Bravo v. Radc Enters., Inc.
Bravo v. Radc Enters., Inc.
Opinion of the Court
*921This employment case concerns a choice-of-law clause in an arbitration agreement. The trial court interpreted the clause to mean some but not all individual employment claims must be arbitrated. We conclude all of them must be arbitrated.
The facts are simple. RADC Enterprises, Inc. hired Mel R. Bravo to manage a store. The parties signed a two-page arbitration agreement covering "all disputes" arising from the employment relationship. On page two, near *922the end, the agreement added a one-sentence choice-of-law provision: "This Agreement shall be governed by and shall be interpreted in accordance with the laws of the State of California."
After RADC fired him, Bravo sued RADC on individual employment claims, as well as on representative claims under the Private Attorneys General Act of 2004 (PAGA). RADC moved to stay Bravo's PAGA claims and to compel arbitration on his individual claims.
The trial court severed and stayed the PAGA claims. The court found RADC engaged in interstate commerce and thus the Federal Arbitration Act governed the agreement. But the court compelled arbitration for only three of Bravo's nine individual claims, denying the arbitration motion on the remaining six individual claims. The logic was that, while the Federal Arbitration Act did apply, the choice-of-law sentence meant the parties wanted California law to govern their relationship. California Labor Code section 229 directs courts to disregard agreements to arbitrate wage claims, so the trial court declined to send Bravo's remaining claims to arbitration. ( Lab. Code, § 229.)
*401On appeal, RADC correctly contends the choice-of-law provision did not mean the parties wanted to oust arbitration from their arbitration agreement. RADC rightly says the trial court should have sent all Bravo's individual claims to arbitration.
We independently review contract interpretation where, as here, there is no extrinsic evidence about contract meaning and the facts are undisputed.
As RADC correctly explains, the choice-of-law clause does not remove any arbitration from this arbitration agreement. The first textual clue is the title: "ARBITRATION AGREEMENT." This agreement is for arbitration and not against it.
The text of the agreement swiftly announces its objective: the parties will arbitrate "any and all disputes" arising from Bravo's employment, "including any claims brought by the Employee related to wages" under the California Labor Code. The main point of the deal was to arbitrate all employment disputes. The parties could not have intended to apply Labor Code section 229 to this contract because that section prohibits arbitrating wage claims and requires courts to disregard private agreements to arbitrate. ( Lab. Code, § 229.)
*923Applying this California law would contradict the parties' intent to arbitrate "any and all disputes," including claims "related to wages ...."
Interpreting the choice-of-law provision to negate the purpose of the two-page agreement is incorrect. Readers must assume legal authors mean to draft texts that cohere. To assume otherwise departs from common sense and makes mischief. So we read documents to effectuate and harmonize all contract provisions. (E.g., Mastrobuono v. Shearson Lehman Hutton, Inc. (1995)
The choice-of-law provision becomes consistent with the parties' intent to arbitrate all disputes when we read "the laws of the State of California" to include substantive principles California courts would apply, but to exclude special rules limiting the authority of arbitrators. (See Mastrobuono,
The trial court cited Mastick v. TD Ameritrade, Inc. (2012)
*402DISPOSITION
We affirm part of the trial court's order and reverse part of it. We affirm the part severing the agreement provision requiring the parties to arbitrate the PAGA claims. We also affirm the order granting RADC's motion as to three *924individual claims. We reverse the order denying the motion as to the remaining six individual claims. RADC is awarded costs on appeal.
WE CONCUR:
GRIMES, Acting P. J.
ADAMS, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.