In a significant legal development, Stephen Lemm has filed a petition for writ of mandate against Ecolab Inc., challenging an order compelling arbitration of his individual claims under the Private Attorneys General Act (PAGA) and dismissing his non-individual PAGA claims. The complaint was filed in the Superior Court of Los Angeles County on March 4, 2021, with Judge Steven J. Kleifield presiding over the case.
The dispute began when Lemm filed a complaint against Ecolab Inc. on June 19, 2019, alleging improper calculation of overtime payments under PAGA. This initial case saw cross-motions for summary adjudication and ultimately resulted in a summary judgment in favor of Ecolab. Subsequently, on March 4, 2021, Lemm filed another complaint alleging violations related to reporting time and split shift wages. These cases were deemed related by the court, with the first case designated as the lead.
Ecolab moved to compel arbitration based on an agreement that included a waiver of class, collective, or representative actions. The arbitration agreement specified that disputes about the validity or arbitrability of this waiver would be decided by a court rather than an arbitrator. Despite Lemm's opposition citing California law and arguing that Ecolab had waived its right to compel arbitration through extensive litigation conduct, the trial court granted Ecolab's motion based on the U.S. Supreme Court's decision in Viking River Cruises v. Moriana.
Lemm contended that his waiver of representative PAGA claims was invalid under California law and argued that even if his individual PAGA claims were ordered into arbitration, he retained standing to pursue non-individual PAGA claims in court. The trial court disagreed and dismissed his non-individual PAGA claims while ordering arbitration for his individual claims.
On appeal, Lemm argued that the dismissal of his non-individual PAGA claims was erroneous and should be reversed based on recent legal developments. Specifically, he cited Adolph v. Uber Technologies Inc., where the California Supreme Court ruled that an employee retains standing to pursue non-individual PAGA claims even if their individual claims are sent to arbitration.
The appellate court agreed with Lemm’s position and found that he continues to have standing to pursue non-individual PAGA claims in court despite his individual claims being ordered into arbitration. Consequently, they granted Lemm’s petition for writ of mandate and directed the superior court to vacate its previous order dismissing non-individual PAGA claims.
Representing Stephen Lemm were attorneys from The Hathaway Law Firm and Palay Hefelfinger including Alejandro P. Gutierrez, Daniel J. Palay, and Brian D. Hefelfinger. Ecolab Inc.'s legal team comprised Michael J. Gray, Kelsey A. Israel-Trummel, and Margaret Adema Maloy from Jones Day law firm.
The case ID is B3825695 (Los Angeles County Super Ct No: 21STCV08647).