In Rebolledo v. Tilly’s, Inc., ___ Cal.App.4th ___  (August 6, 2014), the California Court of Appeal (Fourth Appellate District, Division Three) affirmed the order of the Orange County Superior Court (Judge Perk) denying defendant’s motion to compel arbitration of plaintiff’s wage and hour class action claims.

Plaintiff was employed in defendant employer’s warehouse from July 6, 2000 to December 28, 2001, and then again from January 28, 2002 to October 30, 2012.  After her employment ended, plaintiff filed a putative class action for meal and rest period violations as well as other, related, wage and hour claims.  Defendant filed a motion to compel arbitration, relying on three separate arbitration agreements signed by plaintiff. The first of these was signed in 2001, during plaintiff’s first period of employment. That agreement specifically excepted from its provisions “matters governed by the California Labor Commissioner.” The second of these was signed in 2004, during plaintiff’s second period of employment.  That agreement, too, contained an exception for “any matter within the jurisdiction of the California Labor Commissioner.” The third agreement was signed in 2005 and, unlike the previous two agreements, did not contain an exception for any claims that would fall within the “jurisdiction of the California Labor Commissioner.” It also did not contain the signature of any representative of defendant. The trial court denied the motion, finding that the first two agreements (2001 and 2004) specifically excepted plaintiff’s wage and hour claims from arbitration and the third (2005) agreement was unenforceable, in part, because it was a modification of the prior agreements which required the signatures of three of defendant’s executives, which were lacking.

The court of appeal agreed.  The court held that the 2001 and 2004 agreements did not compel arbitration of plaintiff’s claims because they fell “into the category of ‘matters governed by’ and ‘matter[s] within the jurisdiction’ of the Labor Commissioner.” The court went on to find that because the 2005 Agreement did not contain this same express exemption, it was a modification of the prior agreements that required the signature of three executives of defendant. Since these signatures were lacking, however, that agreement was unenforceable. In so holding, the court was careful to note that although employers can sometimes unilaterally modify an employment contract, there was no provision in the earlier agreements granting defendant a unilateral right to modify the arbitration terms in this circumstance.