Woodie v. AER Electronics, Inc. CA1/3

Filed 1/20/21 Woodie v. AER Electronics, Inc. CA1/3 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

RAYMOND WOODIE, Plaintiff and Appellant, A159317 v. AER ELECTRONICS, INC., et al., (Alameda County Defendants and Respondents. Super. Ct. No. RG18892555)

Raymond Woodie appeals from an order denying his motion to declare his arbitration agreement (Agreement) with former employer AER Electronics, Inc., void and unenforceable because it purports to waive his right to bring a representative action under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.) (PAGA). We reverse. The Agreement includes a nonseverable class action waiver that, by its plain language, encompasses representative claims under PAGA that cannot be waived. It is therefore void and unenforceable. BACKGROUND Woodie filed a putative class action against AER Electronics, Inc., AER Worldwide Holdings, LLC, and AER Management Services, Inc. (jointly, AER), under the unfair competition law (Bus. & Prof. Code, § 17200 et seq.) (UCL), alleging numerous violations of California wage and hour laws. In response, AER moved to compel arbitration pursuant to the Agreement.

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Following procedural twists and turns not relevant to this appeal, Woodie moved the trial court to declare the Agreement unenforceable because it contains a nonseverable class action waiver that unlawfully waived his right to bring a PAGA action. The class action waiver provision states: “[T]here will be no right or authority for any dispute to be brought, heard or arbitrated as a class, collective or representative action or as a class member in any purported class, collective action or representative proceeding (‘Class Action Waiver’). Notwithstanding any other clause contained in this Agreement, the preceding sentence shall not be severable from this Agreement in any case in which the dispute to be arbitrated is brought as a class, collective or representative action.” (Boldface omitted.) The trial court rejected Woodie’s contention that the waiver encompassed PAGA claims: “Because the Arbitration Agreement does not mention PAGA, . . . it is at worst ambiguous whether the phrase ‘representative action’ is intended to encompass qui tam actions brought under PAGA. Given an ambiguity, ‘[a]n interpretation which gives effect is preferred to one which makes void.’ ” The court therefore construed the class action waiver to exclude PAGA actions and ruled that the clause and, with it, the Agreement were enforceable. This appeal is timely. DISCUSSION We first clarify what is not contested in this appeal. It is undisputed that agreements that purport to waive an employee’s right to bring a PAGA action are unlawful and unenforceable. As the Supreme Court explained in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian), “the Legislature’s purpose in enacting the PAGA was to augment the limited enforcement capability of the [Labor and Workforce Development]