J.C. Penney Denied Arb in Seating Action Following Iskanian

In one of the first appellate decisions to apply the California Supreme Court’s landmark Iskanian decision, the California Court of Appeal affirmed the trial court’s decision to deny J.C. Penney’s motion to compel an ex-employee’s suitable seating action to arbitration. Jones v. J.C. Penney Corp., Inc., No. B246674 (2nd Dist. Div. 4 Sept. 5, 2014) (slip op. available here). 

The plaintiff in Jones was a sales associate/cashier at J.C. Penney from November 2007 to January 2008, and then again from November 2009 to December 2009.  Jones’ complaint alleged failure to provide suitable seating, in violation of Labor Code section 1198 and California Code of Regulations, title 8, section 11070, because J.C. Penny did not allow cashiers to sit in chairs while working.  Jones also sought civil penalties under PAGA for the seating violations.  As a condition of her employment, Jones signed an arbitration agreement that covered disputes “arising from, relating to, or asserted after the termination of . . . employment.”  Slip op. at 2 (quoting the arbitration agreement). The agreement contained a class and representative actions waiver.

In a unanimous, unpublished decision authored by Justice Lee Ann Edmon, the Second Appellate District denied the defendant’s petition to compel arbitration of the plaintiff’s seating claims under PAGA. Applying Iskanian, the court held that agreements such as J.C. Penney’s that waive an employee’s right to bring a representative PAGA action are unenforceable. The court also rejected J.C. Penney’s request to stay the appeal until after the U.S. Supreme Court decides on the Iskanian defendant’s petition for a writ of certiorari. J.C. Penney argued that Iskanian conflicts with U.S. Supreme Court precedent, but the court found that the defendant had already conceded in its brief that “[u]nless employers were to ask the LWDA [Labor and Workforce Development Agency] to sign arbitration agreements, and the LWDA was to sign them, there can be no circumstances under which an aggrieved employee could arbitrate any action for PAGA penalties.” Slip op. at 12 (internal citations omitted). “Without considering whether an arbitration agreement could ever be crafted that would permit arbitration of PAGA claims, we conclude that no such arbitration agreement was crafted here.” Id. at 12-13.