EPSTEIN, P. J. —
The Wet Seal Retail, Inc. (Wet Seal), appeals from the denial of its motion to compel arbitration of this wage and hour action brought by employee Elizabeth Montano. Wet Seal also challenges the grant of Montano's motion to compel discovery responses. We affirm the order denying the motion to compel arbitration and dismiss the challenge to the discovery order as nonappealable.
In October 2011, Montano filed this putative class action against Wet Seal, alleging that it failed to offer all required meal and rest periods to its California nonexempt retail employees; failed to provide all regular and overtime pay when due or when employment terminated; and failed to provide accurate semimonthly itemized wage statements, in violation of the Labor and Business and Professions Codes, Industrial Welfare Commission wage order No. 7, and title 8 of the California Code of Regulations. She brought this action on behalf of herself and, as a class action, on behalf of all persons similarly situated and damaged by the alleged conduct during the specified time period. Her complaint included a representative claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2699).
Montano propounded various discovery requests to Wet Seal, which responded with objections but no substantive information. After an unsuccessful effort to meet and confer, Montano filed a motion to compel discovery responses. Before the hearing date for that motion, Wet Seal moved to compel arbitration of Montano's individual claims and to stay the action pending completion of arbitration.
Wet Seal's motion to compel arbitration was based on a "Mutual Agreement to Arbitrate Claims" (arbitration agreement) signed by Montano, which provided: "You and the Company hereby agree that any and all disputes, claims or controversies arising out of or relating to this Agreement, the employment relationship between the parties, the termination of this Agreement or the termination of the employment relationship, that are not resolved by their mutual agreement shall be resolved by final and binding arbitration by a neutral arbitrator."
On March 28, 2012, the trial court heard Montano's motion to compel discovery and Wet Seal's motion to compel arbitration. The transcript reflects the parties' awareness of the trial court's tentative ruling to invalidate the arbitration agreement's PAGA waiver and sever that invalid waiver from the remainder of the arbitration agreement, which was otherwise enforceable, compel arbitration of Montano's individual claims, stay the action pending completion of arbitration, and defer Montano's motion to compel further discovery responses as moot.
Later that day, the court issued its final order, but apparently did not send it to the parties. In that order, the court declined to sever the invalid waiver provision, stating in relevant part: "In terms of severing the PAGA waiver provision, the paragraph in which it is contained states that if the waiver is found to be unenforceable for any reason by a court, then the entire arbitration agreement is void and unenforceable by the parties. Thus, the PAGA waiver is not severable." Having determined that the entire arbitration agreement was unenforceable, the court denied Wet Seal's motion to compel arbitration. As to Montano's motion to compel discovery, the final order stated in relevant part: "The Court does not find that any of the objections have merit, and in light of its ruling on the motion to compel arbitration, the motion to compel further discovery responses is granted."
Based on the court's civil case summary — which indicated that the court had adopted its tentative ruling as its final ruling — the parties mistakenly assumed that the court had adhered to its tentative decision to sever the
Subsequently, the parties discovered the court actually had denied the motion to compel arbitration and had granted the motion to compel discovery. Wet Seal timely appealed from the order denying the motion to compel arbitration. (Code Civ. Proc., § 1294, subd. (a).) We deferred oral argument in this case pending decisions by the California Supreme Court in Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109 [163 Cal.Rptr.3d 269, 311 P.3d 184] and Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 [173 Cal.Rptr.3d 289, 327 P.3d 129] (Iskanian).
In Discover Bank v. Superior Court (2005) 36 Cal.4th 148 [30 Cal.Rptr.3d 76, 113 P.3d 1100], the California Supreme Court applied this savings clause
Two years later, the California Supreme Court extended Discover Bank to a workplace arbitration agreement in Gentry v. Superior Court (2007) 42 Cal.4th 443 [64 Cal.Rptr.3d 773, 165 P.3d 556] (Gentry). The court held that a class action waiver in an employment arbitration agreement should not be enforced in an overtime case if the trial court concludes, based on enumerated factors, that "class arbitration is likely to be a significantly more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowance of the class action will likely lead to a less comprehensive enforcement of overtime laws for the employees alleged to be affected by the employer's violations ...." (42 Cal.4th at p. 463.)
In Concepcion, supra, 563 U.S. ___ [131 S.Ct. 1740], the United States Supreme Court expressly overruled what it called the Discover Bank rule, which classifies most collective arbitration waivers in consumer contracts as unconscionable and essentially allows any party to a consumer contract to demand classwide arbitration. (Id. at p. ___ [131 S.Ct. at p. 1750].) "Requiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA." (Id. at p. ___ [131 S.Ct. at p. 1748].) Noting that the principal purpose of the FAA is to ensure that private arbitration agreements are enforced according to their terms, the court concluded that "class arbitration, to the extent it is manufactured by Discover Bank rather than consensual, is inconsistent with the FAA." (563 U.S. at p. ___ [131 S.Ct. at p. 1751].)
Concepcion did not address the Gentry case. Nor did it address whether California law applicable to waivers of statutory representative actions such as the PAGA, which are a means to enforce state labor laws for the benefit of
Iskanian involved facts very similar to those in our case. The employee had entered into an arbitration agreement in which employee and employer expressly waived the right to assert class action and representative action claims against each other, in arbitration or otherwise. (Iskanian, supra, 59 Cal.4th at pp. 360-361.) The employee then sought to bring a class action lawsuit against his employer on behalf of himself and similarly situated employees for failure to compensate for overtime, meal, and rest periods. He also sought to bring a representative action under the PAGA. The Supreme Court held that Gentry's rule against employment class waivers is preempted by the FAA. (59 Cal.4th at p. 364.) It reached a different conclusion as to the PAGA claims.
In enacting the PAGA, "[t]he Legislature declared that adequate financing of labor law enforcement was necessary to achieve maximum compliance with state labor laws, that staffing levels for labor law enforcement agencies
The court rejected the employer's claim that the arbitration did not violate public policy because it prohibited only representative claims, not individual PAGA claims. "[W]hether or not an individual claim is permissible under the PAGA, a prohibition of representative claims frustrates the PAGA's objectives. As one Court of Appeal has observed: `[A]ssuming it is authorized, a single-claimant arbitration under the PAGA for individual penalties will not result in the penalties contemplated under the PAGA to punish and deter employer practices that violate the rights of numerous employees under the Labor Code. That plaintiff and other employees might be able to bring individual claims for Labor Code violations in separate arbitrations does not serve the purpose of the PAGA, even if an individual claim has collateral estoppel effects. (Arias, supra, 46 Cal.4th at pp. 985-987.) Other employees would still have to assert their claims in individual proceedings.' (Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489, 502 [128 Cal.Rptr.3d 854], fn. omitted.)" (Iskanian, supra, 59 Cal.4th at p. 384.)
Based on its determination that the PAGA waiver was invalid, the trial court applied the arbitration agreement's nonseverability provision. Based on that provision, the trial court declared the entire arbitration agreement was void and unenforceable.
Finally, we turn to the portion of the order granting Montano's motion to compel further discovery responses. Wet Seal asserts the trial court should not
Wet Seal relies on Code of Civil Procedure section 1281.4, which provides that while a motion to compel arbitration is "undetermined, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until the application for an order to arbitrate is determined and, if arbitration of such controversy is ordered, until an arbitration is had in accordance with the order to arbitrate ...." (Italics added.) Wet Seal argues that an application for an order to arbitrate is "undetermined" for purposes of section 1281.4 until the completion of the appeal from the denial of that application.
In this case, the court denied the motion to compel arbitration and granted the motion to compel further discovery responses on the same date. When the court ruled on the discovery motion, the motion to compel arbitration was no longer pending, and the request for arbitration had been denied. The court thus had no obligation to stay the action under Code of Civil Procedure section 1281.4. (Berman v. Renart Sportswear Corp., supra, 222 Cal.App.2d at p. 390.)
We are not persuaded by this argument, particularly in light of counsel's remarks at the March 28 hearing. By stating "if Your Honor affirms the tentative ..." Wet Seal's counsel acknowledged the court's right to change its tentative ruling. (Italics added.) And Montano's counsel encouraged the court to exercise that right, by arguing the discovery motion was not moot in light of Montano's intention to pursue her representative PAGA action.
There is no requirement for a trial court to issue a tentative ruling, or to announce its final ruling before taking a matter under submission. We find no support in the record for Wet Seal's claim of a due process violation, which was mentioned for the first time at oral argument in this court. Finding no basis to treat the appeal from the nonappealable order as a petition for writ of mandate, we conclude that this portion of the appeal must be dismissed.
The portion of the appeal seeking review of the nonappealable order granting discovery is dismissed. In all other respects, the order is affirmed. The parties are to bear their own costs on appeal.
Willhite, J., and Manella, J., concurred.