On April 21, 2026, the Honorable Elaine Lu of the Los Angeles County Superior Court dismissed the class claims in Montiel v. Stone Blue, Inc. (Case No. 25STCV16784), a putative wage-and-hour class and PAGA action. The court also compelled the plaintiff’s individual claims, including the individual component of his PAGA claim, to arbitration. The court’s tentative ruling had declined to dismiss the class claims because the governing arbitration provision contains no express class action waiver. After ordering supplemental briefing on that question, the court changed course and granted dismissal.
LTL represents Defendant Stone Blue, Inc. The plaintiff’s employment was administered through a professional employer organization, and he was a member of a union whose collective bargaining agreement with the PEO governs claims under the Labor Code, the FLSA, and the applicable wage orders. That agreement routes those claims to arbitration and provides that they “may not be brought in a court of law.” Stone Blue is not a party to the agreement. The court held that Stone Blue may enforce the arbitration provision as an intended third-party beneficiary, found that the Federal Arbitration Act governs, and rejected the plaintiff’s unconscionability challenges.
The harder question was what to do with the class claims. Class arbitration requires the parties’ affirmative consent, and the agreement says nothing about class proceedings, so the class claims could not be arbitrated. The plaintiff argued that, absent an express waiver, his class claims survived and could at most be stayed. LTL argued that the controlling question was whether any forum remained in which the class claims could proceed, and that none did. The court agreed. It held that the agreement’s bar on litigating covered claims in court, combined with the unavailability of class arbitration, “necessarily means that the class claims must be dismissed as there is no valid forum for these class claims to be heard.” The court therefore concluded that the arbitration provision “implicitly includes a class action waiver.”
The ruling follows two published Court of Appeal decisions, Kinecta Alternative Financial Solutions, Inc. v. Superior Court and Cortez v. Doty Bros. Equipment Co. Both ordered or upheld dismissal of class claims under agreements that likewise contained no express class waiver. The court noted that both decisions reached that result with “scant explanation.” Its own analysis rested on two independent grounds. The first was the absence of any forum. The second was standing. Relying on the California Supreme Court’s decision in Kim v. Reins International California, Inc., the court held that once the plaintiff’s individual claims are resolved in arbitration, he will lack the continuing interest necessary to represent a class. On that basis it dismissed the class claims without prejudice.
The non-individual portion of the PAGA claim remains in court under Adolph v. Uber Technologies, Inc., and the action is stayed in its entirety pending arbitration. The decision addresses a recurring question for employers whose workforces are covered by union or PEO arbitration agreements that close the courthouse to wage claims but say nothing about class proceedings. LTL’s Caleb Liang and Kevin Kelly represent Stone Blue.