Private Attorneys General Act Review – 2025

that the plaintiff’s claims fell within its scope. The Court of Appeal explained that this interpretation aligned with California procedural statutes and case law, which require the party seeking arbitration to prove the agreement’s applicability to the dispute. The Court of Appeal also determined that the plaintiff’s individual claims for civil penalties did not seek recovery of unpaid wages, which was the only category of PAGA claims the agreement specified for arbitration in the parties’ agreement. For these reasons, the Court of Appeal affirmed the trial court’s ruling denying the defendant’s motion to compel arbitration. A group of former employees in Fredeen, et al. v. California Cemetery & Funeral Services, LLC, 2024 Cal. App. Unpub. LEXIS 3583 (Cal. App. 2d Dist. June 11, 2024), filed an action asserting claims under the PAGA. The trial court denied the defendant’s motion to compel arbitration of the plaintiffs’ claims. On appeal, the California Court of Appeal affirmed the trial court’s ruling. The trial court found the arbitration agreement both procedurally and substantively unconscionable and that it could not sever the problematic terms, thus ruling the agreement unenforceable. The defendant argued that the trial court erring in finding the agreement procedurally unconscionable, and disputed the trial court’s finding of substantive unconscionability, arguing it was based on speculation and not on the actual terms agreed upon. Additionally, the defendant asserted that the trial court should have severed the unconscionable terms and enforced the rest of the agreement. The Court of Appeal found that the exclusions clause in the agreement, which excluded from arbitration any claims brought “to enforce any non-competition or confidentiality agreement which may exist between the parties” was substantively unconscionable because the agreement subjected employees to provisions that the Legislature expressly outlawed. Id. at *13. The Court of Appeal also determined that the confidentiality clause was sufficiently restrictive to impair the plaintiffs’ ability to conduct informal discovery and investigate their respective claims. In addition, the Court of Appeal ruled that the confidentiality clause was one-sided in that it allowed the defendant to disclose the arbitration to virtually anyone involved with its business and the claim itself while the plaintiffs could only disclose the proceeding to their legal counsel, their tax preparers, and anyone else that can compel the disclosure under the law. Id. at *14. Accordingly, the Court of Appeal agreed that the confidentiality clause was substantively unconscionable. The Court of Appeal also ruled that the trial court did not abuse its discretion in declining to sever the offending provisions, as an employment arbitration agreement with more than one unconscionable provision is disfavored and “can be considered permeated by unconscionability if it ‘contains more than one unlawful provision.” Id. at *18. For these reasons, the Court of Appeal affirmed the trial court’s ruling denying the defendant’s motion to compel arbitration. Finally, in Mondragon, et al. v. Sunrun, Inc., 2023 Cal. Super. LEXIS 19503 (Cal. Super. Ct. Mar. 31, 2024), the plaintiff filed a class action alleging violation of the California Labor Code and brought a claim pursuant to the PAGA. The defendant filed a motion to compel arbitration, and the trial court denied the motion. The arbitration agreement between the parties explicitly excluded PAGA claims from arbitration. The defendant argued for the enforcement of arbitration based on federal and state law favoring arbitration agreements. The court determined that the arbitration agreement did not explicitly or implicitly delegate the issue of arbitrability to the arbitrator. The court found no clear and unmistakable language in the agreement regarding delegation but noted that the agreement explicitly excluded PAGA claims from arbitration, which the court found to be clear and unambiguous. For these reasons, the trial court denied the defendant’s motion to compel arbitration. 3. Notable California Federal Court Rulings In Tehrani, et al. v. Amazon Studios, LLC, 2024 U.S. Dist. LEXIS 140485 (C.D. Cal. Aug. 7, 2024), the plaintiff, a background actor who worked on the film “Candy Cane Lane,” filed a state court class action alleging that the defendant failed to properly calculate her pay and other non-union background actors’ wages. Id. at *1. The plaintiff asserted that the defendant did not account for various types of “non-discretionary incentive pay,” such as wet work, smoke work, and night premiums when calculating overtime pay. Id. at *1-2. Additionally, the plaintiff contended that the defendant failed to provide the required meal and rest period premiums on one of her workdays. The plaintiff’s action asserted claims for failure to pay meal and rest period premiums, failure to pay overtime wages, failure to pay wages on separation, failure to provide accurate wage statements, unfair business practices, and penalties under the PAGA. The defendant removed the case, arguing that the plaintiff’s claims were preempted by federal labor law because some of the background actors on the set were covered by a collective bargaining agreement (CBA) with SAG-AFTRA. The plaintiff filed a motion to remand and asserted that her claims were not preempted because she was not covered by the CBAs on the days in question. The plaintiff provided evidence showing she received non-union pay for her work on February 7 and 13, 2023, and

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