Unreported / Non-Citable
Background
Jose Hernandez, a former employee of Luxottica of America Inc., filed a putative class action in California Superior Court, Fresno County, on July 8, 2026, alleging eleven wage-and-hour claims including failure to pay minimum and overtime wages, meal and rest period violations, waiting time penalties, wage statement violations, unreimbursed business expenses, unfair competition, and PAGA violations. Luxottica removed the case to the Eastern District of California on August 17, 2026, and moved to compel arbitration, dismiss the class claims, and stay the representative PAGA claims. Hernandez filed a non-opposition to the motion on September 4, 2026.
During his employment from March 20, 2022, to December 8, 2025, Hernandez signed a Dispute Resolution Agreement (DRA) as a condition of employment. The DRA expressly stated it was enforceable under the Federal Arbitration Act and required arbitration of any and all disputes arising out of employment, including wage claims. It contained a Class and Collective Action Waiver requiring claims to be brought on an individual basis only, and a separate PAGA Individual Action Requirement providing that PAGA claims must be arbitrated individually. The DRA also included a delegation clause giving the arbitrator exclusive authority to resolve disputes over the agreement's validity, scope, applicability, enforceability, or waiver.
The Court’s Holding
The magistrate judge first found that the FAA applied because the DRA expressly stated it was enforceable under and subject to the Federal Arbitration Act, which alone brought it within the FAA's purview. Turning to the gateway issues of arbitrability, the court found that the DRA's delegation clause clearly and unmistakably assigned questions of validity, scope, and enforceability to the arbitrator, so any challenges to the DRA itself had to be submitted to arbitration. The court therefore recommended compelling arbitration of all of Hernandez's individual claims, including his individual PAGA claims, citing Viking River Cruises v. Moriana.
The court further found that the DRA's class action waiver was enforceable under Epic Systems Corp. v. Lewis, requiring dismissal of the putative class claims. As to the non-individual, representative PAGA claims, the court recommended a stay pending completion of individual arbitration, reasoning that arbitration would determine whether Hernandez had standing as an aggrieved employee to pursue representative claims under Adolph v. Uber Technologies. The court ordered the October 28, 2026 hearing vacated, stated that all proceedings including Plaintiff's discovery must be stayed pending determination of the motion, and recommended that all further court proceedings be stayed pending completion of binding arbitration of Plaintiff's individual claims. Because these are findings and recommendations under 28 U.S.C. § 636(b)(1)(B), they are subject to objection and review by the assigned district judge.
Key Takeaways
- The magistrate judge recommended granting Luxottica's motion in full: compelling individual arbitration, dismissing the class claims, and staying the representative PAGA claims and all further court proceedings.
- The DRA's delegation clause was decisive on gateway issues—the court found that challenges to the agreement's validity or enforceability had to be decided by the arbitrator, not the court, and declined to reach Luxottica's alternative arguments.
- The class action waiver was enforced under Epic Systems, leading to the recommendation that the putative class claims be dismissed rather than stayed.
- The representative PAGA claims were stayed rather than dismissed because the arbitrator's determination of whether Hernandez is an aggrieved employee will affect his standing to pursue non-individual PAGA relief under Adolph v. Uber.
- These are findings and recommendations only; the parties have fourteen days to file objections before the assigned district judge reviews them under 28 U.S.C. § 636(b)(1)(C).
Why It Matters
This recommendation illustrates how employers in the Ninth Circuit can use combined delegation clauses, class action waivers, and PAGA individual-action requirements to funnel wage-and-hour class actions into individual arbitration. Even where a plaintiff files a non-opposition, the court independently confirmed that the FAA applied, that arbitrability was delegated to the arbitrator, and that Epic Systems and Viking River Cruises required enforcement of the individual-arbitration terms.
The recommendation also reflects the post-Adolph approach to representative PAGA claims: rather than dismissing them, courts stay them pending individual arbitration because the arbitrator's finding on aggrieved-employee standing will determine whether the plaintiff can proceed on behalf of other workers. The case remains subject to district judge review, so the recommendations are not yet final.