CHER LEE FAACKS v. STORAGEPRO MANAGEMENT CO.

Full title: CHER LEE FAACKS, Plaintiff and Respondent, v. STORAGEPRO MANAGEMENT CO., Defendant and Appellant.

Court: California Court of Appeals, Third District, Nevada

Date published: Dec 29, 2021

Facts

Defendant is a California corporation that transacts business in California. The defendant employed the plaintiff as a non-exempt employee in Nevada County from August 2018 to September 2018. The appellate record does not disclose the plaintiff’s position with the defendant or any details about the defendant’s business.

As a condition of employment, plaintiff and defendant executed a mediation and arbitration agreement (arbitration agreement or agreement) drafted entirely by defendant. As relevant here, it stated: “Please understand that by signing this agreement, and except for those matters excluded, the Employee and Company waive[] any right that, it, he, or she may possess to have employment related disputes litigated in a court or by jury trial.” (Italics added.)

The arbitration agreement included a provision identifying the specific types of claims that are subject to arbitration. It stated: “Claims covered by this Agreement include, but are not limited to, claims for wages or other compensation due; claims for breach of any contract or covenant, express or implied; tort claims; claims for discrimination or harassment on bases which include but are not limited to race, sex, sexual orientation, religion, national origin, age, marital status, disability or medical condition; claims for benefits[;] . . . and claims for violation of any federal, state or other governmental constitution, statute, ordinance, regulation, or public policy including but not limited to Title VII of the Civil Rights Act, Age Discrimination In Employment Act, The Americans with Disabilities Act, Family and Medical Leave Act, Equal Pay Act and their state equivalents.”

As for excluded claims, the arbitration agreement stated: “This Agreement does not apply to or cover claims for worker’s compensation or unemployment compensation benefits; claims resulting from the default of any obligation of the Company or the Employee under a loan agreement; claims for injunctive and/or other equitable relief for intellectual property violations, unfair competition and/or the use and/or unauthorized disclosure of trade secrets or confidential information; or claims based upon an employee pension or benefit plan that either (1) contains an arbitration or other non-judicial resolution procedure, in which case the provisions of such plan shall apply, or (2) is underwritten by a commercial insurer which decides claims. Suppose either the Company or the Employee has more than one claim against the other, one or more of which is not covered by this Agreement. In that case, such claims shall be determined separately in the appropriate forum for resolution of those claims. Nothing in this Agreement shall preclude the parties from agreeing to resolve claims other than Claims covered by this Agreement under the provisions of this Agreement.” (Italics added.)

In September 2019, the plaintiff filed a class action complaint against the defendant, alleging six wage and hour claims (e.g., failure to pay wages, and failure to reimburse business expenses) and a derivative claim under the unlawful business practice prong of the UCL.

Issue

Decision

We find no merit in the defendant’s contention that the plaintiff’s UCL claim is arbitrable because it is essentially a claim for wages or other compensation due, a type of claim expressly covered by the arbitration agreement. The fatal flaw in this argument is that equitable unfair competition claims are excluded from coverage under the express terms of the agreement, and a UCL claim predicated on a violation of wage and hour laws is a separate equitable claim that is independently actionable and subject to distinct remedies than those available under the Labor Code. (See Hodge, supra, 145 Cal.App.4th at p. 284 [“[t]he UCL is not simply a legislative conversion of a legal right into an equitable one” but is instead “a separate equitable cause of action”].) Defendant offers no authority or reasoned argument persuading us that a contrary result is warranted. 

The trial court’s order denying the defendant’s motion to compel arbitration is affirmed. The plaintiff shall recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a).

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