized that “the ‘first principle’ of our FAA jurisprudence” is “that
‘[a]rbitration is strictly “a matter of consent.” ’ ” (Id. at p. __ [142 S.Ct. at
p. 1918]; accord, Cisco, supra, 82 Cal.App.5th at p. 103 [noting that Viking
River “reaffirmed . . . that arbitration is a matter of consent and a party
cannot be compelled to arbitrate absent a contractual basis for concluding the
party agreed to do so”].) We reject Uber’s and Lyft’s argument that Viking
River supports reversal here.
The other cases cited by Uber and Lyft in support of their preemption
argument similarly do not require arbitration by a public enforcement agency

12
that is not a party to an arbitration agreement. Instead, the cited cases
involve plaintiffs who agreed to arbitrate certain types of disputes, and the
issue raised on appeal was which claims or relief pursued by those plaintiffs
were subject to arbitration in light of their agreements and the FAA. (E.g.,
Epic Systems Corp. v. Lewis (2018) 584 U.S. __, __ [138 S.Ct. 1612, 1619–
1621] [employee agreed to arbitrate employment-related disputes on an
individual basis; FAA required enforcing this agreement and precluding
employee’s effort to pursue claims in court as representative of a class]; Cruz
v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 309–310, 317–318
[consumer-plaintiff was alleged to be bound by arbitration agreement; his
request for restitution under the UCL was arbitrable]; Esparza v. KS
Industries, L.P. (2017) 13 Cal.App.5th 1228, 1235, 1239, 1246 [employee-
plaintiff agreed to arbitrate employment-related claims and later brought
PAGA action; appellate court held that, under then-applicable Iskanian 11
framework, the employee’s claims for unpaid wages for himself and other
employees “retain their private nature and continue to be covered by the”
FAA].) Uber and Lyft cite no case holding a state government body or official
that did not agree to arbitration can be barred from enforcing the law in court
based on an arbitration agreement entered by others.
Defendants’ reliance on Preston v. Ferrer (2008) 552 U.S. 346 is also
misplaced. Preston held that, “when parties agree to arbitrate all questions
arising under a contract, state laws lodging primary jurisdiction in another
forum, whether judicial or administrative, are superseded by the FAA.” (Id.
at pp. 349–350.) The Preston court distinguished Waffle House, noting that

11 Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th

348 (Iskanian), overruled in part by Viking River, supra, 596 U.S. at p. __
[142 S.Ct. at p. 1924].

13
in that case, “the Court addressed the role of an agency, not as adjudicator
but as prosecutor, pursuing an enforcement action in its own name . . . .”
(Preston, at p. 359.) Here, of course, the People and the Labor Commissioner
are acting as prosecutors, not adjudicators. Waffle House, not Preston,
controls.
Similarly unpersuasive is Uber’s and Lyft’s reliance on the statement
in Department of Industrial Relations v. Continental Casualty Co. (1996)
52 Cal.App.4th Supp. 1, 3, that the Legislature, through Labor Code
provisions authorizing the DLSE to collect wages or benefits on behalf of a
worker without assignment, “intended to put the DLSE right into the shoes
of the worker for the purpose of such wage litigation.” Based on this
conclusion, the appellate division in Department of Industrial Relations held
that the DLSE (like a wage earner) was exempt from a statutory notice
requirement. (Ibid.) The court addressed no question of arbitrability and did
not suggest the DLSE or other public agency is bound to an arbitration
agreement it did not enter. We decline to read the court’s brief, general
statement as authority for a proposition it did not consider.
Nor do Howitson v. Evans Hotels, LLC (2022) 81 Cal.App.5th 475 and
Department of Fair Employment and Housing v. Lucent Technologies, Inc.
(9th Cir. 2011) 642 F.3d 728, two other cases cited by defendants, persuade
us reversal is warranted. Those decisions held, in contexts unrelated to
arbitration, that the legislative conferral of standing to sue does not
necessarily establish the named plaintiff is the real party in interest.
(Howitson, at pp. 488–489, 491–492 [in PAGA action, the state is the real
party in interest, although an aggrieved employee has standing to sue;
therefore, for purposes of claim preclusion, an employee’s individual lawsuit

14
and her later PAGA action were not brought by the same party] 12; Lucent
Technologies, at p. 738 & fn. 4 [while state statute “support[ed] a finding that
California is a real party in interest for the purposes of standing,” the
statutory language “fail[ed] to render it a real party in the controversy for the
purposes of [federal] diversity jurisdiction”].) Neither case addresses any
issue relating to arbitrability or holds that a public enforcement agency must
arbitrate its claims because the relief it obtains may benefit individuals.
c. Defendants’ Efforts To Distinguish Waffle House Are Not
Persuasive
In a separate line of attack, Uber and Lyft contend that Waffle House is
distinguishable, in part because it involved claims for victim-specific relief
brought by a federal agency, 13 and that Maplebear and Cisco (which applied
the Waffle House holding to suits by state government actors) are
distinguishable or were incorrectly decided. We reject these arguments and
hold Waffle House applies here.
It is, of course, true that Waffle House involved a federal agency (the
EEOC) suing under a federal antidiscrimination statute, the Americans with
Disabilities Act (ADA). (Waffle House, supra, 534 U.S. at pp. 282–283.) But
in our view, the court’s analysis and holding apply here and establish that a
government body exercising express statutory authority to seek judicial relief
(including “victim-specific” relief) cannot be barred from doing so on the
ground the agency is supposedly a mere “proxy” of an individual employee

12 Code of Civil Procedure section 367 (“Every action must be

prosecuted in the name of the real party in interest, except as otherwise
provided by statute.”).
13 Uber also states Waffle House “predates” the high court’s “modern

arbitration decisions.” Waffle House has not been overruled, and we will
follow it.

15
who entered an arbitration agreement. (Id. at pp. 282, 285, 297–298; accord,
Maplebear, supra, 81 Cal.App.5th at pp. 926–927, 934–935; Cisco, supra,
82 Cal.App.5th at pp. 99–100, 103–104.) As with the agencies in Waffle
House, Maplebear, and Cisco, the People and the Labor Commissioner are not
parties to the arbitration agreements invoked in this case, and they may
pursue their claims in court.
Uber and Lyft argue the statutory schemes at issue here differ in
certain respects from the one in Waffle House, including as to whether the
government agency has an exclusive right to pursue claims and whether it is
bound by the same statute of limitations as a private individual. (Waffle
House, supra, 534 U.S. at pp. 291, 287, 297.) But in our view, the Waffle
House court’s statements on these points do not provide a basis to depart
from its holding. Like the EEOC (id. at pp. 291–292), the People and the
Labor Commissioner decide whether to bring claims within their statutory
authority, and their ability to do so does not depend on the consent or
approval of individual employees. Despite variations in the statutory
schemes at issue, we conclude Waffle House applies here. The People and the
Labor Commissioner are not acting as proxies for drivers but bringing
independent civil enforcement actions, and they are not barred from seeking
judicial relief by arbitration agreements they did not enter. (See id. at
pp. 297–298.)
As to Maplebear and Cisco, Uber and Lyft contend those cases are
distinguishable, in part because the defendants there sought to compel larger
portions of the civil enforcement actions to arbitration. But in both cases the
relief sought by the public enforcement agencies included restitution or other
victim-specific relief (Maplebear, supra, 81 Cal.App.5th at p. 928; Cisco,
supra, 82 Cal.App.5th at p. 98), and the appellate courts held that no portion

16
of those actions should be compelled to arbitration, because the public
prosecutors had not agreed to arbitrate. (Maplebear, at pp. 926–927, 935;
Cisco, at pp. 97, 104.) For the reasons we have discussed, we agree.
d. The People’s and the Labor Commissioner’s Exercise of Their
Statutory Law Enforcement Authority Does Not Pose an Obstacle
to the FAA
Uber and Lyft argue that, where state agencies are involved, their
pursuit of restitution and other statutory remedies that may benefit
individual employees should be held to be preempted because such agency
action stands as an “obstacle to the accomplishment of the FAA’s objectives.”
(Citing AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 343, 352.) We
do not agree. As discussed, the FAA does not embody a policy in favor of
compelling arbitration of disputes in the absence of consent. (Viking River,
supra, 596 at p. __ [142 S.Ct. at p. 1918]; Waffle House, supra, 534 U.S. at
p. 294.)
Uber contends the People’s and the Labor Commissioner’s pursuit of
restitution and similar relief in court will interfere with drivers’ arbitration
agreements because a judgment in the present action could be preclusive of
certain issues in future arbitrations, thus causing drivers to “forever lose the
ability to bring their claims in the arbitral forum they agreed to.” The People
dispute Uber’s claim that the present action will have preclusive effect in
drivers’ individual arbitrations. We need not resolve this point. Even if there
could be some future preclusive effect on ongoing or future arbitrations, Uber
presents no authority requiring that litigation in court by nonparties to an
arbitration agreement must be barred whenever it is possible such litigation
could affect an arbitration between signatories to an agreement requiring
that form of dispute resolution in their private relations.

17
 Uber also argues that individual drivers cannot avoid arbitration by
assigning or transferring their claims to another individual, and Uber asserts
“that is exactly what is happening here.” Lyft similarly contends that, if a
“third party” such as “a successor in interest, assignee, bankruptcy trustee, or
class action representative,” sought to pursue “a driver’s claim for monetary
relief,” the driver’s arbitration agreement “would control.” But as discussed,
the People and the Labor Commissioner are pursuing their own statutory
claims. They are not assignees or other similarly situated third parties
seeking to present claims held by drivers. (DMS Services, LLC v. Superior
Court (2012) 205 Cal.App.4th 1346, 1353 [The “exceptions to the general rule
that one must be a party to an arbitration agreement to invoke it or be bound
by it ‘generally are based on the existence of a relationship between the
nonsignatory and the signatory, such as principal and agent or employer and
employee, where a sufficient “identity of interest” exists between them.’ ”].)
The People and the Labor Commissioner also are not acting as class
representatives as would an employee representing other similarly situated
employees. Finally, for the same reason, Uber is incorrect in describing the
People and the Labor Commissioner as “nominal part[ies] controlling the
litigation of drivers’ claims” and as the drivers’ “litigation counsel.”
Uber suggests in its reply brief that a nonsignatory plaintiff such as the
People should be compelled to arbitration without regard to whether the
nonsignatory has any relationship with a party to the arbitration agreement,
so long as the nonsignatory’s claims can be said to arise out of the contract
that contains the agreement. In support, Uber cites Viking River, Epic
Systems, and Concepcion, but those cases do not support Uber’s argument. In
each case, the individual plaintiff or plaintiffs bringing a PAGA claim (Viking
River) or seeking to represent a plaintiff class (Epic Systems, Concepcion) had

18
entered an arbitration agreement. (Viking River, supra, 596 U.S. at p. __
[142 S.Ct. at pp. 1915–1916]; Epic Systems Corp. v. Lewis, supra, 584 U.S. at
p. __ [138 S.Ct. at pp. 1619–1621]; AT&T Mobility LLC v. Concepcion, supra,
563 U.S. at p. 336.) As we have discussed, none of these cases holds that
public law enforcement officials must arbitrate their statutory claims when
they have not agreed to do so and have no preexisting relationship with the
parties to the arbitration agreement.
Finally, Lyft asserts that state law should not permit public
enforcement agencies to bring claims “on behalf of” individual drivers who
entered arbitration agreements, because if that is permissible, then state law
could similarly “deputize” a private citizen to bring suit on behalf of a person
who has agreed to arbitration, a result that Lyft contends would run afoul of
the California Supreme Court’s decision in Iskanian, supra, 59 Cal.4th 348.
That argument is not well taken.
In the relevant passage from Iskanian (which Lyft quotes only in part),
the court explained that its holding on the PAGA issues raised there “would
not permit a state to circumvent the FAA by, for example, deputizing
employee A to bring a suit for the individual damages claims of employees B,
C, and D. This pursuit of victim-specific relief by a party to an arbitration
agreement on behalf of other parties to an arbitration agreement would be
tantamount to a private class action, whatever the designation given by the
Legislature.” (Iskanian, supra, 59 Cal.4th at pp. 387–388, italics added.)
“Under [the high court’s decision in] Concepcion, such an action could not be
maintained in the face of a class waiver.” (Id. at p. 388.)
The Iskanian court’s statement that the state could not designate a
party to an arbitration agreement to pursue the individual damages claims of
other parties to the agreement has no bearing on the issues presented here.

19
As discussed, the People and the Labor Commissioner are not parties to the
arbitration agreements who have been improperly “deputize[d]” to bring suit
for other such parties. They are nonparties to the agreements who are suing
in their law enforcement capacities and pursuing statutorily authorized
remedies. That Lyft can imagine a different scenario that might violate the
FAA provides no basis for reversal here.
Underlying Uber’s and Lyft’s preemption arguments is their assertion
that the People’s and the Labor Commissioner’s claims in these actions (to
the extent they seek restitution or other relief that may benefit individual
drivers) are really the “drivers’ claims” or claims that “belong to drivers.” We
have rejected this argument. As discussed, the People and the Labor
Commissioner are authorized by statute to bring the claims at issue here and
to seek the relief they request. The fact some of that relief might benefit
individual drivers (or could be sought by individual drivers on their own
behalf) does not transform the claims brought here into derivative claims
brought by a proxy for the drivers.
2. Equitable Estoppel
Uber and Lyft argue that, apart from federal preemption, the People
and the Labor Commissioner are bound by the drivers’ arbitration
agreements based on equitable estoppel. Here, too, we disagree. The trial
court correctly held there is no basis for equitable estoppel on this record.
a. Equitable Estoppel Does Not Apply
As we have discussed, the general rule is that “ ‘[t]he right to
arbitration depends on a contract, and a party can be compelled to submit a
dispute to arbitration only if the party has agreed in writing to do so.’
[Citation.] ‘Even the strong public policy in favor of arbitration does not
extend to those who are not parties to an arbitration agreement or who have
not authorized anyone to act for them in executing such an agreement.’ ”

20
(Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295, 300 (Jensen).)
But as also noted above, “there are circumstances under which persons who
have not signed an agreement to arbitrate are bound to do so,” including
“ ‘ “estoppel.” ’ ” (Ibid.)
Specifically, “[a] nonsignatory plaintiff may be estopped from refusing
to arbitrate when he or she asserts claims that are ‘dependent upon, or
inextricably intertwined with,’ the underlying contractual obligations of the
agreement containing the arbitration clause. [Citation.] ‘The focus is on the
nature of the claims asserted . . . . [Citations.] That the claims are cast in
tort rather than contract does not avoid the arbitration clause.’ [Citation.]
Rather, ‘ “[t]he plaintiff’s actual dependence on the underlying contract in
making out the claim against the nonsignatory . . . is . . . always the sine qua
non of an appropriate situation for applying equitable estoppel.” ’ [Citation.]
‘[E]ven if a plaintiff’s claims “touch matters” relating to the arbitration
agreement, “the claims are not arbitrable unless the plaintiff relies on the
agreement to establish its cause of action.” ’ [Citation.] ‘The fundamental
point’ is that a party is ‘not entitled to make use of [a contract containing an
arbitration clause] as long as it worked to [his or] her advantage, then
attempt to avoid its application in defining the forum in which [his or] her
dispute . . . should be resolved.’ ” (Jensen, supra, 18 Cal.App.5th at p. 306;
accord, DMS Services, LLC v. Superior Court, supra, 205 Cal.App.4th at
p. 1354 [“The reason for this equitable rule is plain: One should not be
permitted to rely on an agreement containing an arbitration clause for its
claims, while at the same time repudiating the arbitration provision
contained in the same contract.”].)
The trial court correctly concluded equitable estoppel does not apply
here because the People’s and the Labor Commissioner’s claims are not

21
founded on Uber’s and Lyft’s contracts with their drivers. Instead, as the
court recognized, the People and the Labor Commissioner are seeking to
enforce the UCL and the Labor Code and are not seeking to enforce or take
advantage of any portion of Uber’s and Lyft’s contracts with their drivers.
Indeed, as the court noted, the People and the Labor Commissioner “take the
position that those contracts violate California law requiring Defendants to
classify their drivers as employees.”
As defendants note, the People’s and the Labor Commissioner’s
complaints refer to certain provisions of the contracts between defendants
and their drivers in outlining the nature of their relationship. But referring
to the contract is not sufficient; for equitable estoppel to apply, the plaintiff
must rely on the contract in asserting its claims. (Goldman v. KPMG, LLP
(2009) 173 Cal.App.4th 209, 218.) Plaintiffs here seek no relief under the
contracts, and their claims do not rely on them.
The cases cited by defendants do not persuade us that equitable
estoppel applies. For example, the present case is different from JSM
Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1239–1240, on
which both defendants rely for the principle that a nonsignatory plaintiff may
in some instances be bound to arbitrate under principles of equitable
estoppel. JSM Tuscany involved a group of closely related plaintiffs under
common ownership, some of whom were signatories to the contracts that
contained the arbitration agreements, and all of whom brought claims that
were based on obligations imposed by those contracts. (Id. at pp. 1239–1242,
1226 & fn. 2.) Here, there is no preexisting relationship between the People
and the Labor Commissioner on the one hand, and the drivers who agreed to

22
arbitrate on the other. 14 And in any event, as discussed, neither plaintiff
presents claims that depend on, or are inextricably intertwined with, the
obligations imposed by defendants’ contracts with their drivers. We decline
to hold the doctrine of equitable estoppel bars government law enforcement
actions in these circumstances.
Nor does Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, also cited by
defendants, persuade us it would be inequitable for the People’s and the
Labor Commissioner’s actions to proceed in court. In Garcia, an employee
bound by an arbitration agreement with his employer, a staffing company
(Real Time), brought statutory wage claims against the staffing agency and
the company where the employee had been assigned to work (Pexco), making
“no distinction” between them. (Id. at pp. 784–785.) Because the claims
arose out of the plaintiff’s employment relationship with Real Time, and the
arbitration agreement clearly covered statutory claims against Real Time (id.
at pp. 786–788), the appellate court held that, “[o]n these facts, it is
inequitable for the arbitration about Garcia’s assignment with Pexco to
proceed with Real Time, while preventing Pexco from participating” (id. at

14 See Jensen, supra, 18 Cal.App.5th at p. 301 (“ ‘The California cases

binding nonsignatories to arbitrate their claims fall into two categories. In
some cases, a nonsignatory was required to arbitrate a claim because a
benefit was conferred on the nonsignatory as a result of the contract, making
the nonsignatory a third party beneficiary of the arbitration agreement. In
other cases, the nonsignatory was bound to arbitrate the dispute because a
preexisting relationship existed between the nonsignatory and one of the
parties to the arbitration agreement, making it equitable to compel the
nonsignatory to also be bound to arbitrate his or her claim.’ ”); see also JSM
Tuscany, LLC v. Superior Court, supra, 193 Cal.App.4th at p. 1240, fn. 20
(“[I]t is difficult to conceive of a situation in which a nonsignatory party can
state a valid claim based on the contract, without having some legal
relationship with a signatory of the contract or being a third party
beneficiary of the contract.”).

23
p. 787). We find no similar inequity here, where the plaintiffs have not
agreed to arbitrate with anyone and do not seek an “ ‘advantage’ ” (Jensen,
supra, 18 Cal.App.5th at p. 306) under an employment contract while
ignoring its arbitration clause, but instead seek statutory remedies for
defendants’ allegedly wrongful refusal to treat their drivers as employees.
Finally, in Machado v. System4 LLC (2015) 471 Mass. 204, 210, 212–
216, 205 [28 N.E.3d 401], cited by defendants, the court held equitable
estoppel applied where plaintiff franchisees brought misclassification and
other claims against two defendants, one of whom was not a party to the
arbitration agreement signed by the plaintiffs. The court concluded that the
franchise agreement was significant to the plaintiffs’ claims, and that the
plaintiffs had alleged “concerted misconduct” by the defendants. (Id. at
pp. 212–216.) We are not persuaded a similar result is appropriate here. In
addition to the differing factual settings (including that the plaintiffs here are
not signatories to any arbitration agreement), we conclude, as discussed, that
the misclassification claims asserted in this case are not “dependent upon, or
founded in and inextricably intertwined with, the underlying contractual
obligations of” Uber’s and Lyft’s contracts with their drivers. (Goldman v.
KPMG, LLP, supra, 173 Cal.App.4th at p. 218.)
b. Application of Equitable Estoppel Is Unwarranted
We also agree with the trial court that equitable estoppel does not
apply here because, under California law, as our Supreme Court has stated,
“it is clear ‘that neither the doctrine of estoppel nor any other equitable
principle may be invoked against a governmental body where it would
operate to defeat the effective operation of a policy adopted to protect the
public.’ ” (Kajima/Ray Wilson v. Los Angeles County Metropolitan
Transportation Authority (2000) 23 Cal.4th 305, 316, citing County of San
Diego v. Cal. Water etc. Co. (1947) 30 Cal.2d 817, 826.) The trial court may

24
have overstated the point a bit in suggesting that, if the People and the Labor
Commissioner were forced into arbitration, it “would nullify the important
public policies underlying the UCL and the Labor Code.” (Italics added.) But
we do think the result sought by Uber and Lyft here would fundamentally
undermine those policies. Semantics aside, we agree with the trial court that
the outcome Uber and Lyft urge would “effectively negate” Waffle House and
the other case law we have discussed above establishing that an arbitration
agreement between private parties does not bar a public enforcement agency
from seeking judicial relief, including victim-specific relief. Thus, even if the
elements of equitable estoppel were otherwise established, we would decline
to apply it here.
Uber asserts that only the remedies of injunctive relief and civil
penalties serve “a public function,” while restitution “is mainly about
restoring property to those owed.” This argument does not persuade us
equitable estoppel should apply here. We note initially that, under the orders
sought by defendants, even the People’s and the Labor Commissioner’s
requests for injunctive relief and civil penalties would be stayed pending
completion of any ordered arbitrations. But in any event, we do not agree
that an effort by public enforcement officials to obtain restitution of money
allegedly taken illegally from citizens can be fairly characterized as not
serving a public purpose in the context of the equitable estoppel issue raised
here. The Legislature decided to include restitution as a remedy obtainable
by public prosecutors under the UCL (along with injunctive relief and civil
penalties) (Bus. & Prof. Code, §§ 17203, 17204, 17206), and we decline to hold
that they actually act as surrogates for private parties when they seek it.
The defendants’ reliance on State of California v. Altus Finance (2005)
36 Cal.4th 1284 (Altus Finance) is similarly unpersuasive. In Altus Finance,

25
the Supreme Court held that, under applicable Insurance Code provisions,
when the Insurance Commissioner is acting as conservator of an insolvent
insurance company, the Commissioner has the exclusive right to protect the
interests of individual policyholders and creditors. (Id. at pp. 1303–1305.) In
that context, the Attorney General may not seek restitution for the benefit of
creditors under the UCL “without trespassing on the Commissioner’s role.”
(Altus Finance, at p. 1306; see id. at pp. 1303–1304, 1307.) In contrast, the
Insurance Code does not preclude the Attorney General in a UCL action from
pursuing public injunctive relief or civil penalties payable to the state. (Altus
Finance, at pp. 1307–1308.)
The Altus Finance court explained: “It is true that the Attorney
General is the state’s chief law enforcement officer, and that restitution may
have a collateral law enforcement effect, punishing the wrongdoer against
whom restitution is sought. But the primary purpose of the Attorney
General’s attempt at restitution is to recover lost property on behalf of an
insolvent insurer’s creditors and policyholders. As such, he seeks to perform
an action that is quintessentially within the scope of the Commissioner’s
power as conservator and trustee of the insolvent company.” (Altus Finance,
supra, 36 Cal.4th at p. 1305.) In this case, by contrast, there is no conflict
between spheres of authority conferred on different public officers. Nor is
there anything in the governing statutory text that we might compare to the
limit on law enforcement power involved in Altus Finance. While that case
involved an Insurance Code provision that established an “express limit” on
the authority of the Attorney General to seek restitution (Altus Finance,
supra, 36 Cal.4th at p. 1303), there is no comparable provision here that
limits the relief obtainable by the People under the UCL, and there is nothing

26
that persuades us the available types of relief should be treated differently
for purposes of the equitable estoppel analysis.
C. Other Issues: Defendants’ Requests for Orders Staying or
Striking Portions of These Actions
1. The Stay Requests
Since we conclude there is no basis to compel arbitration of any of the
People’s or the Labor Commissioner’s claims or requests for relief, we need
not address Uber’s and Lyft’s arguments that, if some claims were compelled
to arbitration, the other portions of these actions (the portions that are not
arbitrable) should be stayed pending completion of the individual
arbitrations.
2. Lyft’s Motion to Strike
As noted, Uber’s and Lyft’s motions to compel arbitration included
alternative requests that the trial court strike plaintiffs’ complaints to the
extent they sought restitution and certain other relief. In its order denying
the motions to compel, the trial court denied the alternative motions to
strike.
Lyft renews its request on appeal, 15 arguing briefly that, if this court
does not compel arbitration, it should “strike the driver-specific remedies that
are subject to arbitration,” to “avoid creating a conflict with the FAA,”
because such remedies are arbitrable as between Lyft and its drivers. Even
assuming the denial of Lyft’s motion to strike is reviewable in this appeal
under Code of Civil Procedure section 1294.2 16 (which the People dispute), we

15 Uber does not challenge the denial of its motion to strike.

16 Code of Civil Procedure section 1294.2 provides in part that, “[u]pon

an appeal from” an order denying a motion to compel arbitration, “the court
may review the decision and any intermediate ruling, proceeding, order or
decision which involves the merits or necessarily affects the order or
judgment appealed from, or which substantially affects the rights of a party.”

27
find no basis to strike the assertedly “preempted” remedies. For the reasons
we discussed in part II.B.1, ante, the People’s and the Labor Commissioner’s
requests for judicial relief, including victim-specific relief, are not preempted.
III. DISPOSITION
The order denying Uber’s and Lyft’s motions to compel arbitration of,
and to stay, the People’s and the Labor Commissioner’s actions is affirmed.
The People and the Labor Commissioner shall recover their costs on appeal.

STREETER, J.

WE CONCUR:

BROWN, P. J.
FINEMAN, J. *

* Judge of the Superior Court of California, County of San Mateo,

assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

28
Trial Court: Superior Court of California, City & County of San
Francisco

Trial Judge: Hon. Ethan P. Schulman

Counsel: Keker, Van Nest & Peters, Rachael E. Meny, R. James
Slaughter; Munger, Tolles & Olson, Rohit K. Singla,
Jeffrey Y. Wu, Jennifer L. Bryant and Benjamin G.
Barokh for Defendant and Appellant Lyft, Inc.

Gibson, Dunn & Crutcher, Theane Evangelis, Blaine H.
Evanson, Heather L. Richardson and Alexander N.
Harris for Defendants and Appellants Uber Technologies,
Inc., Raiser-CA, LLC, Uber-USA, LLC, and Portier, LLC.

David M. Balter, Miles E. Locker, Alec L. Segarich and
M. Colleen Ryan for Plaintiff and Respondent Lilia
García-Brower.

Rob Bonta, Attorney General, Satoshi Yanai, Assistant
Attorney General, Joanna Hull, Lillian Tabe, Kwi Choi,
Katherine Read and Mana Barari, Deputy Attorneys
General; Hydee Feldstein Soto, City Attorney (Los
Angeles), Michael Bostrom, Assistant City Attorney,
Joshua Crowell, Deputy City Attorney; Mara W. Elliott,
City Attorney (San Diego), Mark Ankcorn, Chief Deputy
City Attorney, Kevin King and Julie Rau, Deputy City
Attorneys; David Chiu, City Attorney (San Francisco),
Yvonne R. Meré, Chief Deputy City Attorney, Sara J.
Eisenberg, Chief of Complex and Affirmative Litigation,
Matthew D. Goldberg, Chief Worker Protection Attorney,
and Molly J. Alarcon, Deputy City Attorney, for Plaintiff
and Respondent the People.

In re Uber Technologies Wage and Hour Cases – A166355