Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County. No. BC356521 Robert L. Hess, Judge.
Initiative Legal Group, Mark Yablonovich, Marc Primo, Matthew T. Theriault, Dina Livhits for Plaintiff’s and Appellants.
No appearance for Defendant and Respondent.
BOREN, P.J.
An employee, Arshavir Iskanian, appeals from an order granting the motion by his employer, CLS Transportation of Los Angeles, to compel the individual arbitration of claims brought in a class action lawsuit. The lawsuit alleged various Labor Code and Unfair Competition Law violations, such as the failure to pay statutorily required overtime compensation. (Lab. Code, §§ 510, 1198.)
An order compelling arbitration is not appealable. (See, e.g., Melchor Investment Co. v. Rolm Systems (1992) 3 Cal.App.4th 587, 591.) However, because the employee presumably would not want to confirm the award and the grounds to vacate it are extremely limited (Code Civ. Proc., § 1286.2), there is arguably no adequate remedy of law. As requested by the employee, we thus “exercise our discretion to treat the appeal as a petition for a writ of mandate.” (Szetela v. Discover Bank (2002) 97 Cal.App.4th 1094, 1098.)
The employer successfully sought binding arbitration, in accordance with the provisions of a signed agreement between employer and employee. Also, the employee acknowledged and agreed to a mandatory arbitration provision highlighted in the employee handbook. The agreement and the handbook subjected the employee’s claims to binding arbitration, and the agreement further required the arbitration of individual claims and prohibited proceedings on a class or representative basis.
The trial court found that the agreement to arbitrate was neither procedurally nor substantively unconscionable, and that the arbitration agreement and class action waiver were valid and enforceable. Thus, the trial court granted the employer’s motion to compel arbitration, dismissed the class action claims, stayed the action pending the outcome of the arbitration of the employee’s individual claims, and set a postarbitration status conference for November of 2007.
Soon after the trial court rendered its opinion, our Supreme Court decided Gentry v. Superior Court (2007) 42 Cal.4th 443 (Gentry), a major case addressing the issue of class action arbitration waivers in overtime cases. Gentry held that a class arbitration waiver should not be enforced “if a trial court determines, based on factors discussed below, that class arbitration would be a significantly more effective way of vindicating the rights of affected employees than individual arbitration.” (Id. at p. 450.)
As the court in Gentry explained: “We cannot say categorically that all class arbitration waivers in overtime cases are unenforceable. . . . Nonetheless, when it is alleged that an employer has systematically denied proper overtime pay to a class of employees and a class action is requested notwithstanding an arbitration agreement that contains a class arbitration waiver, the trial court must consider the[se] factors . . .: the modest size of the potential individual recovery, the potential for retaliation against members of the class, the fact that absent members of the class may be ill informed about their rights, and other real world obstacles to the vindication of class members’ rights to overtime pay through individual arbitration.” (Id. at pp. 462, 463.)
In Gentry, the court made clear that the question of whether a class action waiver is enforceable depends upon a factual inquiry to determine whether or not, in light of the claims being asserted, a class action will be a “more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration.” (Id. at p. 463.) Thus, a class action waiver in an arbitration agreement will be invalidated only “after the proper factual showing.” (Id. at p. 466.)
The court in Gentry also addressed the claim by the plaintiff that the arbitration agreement as a whole--not just the class action waiver--was unenforceable. The court observed that “[s]hould the trial court on remand find the class arbitration waiver in the present case to be void, it is unclear whether the issue of the unconscionability of the arbitration agreement as a whole will become moot, because it is unclear whether Gentry will continue to resist arbitration or whether [the employer] will continue to seek it.” (Id. at p. 467.)
Thus, the Supreme Court in Gentry observed that a finding of procedural unconscionability “is a prerequisite to determining that the arbitration agreement as a whole is unconscionable” (id. at p. 451), and proceeded to discuss the employer’s argument that the entire agreement was not unconscionable because Gentry had a 30-day period to opt out of the agreement. (Id. at p. 472.) The court concluded that, based on some of the terms in the employee handbook and some arbitration limitations (id. at pp. 470-471), “the present agreement has an element of procedural unconscionability notwithstanding the opt-out provision, and therefore remand[ed] for a determination of whether provisions of the arbitration agreement were substantively unconscionable.” (Id. at p. 451.)
In the present case, there was no specific provision in the agreement permitting the employee to opt out of the arbitration agreement within any specified period of time. However, the employer argued to the trial court that its employees could effectively opt out of arbitration because they were not forced to sign the arbitration agreement, some of them did not sign it, and Iskanian signed the agreement approximately a year after his employment started. The employer thus argued there was no contract of adhesion.
On appeal, CLS has filed a notice “that it will not file an opposition to the appeal.” This enigmatic notice is an obvious failure to rebut the contentions raised in the opening brief and thus could be construed as a waiver or concession. (Cf. Curtis v. Santa Clara Valley Medical Center (2003) 110 Cal.App.4th 796, 803, fn. 4; Mansell v. Board of Administration (1994) 30 Cal.App.4th 539, 545.)
However, because the trial court herein did not have the benefit of the Supreme Court’s decision in Gentry, we deem it appropriate for the trial court in the first instance to have the opportunity to apply Gentry to the factual record in this case. (See Gentry, supra, 42 Cal.4th at p. 472 [“we remand the matter to the Court of Appeal with directions to remand to the trial court to determine whether the class arbitration waiver is void”].) The matter must therefore be reconsidered in light of Gentry, supra, 42 Cal.4th 443, both as to the validity of the arbitration agreement as a whole and the validity of the prohibition against representative or class actions.
DISPOSITION
Assuming the matter is not moot due to Iskanian’s satisfaction with the arbitration which has been ordered, let a writ of mandate issue. This conditional writ of mandate directs the superior court to reconsider in light of Gentry whether the arbitration agreement as a whole is unconscionable and thus void and, if the arbitration agreement is valid and enforceable, to determine in light of Gentry if the prohibition against representative or class actions is nonetheless void. If either the arbitration agreement as a whole or the prohibition against representative or class actions is void, the superior court is directed to vacate the order under review and proceed consistent with the opinion in Gentry.
Iskanian shall recover his costs.
We concur: DOI TODD, J., CHAVEZ, J.
We express no opinion as to whether such discretion would be similarly exercised, should the matter come before us again in the same procedural posture after the further proceedings directed herein.
While the appeal was pending, CLS moved to dismiss the appeal as moot because it had agreed to resolve the issues on appeal by way of stipulation. However, no stipulation was ever signed by Iskanian, who deemed the terms vague and unsatisfactory, and we have denied the motion to dismiss.