Arbitration HearingIn Garden Fresh Restaurant Corp. v. Superior Court, ___ Cal.App.4th ___  (November 17, 2014), the California Court of Appeal (Fourth Appellate District, Division One) affirmed the order of the San Diego County Superior Court (Judge Wohlfeil) granting defendant’s motion to compel plaintiff’s representative action for wage and hour violations, but reversed the portion of the order that left it to the arbitrator to decide whether class arbitration was required.

Plaintiff was employed by defendant employer from June 2006 to June 2013, during which time she signed two arbitration agreements.  Nevertheless, Plaintiff filed a class action “on behalf of herself and all other similarly situated current and former employees,” asserting that defendant committed a number of wage and hour violations, including failure to pay overtime wages and failure to provide accurate itemized wage statements.  In addition, Plaintiff asserted representative claims for Labor Code penalties pursuant to California’s Private Attorney General Act (“PAGA”).  Defendant filed a petition to compel arbitration, arguing that Plaintiff’s claims should be sent to arbitration on an individual basis.  The trial court granted defendant’s petition to compel but left it to the arbitrator to decide whether the parties’ agreements contemplated class and/or representative arbitration. Defendant petitioned for review, arguing that where an arbitration agreement is silent on the issue whether class and/or representative arbitration is available it is the trial court’s responsibility to determine whether class and/or representative claims could be pursued in arbitration.

The appellate court agreed with defendant, finding that “the availability of class and/or representative arbitration is a question of arbitrability, and is therefore a gateway issue for a court to decide, in the absence of a clear indication that the parties intended otherwise, rather than a subsidiary one for an arbitrator to decide.”  Additionally, the court concluded that the court should also decide whether the parties agreed to arbitrate plaintiff’s PAGA claim. The court, noted, however, that in doing so the trial court should consider the California Supreme Court’s ruling in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014), from which “one might reasonably conclude that a court could never compel arbitration of a PAGA claim . . . .”