The plaintiff, in this case, alleged a single cause of action against the former employer under the California Private Attorneys General Act of 2004 (PAGA). (Lab. Code, § 2698 et seq.) The California Supreme Court in Iskanian v. CLS Transportation Los Angeles LLC (2014) 59 Cal.4th 348 (Iskanian) and Court of Appeal in Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th 439 (Betancourt), had held that an employee cannot be compelled to arbitrate a PAGA cause of action on the basis of a pre-dispute arbitration agreement.
The Icee Company and J & J Snack Foods Corp. (collectively, Icee) appealed a trial court’s order denying their motion to compel arbitration of a dispute with a former employee. The employee, Taraun Collie, alleged a single cause of action against Icee under the Private Attorneys General Act of 2004 (PAGA). Collie alleged that he worked for Icee from November 2014 to August 2015. When he began his employment, he signed an arbitration agreement. In July 2016, Collie filed his PAGA complaint on behalf of himself and other aggrieved employees. Icee moved to compel arbitration of Collie’s “individual claim” in August 2018. It argued that the parties had agreed to bilateral arbitration only, so Collie had to arbitrate his PAGA cause of action on an individual basis—that is, he could not seek PAGA penalties on behalf of other Icee employees. And because Collie had agreed to arbitrate all claims or controversies with Icee, he had effectively waived his right to bring a PAGA action on behalf of other employees in any forum. The trial court denied Icee’s motion, concluding that the California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles LLC, 59 Cal.4th 348 (2014), required that result. The Court of Appeal concluded that under Iskanian, an employee could not be compelled to arbitrate a PAGA cause of action on the basis of a pre-dispute arbitration agreement, thereby affirming the trial court.