Filed 10/11/23 Tome v. Parsons Environment & Infrastructure Group CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
PEDRO TOME, B316661
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 21STCV11315)
v.
PARSONS ENVIRONMENT &
INFRASTRUCTURE GROUP
INC., et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of Los
Angeles County, Rupert A. Byrdsong, Judge. Affirmed in part;
reversed in part.
Ogletree, Deakins, Nash, Smoak & Stewart, Jack S.
Sholkoff, Hardy Ray Murphy, N. Nikki Staggs and Catherine L.
Brackett for Defendants and Appellants.
Eanet, Matthew L. Eanet, Danielle G. Eanet and Iris E.
Salem for Plaintiff and Respondent.
_________________________
INTRODUCTION
Parsons Environment & Infrastructure Group and its
parent company Parsons Corporation (Parsons) appeal an order
denying their motion to compel arbitration of Pedro Tome’s
(Tome) claim under the California Labor Code Private Attorneys
General Act of 2004 (Lab. Code, § 2698 et seq.) (PAGA).1
Parsons’s motion was based on Tome’s predispute agreement to
arbitrate all claims arising from their employment relationship.
Tome brought claims in his individual and representative
capacity under PAGA. We hold his claim for civil penalties based
on alleged Labor Code violations he personally suffered (his
“individual” PAGA claim) and his other individual claims are
subject to arbitration under Viking River Cruises, Inc. v. Moriana
(2022) 596 U.S. ___ [213 L.Ed.2d 179, 142 S.Ct. 1906] (Viking
River), decided months after the trial court denied the motion to
compel arbitration. We affirm the trial court’s order to adjudicate
the representative PAGA claim in the Superior Court.
FACTUAL AND PROCEDURAL BACKGROUND
I. Background Information
Parsons employed Tome from August 15, 2016 to July 1,
2020. Tome was initially classified as an exempt construction
manager and was later reclassified as an hourly foreman and
crew lead. His employment was terminated on July 2, 2020.
1 Undesignated statutory references are to the Labor Code.
2
II. Tome’s Complaint
On March 24, 2021, Tome filed a complaint against
Parsons, challenging termination of his employment and alleging
he was misclassified as “exempt” during that employment. He
alleged a variety of individual statutory violations of the
California Labor Code and sought civil penalties under PAGA on
behalf of himself, the general public, and other “Aggrieved
Employees” who were also purportedly misclassified as exempt.
Specifically he alleged causes of action for failure to pay overtime
wages; failure to reimburse necessary business expenses; meal
period violations; rest period violations; failure to timely pay final
wages upon termination of employment; failure to pay all wages
earned during employment; failure to furnish accurate itemized
wage statements; retaliation in violation of section 1102.5; unfair
competition in violation of Business & Professional Code section
17200; and wrongful termination of employment. He sought to
recover civil penalties under PAGA for the alleged violations.
III. Parsons’s Motion to Compel Arbitration
On August 30, 2021, Parsons moved to compel arbitration
of Tome’s claims and to stay proceedings in the trial court
pending arbitration.
As a preliminary matter, the parties do not dispute that the
arbitration agreement at issue here falls within the scope of the
Federal Arbitration Act (FAA).2
2 The FAA stands as a congressional declaration of a liberal
policy favoring arbitration agreements, notwithstanding any
state substantive or procedural policies to the contrary. (Vaughn
v. Tesla, Inc. (2023) 87 Cal.App.5th 208, 232.) To ensure that
arbitration agreements are enforced according to their terms, the
3
At the start of his employment, Tome had signed an
agreement to arbitrate. The agreement provides that both Tome
and Parsons agree to arbitrate any and all claims arising out of
Tome’s employment. However, paragraph 8 of the agreement,
entitled “Collective/Representative/Class Action Waiver,” also
provides that all claims subject to the agreement must be
“pursued on an individual basis only.”
Paragraph 12 of the agreement contains a severability
clause. It provides that “If the prohibition against class/collective
actions is deemed unlawful, then such action shall proceed
forward in court as a collective or class action.” If any other part
of the agreement is deemed unlawful— other than the class or
collective action waiver—the unlawful provision “shall be deemed
severed,” and the other terms shall “remain in full force and
effect.”
IV. Trial Court’s Ruling
On October 4, 2021, the trial court denied Parsons’s motion
to compel arbitration. The trial court held that the contractual
waiver of PAGA representative claims was invalid under
California law. It found that the severance provision (Paragraph
12) required the parties to adjudicate the entire action
(individual and representative claims) in court if the prohibition
on class or collective actions was invalid. We note the trial court
did not have the benefit of Viking River which held that
individual claims subject to the FAA must be arbitrated,
notwithstanding the existence of PAGA representative claims.
FAA preempts state laws which require a judicial forum for the
resolution of claims which the contracting parties agreed to
resolve by arbitration. (Ibid.)
4
(Viking River, supra, 596 U.S. ___ [142 S.Ct. 1906.) Put another
way, the existence of PAGA representative claims, even if
unarbitrable under California law, does not mandate that all
claims remain in the trial court for adjudication. The claims may
be adjudicated in different fora.
On November 18, 2021, Parsons filed a timely notice of
appeal.
DISCUSSION
I. Standard of Review
Where, as here, the trial court’s order denying a motion to
compel arbitration rests solely on an issue of law, we review that
decision de novo. (Seifu v. Lyft, Inc. (2023) 89 Cal.App.5th 1129,
1136 (Seifu); Gregg v. Uber Technologies, Inc. (2023)
89 Cal.App.5th 786, 794.)
II. Applicable Law
A. PAGA
“California’s Labor Code contains a number of provisions
designed to protect the health, safety, and compensation of
workers. Employers who violate these statutes may be sued by
employees for damages or statutory penalties. [Citations.] . . .
Several Labor Code statutes provide for additional civil penalties,
generally paid to the state unless otherwise provided. [Citation.]
Before PAGA’s enactment, only the state could sue for civil
penalties.” (Kim v. Reins International California, Inc. (2020)
9 Cal.5th 73, 80 (Kim), citing Iskanian v. CLS Transportation Los
Angeles, LLC (2014) 59 Cal.4th 348. 378 (Iskanian).)
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Before 2004, the California Labor & Workforce
Development Agency (LWDA) was responsible for collecting civil
penalties for labor law violations. (Nickson v. Shemran, Inc.
(2023) 90 Cal.App.5th 121, 127 (Nickson).) The Legislature
found, however, that the LWDA lacked sufficient resources to
keep pace with the sheer number and gravity of offenses. (Ibid.)
As a solution, the Legislature enacted PAGA to empower
aggrieved employees to act as private attorneys general to
prosecute and recover civil penalties for Labor Code violations on
the State’s behalf. (§ 2699, subd. (a); Nickson, at p. 127; Seifu,
supra, 89 Cal.App.5th at p. 1137.) Although an aggrieved
employee is the named plaintiff in a PAGA action, an employee
suing under PAGA “ ‘does so as the proxy or agent of the state’s
labor law enforcement agencies.’ ” (Kim, supra, 9 Cal.5th at
p. 81, italics omitted; Seifu, at p. 1137.) Thus, “[e]very PAGA
claim is ‘a dispute between an employer and the state,’ ” and
“[r]elief under PAGA is designed primarily to benefit the general
public, not the party bringing the action.” (Kim, at p. 81.)
Two types of claims authorized by PAGA are “ ‘individual’
PAGA claims, which are based on Labor Code violations
sustained by the plaintiff, [and] ‘representative’ [or non-
individual] PAGA claims, which are based on Labor Code
violations involving employees other than the plaintiff.” (Galarsa
v. Dolgen California, LLC (2023) 88 Cal.App.5th 639, 647, italics
added.)
B. Iskanian
In Iskanian, supra, 59 Cal.4th at p. 382, the California
Supreme Court held that “an employee’s right to bring a PAGA
action is unwaivable.” The Court rejected the employer’s
argument that the arbitration agreement was enforceable
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because it allowed the employee to bring individual PAGA claims
and barred only “representative” (i.e., non-individual) PAGA
claims. The Court concluded that “an arbitration agreement
requiring an employee as a condition of employment to give up
the right to bring representative PAGA actions in any forum is
contrary to public policy” and “unenforceable as a matter of state
law.” (Id. at pp. 360, 384.) Iskanian also concluded the FAA did
not preempt state law in that respect, because the “FAA’s goal of
promoting arbitration as a means of private dispute resolution
does not preclude our Legislature from deputizing employees to
prosecute Labor Code violations on the state’s behalf.” (Id. at
p. 360.)
C. Viking River
On June 15, 2022, the United States Supreme Court
decided Viking River, addressing the extent to which the FAA
preempts the Iskanian rule barring PAGA waivers. Viking River
abrogated Iskanian in part and held that an employer could
enforce an agreement calling for arbitration of individual PAGA
claims. (Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at
pp. 1916–1917, 1924–1925].)
The Viking River Court described the two rules adopted by
Iskanian. Iskanian’s “principal rule prohibits waivers of
‘representative’ PAGA claims . . . . That is, it prevents parties
from waiving representative standing to bring PAGA claims in a
judicial or arbitral forum.” (Viking River, supra, 596 U.S. at
p. ___ [142 S.Ct. at p. 1916], italics omitted.) Iskanian’s
“secondary rule . . . invalidates agreements to separately
arbitrate or litigate ‘individual PAGA claims for Labor Code
violations that an employee suffered,’ on the theory that resolving
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victim-specific claims in separate arbitrations does not serve the
deterrent purpose of PAGA.” (Id. at pp. 1916–1917.)
The Viking River Court explained that PAGA claims are
“representative” in two ways. (Viking River, supra, 596 U.S. at
p. ___ [142 S.Ct. at p. 1916].) First, all PAGA claims are
“representative” because a plaintiff brings a PAGA claim as an
agent or proxy before the state. (Ibid.) Second, some PAGA
claims are “representative” because they are brought by
employees to address violations suffered by other employees as
well as themselves. (Ibid.) In light of this distinction, the
Supreme Court held that Iskanian’s “principal rule” prohibiting
“wholesale” waivers of an employee’s right to pursue a
“representative” PAGA claim on behalf of the state was not
preempted by the FAA. (Id. at pp. 1916–1917.) That is because
“the FAA does not require courts to enforce contractual waivers of
substantive rights and remedies.” (Id. at p. 1919.)
On the other hand, Viking River held Iskanian’s “secondary
rule,” prohibiting the separation of individual and non-individual
PAGA claims, was preempted by the FAA to the extent it
“invalidates agreements to arbitrate only ‘individual PAGA
claims for Labor Code violations that an employee suffered.’ ”
(Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at p. 1923].)
Iskanian’s “prohibition on contractual division of PAGA actions
into constituent claims unduly circumscribes the freedom of
parties to determine ‘the issues subject to arbitration’ and ‘the
rules by which they will arbitrate,’ [citation], and does so in a
way that violates the fundamental principle that ‘arbitration is a
matter of consent.’ ” (Ibid.) Accordingly, an arbitration
agreement compelling individual claims to arbitration is
enforceable as to the individual portion of a PAGA claim. (Id. at
8
p. 1925] [“Viking was entitled to enforce the agreement insofar as
it mandated arbitration of Moriana’s individual PAGA claim.”].)
Viking River stated the “conflict between PAGA’s
procedural structure and the FAA . . . derives from the statute’s
built-in mechanism of claim joinder,” which permits broad joinder
of the claims of other employees to the claim of the individual
plaintiff. (Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at
p. 1923].) “A state rule imposing an expansive rule of joinder in
the arbitral context would defeat the ability of parties to control
which claims are subject to arbitration. Such a rule would permit
parties to superadd new claims to the proceeding, regardless of
whether the agreement between them committed those claims to
arbitration. Requiring arbitration procedures to include a joinder
rule of that kind compels parties to either go along with an
arbitration in which the range of issues under consideration is
determined by coercion rather than consent, or else forgo
arbitration altogether. Either way, the parties are coerced into
giving up a right they enjoy under the FAA.” (Id. at p. 1924.)
Viking River continued, “When made compulsory by way of
Iskanian, the joinder rule internal to PAGA functions in exactly
this way. Under that rule, parties cannot agree to restrict the
scope of an arbitration to disputes arising out of a particular
‘ “ ‘transaction’ ” ’ or ‘ “common nucleus of facts.” ’ [Citation.] If
the parties agree to arbitrate ‘individual’ PAGA claims based on
personally sustained violations, Iskanian allows the aggrieved
employee to abrogate the agreement after the fact and demand
either judicial proceedings or an arbitral proceeding that exceeds
the scope jointly intended by the parties. The only way for
parties to agree to arbitrate one of an employee’s PAGA claims is
to also ‘agree’ to arbitrate all other PAGA claims in the same
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arbitral proceeding.” (Viking River, supra, 596 U.S. at p. ___
[142 S.Ct. at p. 1924].) For these reasons, Viking River held “the
FAA preempts the rule of Iskanian insofar as it precludes
division of PAGA actions into individual and non-individual
claims through an agreement to arbitrate.” (Ibid.)
Finally, the Viking River decision concluded the
representative/“non-individual” claim had to be dismissed
because the plaintiff no longer had standing to assert the claim.
(Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at p. 1925].)
The Court reasoned, “PAGA provides no mechanism to enable a
court to adjudicate non-individual PAGA claims once an
individual claim has been committed to a separate proceeding.
Under PAGA’s standing requirement, a plaintiff can maintain
non-individual PAGA claims in an action only by virtue of also
maintaining an individual claim in that action.” (Ibid.) The
Court continued, “When an employee’s own dispute is pared away
from a PAGA action, the employee is no different from a member
of the general public, and PAGA does not allow such persons to
maintain suit. [Citation.] As a result, [the plaintiff] lacks
statutory standing to continue to maintain her non-individual
claims in court, and the correct course is to dismiss her
remaining claims.” (Ibid.)
Regarding this final point, Justice Sotomayor observed in a
concurrence that, “if this Court’s understanding of state law is
wrong, California courts, in an appropriate case, will have the
last word. Alternatively, if this Court’s understanding is right,
the California Legislature is free to modify the scope of statutory
standing under PAGA within state and federal constitutional
limits.” (Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at
p. 1926].)
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D. Adolph v. Uber Technologies, Inc.
Justice Sotomayor’s prediction that California courts would
have “the last word” on the scope of statutory standing under
PAGA came true with Adolph v. Uber Technologies, Inc. (2023)
14 Cal.5th 1104 (Adolph).
Adolph presents facts very similar to this case. Employee
Adolph agreed to arbitrate, “on an individual basis only, almost
all work-related claims he might have against Uber.” (Adolph,
supra, 14 Cal.5th at p. 1114.) With regard to PAGA actions, the
agreement said: “ ‘To the extent permitted by law, you and
Company agree not to bring a representative action on behalf of
others under the [PAGA] in any court or in arbitration. This
waiver shall be referred to as the “PAGA Waiver.” ’ The
agreement also includes a severability clause: ‘If the PAGA
Waiver is found to be unenforceable or unlawful for any reason,
(1) the unenforceable provision shall be severed from this
Arbitration Provision; (2) severance of the unenforceable
provision shall have no impact whatsoever on the Arbitration
Provision or the Parties’ attempt to arbitrate any remaining
claims on an individual basis pursuant to the Arbitration
Provision; and (3) any representative actions brought under the
PAGA must be litigated in a civil court of competent
jurisdiction . . . .’ ” (Id. at p. 1115.) The questions presented in
Adolph is “whether an aggrieved employee who has been
compelled to arbitrate claims under PAGA that are ‘premised on
Labor Code violations actually sustained by’ the plaintiff
[citations] maintains statutory standing to pursue ‘PAGA claims
arising out of events involving other employees’ . . . . We hold
that the answer is yes.” (Id. at p. 1114.)
11
Before further explaining its holding, the Court noted that
an “aggrieved employee” under PAGA is someone who was
employed by the alleged violator and against whom one or more
of the alleged violations was committed. (Adolph, supra,
14 Cal.5th at p. 1114.) This was the Court’s holding in Kim,
where it rejected the notion that when plaintiff settled his
individual claims he lost standing to pursue the remaining
representative claims. (Kim, supra, 9 Cal.5th at pp. 83–86.) The
Court also noted that a plaintiff does not lose standing when the
alleged individual claims are time-barred. (Johnson v. Maxim
Healthcare Services, Inc. (2021) 66 Cal.App.5th 924, 930. In sum,
the Adolph Court declined to add standing requirements to the
statutory definition of “aggrieved employee.” It held: “[A] worker
becomes an ‘aggrieved employee’ with standing to litigate claims
on behalf of fellow employees upon sustaining a Labor Code
violation committed by his or her employer. [Citations.]
Standing under PAGA is not affected by enforcement of an
agreement to adjudicate a plaintiff’s individual claim in another
forum. Arbitrating a PAGA plaintiff’s individual claim does not
nullify the fact of the violation or extinguish the plaintiff’s status
as an aggrieved employee, any more than the time-barring of
remedies did in Johnson or the settlement of the individual
damages claims did in Kim. [Citations.] The operative complaint
alleges that Adolph experienced Labor Code violations while
driving for Uber. Under Kim, Adolph’s allegations that Labor
Code violations were committed against him while he was
employed by Uber suffice to confer standing to bring a PAGA
action.” (Adolph, at p. 1121.)
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III. Analysis
Preliminarily, we address Parsons’s argument—raised for
the first time on appeal—that the arbitration agreement’s
language waived only “class or collective actions,” not
representative claims. As a general rule, issues not raised in the
trial court cannot be raised for the first time on appeal. (Johnson
v. Greenelsh (2009) 47 Cal.4th 598, 603.)
The general rule against new issues is subject to an
exception that grants appellate courts the discretion to address
questions not raised in the trial court when the theory presented
for the first time on appeal involves only a legal question
determinable from facts that are (1) uncontroverted in the record
and (2) could not have been altered by the presentation of
additional evidence. (County of Kern v. T.C.E.F., Inc. (2016)
246 Cal.App.4th 301, 326; Redevelopment Agency v. City of
Berkeley (1978) 80 Cal.App.3d 158, 167.)
We conclude the exception to the general rule does not
apply to the new argument raised by Parsons on appeal. First,
the claim that the contractual phase “class or collective actions”
does not include representative actions could and should have
been addressed in the trial court because resolution of the issue
may have involved factual evidence as to what the drafters of the
agreement meant by omitting the word “representative” from
that phrase. Second, Parsons’s motion to compel asked the court
to stay the representative claims while the individual claims
went to arbitration. Parsons did not in any way argue, as it does
now, that the representative claims were not encompassed in the
“class or collective action” waiver. We conclude this contention is
forfeited.
13
In supplemental briefing, both parties agree that Viking
River and Adolph permit adjudication of individual claims in
arbitration even when representative claims remain in the
superior court. They agree, as do we, that a representative claim
remains in the superior court where, as here, the class action
waiver is invalid under Kim and Ishkanian. As to the individual
claims, the parties disagree on the effect of the severance clause.
Tome argues the severance clause compels adjudication of the
individual claim in the superior court. He interprets the
severance clause as providing that the entire action remain in
superior court if the “class or collective” waiver is invalid.
Paragraph 12 of the agreement to arbitrate contains the
severance clause: “12. Severability: If the prohibition against
class/collective actions is deemed unlawful, then such action shall
proceed forward in court as a collective or class action.”
Interpretation of the severance clause requires us to
discern the meaning of the term “such action.” We conclude
“such action” refers to the representative claim only, not every
claim in the complaint. Interpreting “such action” to include all
individual claims as well as representative claims would basically
wipe out the individual claims because, in the words of
Paragraph 12, the individual and representative claims, together,
would be proceeding “forward in court as a collective or class
action” only.
14
DISPOSITION
The order denying Parsons’s motion to compel arbitration
of the individual claims is reversed. The order denying Parsons’s
motion to compel arbitration of the representative claim is
affirmed.
Due to the change in the law, each party shall bear its own
costs.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
STRATTON, P. J.
We concur:
GRIMES, J.
VIRAMONTES, J.
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