Collective Bargaining Agreement Did Not Bar California Wage Lawsuit

A collective bargaining agreement between an employer and a labor union that required certain grievances to be arbitrated did not prevent covered employees from suing for statutory violations, a California appeals court ruled. Employees were therefore not obligated to arbitrate their wage and hour claims against the employer, the court said.

The employer operates food, beverage and concessions services in airports around the country, including in California. The plaintiff worked as a dishwasher at the Los Angeles International Airport beginning in August 2018.

In December 2018, the employer and a labor union entered into a collective bargaining agreement covering certain employees including dishwashers at Los Angeles International Airport.

The collective bargaining agreement defines a "grievance" as any claim or dispute between the employee and the union or between an employee and the employer that involves interpretation, application or enforcement of the agreement.

The grievance procedure provided by the agreement contains a number of steps, beginning with the requirement that the employee discuss his complaint with his manager or supervisor. If the grievance is not settled in that initial meeting, the employee may appeal by filing a written grievance with the company's general manager. If the grievance is not resolved at this step, it is to be submitted to nonbinding arbitration, and if that does not settle the matter, to final and binding arbitration.

The plaintiff filed a class-action complaint against the employer on March 13, 2019, asserting that the employer failed to pay minimum wages and overtime and failed to provide proper meal and rest breaks.

On March 13, 2020, the employer filed a motion to compel arbitration of the plaintiff's claims. The employer argued that whether the plaintiff's claims were subject to arbitration was to be decided by an arbitrator, not the court, and that the collective bargaining agreement contained a clear and unmistakable agreement to arbitrate the plaintiff's individual claims.

The plaintiff opposed the motion, arguing that the parties had not agreed that an arbitrator would decide the issue of the arbitrability of the claims and that the collective bargaining agreement did not require arbitration of claims, like the plaintiff's, that alleged violations of California law, rather than violations of the collective bargaining agreement.

The trial court denied the motion to compel arbitration. The court explained that the collective bargaining agreement did not contain a clear and unmistakable waiver of employees' rights to have the relevant issues decided by a court.

The employer appealed.

Waiving the Right to Sue             

The court first noted that when a dispute arises between parties to an arbitration agreement, the parties may disagree about two issues that must be addressed prior to resolving the merits of the dispute. First, parties may disagree about whether their arbitration agreement applies to the particular dispute. Second, parties may disagree about who—the court or the arbitrator—has the power to decide whether the dispute is arbitrable.

The appeals court agreed with the trial court's holding that arbitrability was a question for the court, not the arbitrator. Courts presume that the parties intend courts, not arbitrators, to decide threshold issues of arbitrability. Therefore, the initial question of arbitrability—whether a collective bargaining agreement requires the parties to arbitrate the particular grievance—is an issue for judicial determination unless the parties clearly and unmistakably provide otherwise, the appeals court said.

And this agreement, the court said, does not clearly and unmistakably delegate the question of arbitrability to an arbitrator. To the contrary, the agreement limits the arbitrator's powers to only those issues the parties have specifically agreed to arbitrate, the court said.

The appeals court also ruled that the trial court was correct in concluding that the plaintiff's claims are not subject to arbitration. If a collective bargaining agreement contains an arbitration clause, courts will presume that the parties intended to arbitrate claims arising under the agreement itself. This presumption does not apply, however, when a dispute concerns the meaning of a statute rather than the application or interpretation of the agreement.

A collective bargaining agreement must contain a clear and unmistakable waiver of the covered employees' right to go to court over the statutory claims alleged in the complaint.

The "clear and unmistakable" standard has been applied to a variety of statutory claims, including those arising under California's wage and hour laws, the court said.

The court concluded that the language in the agreement did not contain a clear and unmistakable waiver of the plaintiff's right to litigate his statutory wage and hour claims in court. Therefore, the court affirmed the trial court's refusal to order arbitration of the plaintiff's claims.

Wilson-Davis v. SSP America Inc., Calif. Ct. App., No. B306781 (April 9, 2021).

Professional Pointer: A collective bargaining agreement may require the arbitration of statutory claims. However, its intent to do so must be clear and unmistakable. The court found that the proper standard was not met here.

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.