Provost v. YourMechanic: PAGA Plaintiff Cannot Be Compelled to Arbitrate Whether He Is An “Aggrieved Employee”

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In Provost v. YourMechanic, Inc., Cal. Ct. App. 4th Dist., No. D076569, Oct. 15, 2020 (slip op. available here), a California Court of Appeal again thwarted an employer’s attempt to defeat an action brought under the Private Attorneys General Act of 2004 (“PAGA”) (Cal. Lab. Code § 2699, et seq.) by seeking to compel arbitration of the plaintiff’s standing as an “aggrieved employee.” The PAGA statute defines an “aggrieved employee” as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”  Cal. Lab. Code § 2699(c).

The plaintiff’s action alleges that YourMechanic violated a myriad of Labor Code sections and that he and other “aggrieved employees” were misclassified as independent contractors. YourMechanic argued that this presents a “threshold issue” of whether Provost was an employee (as he contends) or an independent contractor. The defendant’s position was that, under its arbitration agreement with the plaintiff, “any private dispute arising out of or relating to [the plaintiff’s] relationship with the Company” was required to be arbitrated before he could proceed with his PAGA action. YourMechanic moved to compel the plaintiff to arbitrate whether he was an “aggrieved employee” within the meaning of the Labor Code.

The trial court denied the motion, and the Court of Appeal affirmed, largely based on Williams v. Superior Court, 237 Cal.App.4th 642 (2015), and its progeny. In Williams, the trial court granted the employer’s motion to compel a plaintiff’s “individual claim” that he had been subject to Labor Code violations, and was therefore an aggrieved employee. Williams held that a single representative cause of action under PAGA cannot be split into an arbitable “individual” claim and a non-arbitrable representative claim. Id. at 645. A long series of cases have followed Williams on this point. Slip op. at 11-12 (collecting cases).

Provost’s conclusion was buttressed by the recent decision in Kim v. Reins International California, Inc., 9 Cal.5th 73 (2020) (holding that employee who settles and dismisses individual claims for Labor Code violations does not lose standing to pursue a claim under PAGA). Kim cited with approval cases in which “[a]ppellate courts have rejected efforts to split PAGA claims into individual and representative components.” Id. at 88. Following Kim, Provost noted that, in PAGA-only actions, “standing . . . cannot be dependent on the maintenance of an individual claim because there is no claim for individual relief.” Slip op. at 14. In other words, “a PAGA-only representative action is not an individual action at all, but instead is one that is indivisible and belongs solely to the state.” Id. at 2 (emphasis in original).  Therefore, no part of any PAGA-only action can be compelled to arbitration. Id.

Authored by:
Robert Friedl, Senior Counsel