“Courts should not assume that the parties agreed to arbitrate arbitrability unless there is ‘clea[r] and unmistakabl[e]’ evidence that they did so.”

💡 This establishes the heightened burden defendants must meet to delegate arbitrability questions to the arbitrator rather than the court.

“The specific issue here is whether the ‘clear and unmistakable’ rule is met in circumstances where, at the end of a three-step process, an employee can discover a point known to his employer from the outset: that he was agreeing that the arbitrator would decide his or her own jurisdiction.”

💡 The court identifies the fundamental information asymmetry where only the employer knew the true meaning of the arbitration clause from the beginning.

“The raison d’etre of the ‘clear and unmistakable’ rule is that ‘the law is solicitous of the parties actually focusing on the issue,’ that is, ‘the desideratum that parties actually think about the idea of replacing the judge with an arbitrator as far as the threshold issue of arbitrability is concerned.’ It is hard to avoid concluding that the ‘desideratum’ of ‘actually focusing’ on the issue is entirely missing here.”

💡 This explains why the law requires more than just reference to external rules: both parties must actually understand they are giving up the right to have a judge decide basic threshold questions.

“Absent unusual circumstances, an employer who intends to delegate issues of arbitrability to the arbitrator must express that intent in the arbitration agreement itself. Anything less is not clear and unmistakable evidence that both parties understood and intended that the arbitrator would decide arbitrability questions.”

💡 This creates a clear rule for employers: you cannot bury delegation clauses in external documents and claim the worker agreed to them.

“In these circumstances, it is obvious that only one of the parties unmistakably intended or knew it was supplanting the judge who ordinarily decides arbitrability issues with the arbitrator.”

💡 The court recognizes the fundamental unfairness when only the employer understands the true meaning of the contract terms.

“I acknowledge that I have received and reviewed a copy of the Company’s Mutual Arbitration Policy (‘MAP’) . . . and I understand that the MAP is a condition of my employment.”

💡 This shows the coercive nature of the arbitration agreement: the worker had to agree or lose the job opportunity.

“I agree to forego any right to bring claims on a class or collective basis.”

💡 This provision prevented Villalobos from joining with other similarly situated workers to challenge systemic wage violations.

“Nothing in either document stated that the arbitrator had the power to rule on the existence, scope or validity of the arbitration agreement.”

💡 The court emphasizes that neither of the two documents the parties actually signed contained any delegation language.

“The trial court then turned to the substance of plaintiff’s opposition to arbitration, ultimately concluding plaintiff ‘was among a class of workers engaged in foreign or interstate commerce,’ and the FAA did not apply to the agreement; ‘[t]he California Arbitration Act (CAA) and other provisions of California law apply instead.'”

💡 This finding means California law protections apply without being preempted by the Federal Arbitration Act.

“Under Labor Code section 229, if a cause of action seeks to collect due and unpaid wages pursuant to sections 200 through 244, the action may be maintained in court despite an agreement to arbitrate.”

💡 This California law provision shields minimum wage claims from forced arbitration.

“Under California law, no part of plaintiff’s PAGA claim was arbitrable, stating that ‘[s]tate law rules that are preempted by the FAA are nevertheless good law in cases that do not involve the FAA.'”

💡 Because the FAA does not apply to this case, California’s protective rules for PAGA claims remain in effect.

“Because the state is the real party in interest in a PAGA action and a PAGA plaintiff asserts the claim solely on behalf of, and as the proxy for, the state, the employee’s predispute arbitration agreement does not subject the claim to arbitration because the state never agreed to arbitrate the claim.”

💡 An individual worker cannot waive the state’s right to pursue labor law enforcement on behalf of all affected employees.

“Defendants do not cite the record because they cannot. The trial court’s ruling is entirely devoid of any discussion of unconscionability, in any context, and rightly so, since plaintiff has never contended the arbitration agreement was unconscionable.”

💡 The appellate court calls out defendants for making up arguments the trial court never made.

“Thus, Viking River requires enforcement of agreements to arbitrate a PAGA plaintiff’s individual claims if the agreement is covered by the FAA.”

💡 The U.S. Supreme Court’s ruling in Viking River that allows splitting PAGA claims does not apply when the Federal Arbitration Act does not apply.

“Minimum wages that are ‘due and unpaid’ have, by definition, not been timely paid to an employee who was discharged or quit, thereby entitling the employee to waiting-time penalties.”

💡 This explains why the waiting time penalties claim was properly kept in court along with the underlying minimum wage claim.