Judge: Armen Tamzarian, Case: 23STCV17811, Date: 2024-04-16 Tentative Ruling

Case Number: 23STCV17811    Hearing Date: April 16, 2024    Dept: 52

Defendants’ Motion to Compel Arbitration

Defendants CrossTown Electrical & Data, Inc., Justin Adkins, Eric Hudson, and Alex Zepeda move to compel arbitration of this action by plaintiff Eric Vasquez.

Evidentiary Objections

            Defendants make numerous objections to plaintiff’s evidence.  All objections are overruled.  

Existence of Agreement

            Plaintiff argues defendants fail to prove any arbitration agreement between the parties exists.  Defendants rely on arbitration provisions in two collective bargaining agreements (CBAs) in effect from 2018-2022 (Heermance Decl., Ex. A) and 2022-2026 (id., Ex. B), respectively. 

Plaintiff argues there is no agreement because the parties did not sign the CBAs.  Individual members of a union are not required to sign the CBA.  (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 542 (Mendez) [despite not signing, “as a member of the union, Mendez was bound by the terms of the collective bargaining agreement”].)  Defendants establish the parties were bound by these CBAs.  CrossTown is a member of the Associated General Contractors of California.  (Heermance Decl., ¶ 2.)  That association entered the first CBA with a union, The Southern California District Council of Laborers.  (Id., ¶ 2, Ex. A, p. 58.)  CrossTown itself executed the first CBA with the union.  (Id., ¶ 2, Ex. B, p. CED000313.)  Plaintiff was a member of that union.  (Id., ¶ 4.)  The CBAs, including the arbitration provisions, apply to plaintiff.

Waiver

            Plaintiff argues defendants waived the right to arbitrate.  “[A] party who resists arbitration on the ground of waiver bears a heavy burden [citation], and any doubts regarding a waiver allegation should be resolved in favor of arbitration.”  (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1195.)  “[M]erely participating in litigation by itself” does not result in waiver.  (Id. at p. 1203.)  Delay alone is insufficient for waiver.  (Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 663 [14-month delay “insufficient to support the waiver”; Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 376 [no waiver despite three years of litigation].) 

In determining waiver, “ ‘[t]he relevant factors include whether the party seeking arbitration (1) has “previously taken steps inconsistent with an intent to invoke arbitration,” (2) “has unreasonably delayed” in seeking arbitration, (3) or has acted in “bad faith” or with “willful misconduct.” ’ ”  (Adolph v. Coastal Auto Sales, Inc. (2010) 184 Cal.App.4th 1443, 1450.)

First, defendants took minimal steps inconsistent with an intent to invoke arbitration.  They conducted some discovery, but there is no indication they “gained information about plaintiff’s case they could not have learned in an arbitration.”  (Khalatian v. Prime Time Shuttle, Inc., supra, 237 Cal.App.4th at p. 663.)       

Second, defendants did not unreasonably delay seeking arbitration.  They answered the complaint on September 5, 2023, and moved to compel arbitration on February 26, 2024.  Defendants also present evidence they did not know they had a right to compel arbitration.  Benjamin Heermance states, “CrossTown did not recall the arbitration requirement in the CBA until on or about February 7, 2024 upon detailed discussion with Defendants’ defense counsel.  Had CrossTown recalled earlier, CrossTown would have notified defense counsel of the Arbitration requirement much earlier.”  (Heermance Decl., ¶  6.) 

Third, there is no evidence defendants acted in bad faith.

The court concludes defendants did not waive the right to compel arbitration.

Agreement to Arbitrate Statutory Claims

Plaintiff argues that a CBA cannot require arbitration of statutory claims without a clear and unmistakable waiver of the right to bring a civil action.  Plaintiff relies on authority that imposes such a requirement for “statutory discrimination claims,” not statutory claims in general.  A “collective bargaining agreement” must “contain a clear and unmistakable agreement to arbitrate statutory discrimination claims.”  (Mendez, supra, 220 Cal.App.4th at p. 544 [FEHA claim]; accord Vasquez v. Superior Court (2000) 80 Cal.App.4th 430, 435 [FEHA claim, stating “ ‘In the collective bargaining context, the parties “must be particularly clear” about their intent to arbitrate statutory discrimination claims’ ”]; Ibarra v. United Parcel Service (5th Cir. 2012) 695 F.3d 354, 356 [“The grievance process established in the CBA forms the exclusive remedy for Ibarra’s Title VII claim only if the CBA clearly and unmistakably waives Ibarra’s right to pursue her Title VII claim in a judicial forum”].)  Plaintiff does not allege a statutory discrimination claim.  He alleges various Labor Code violations, whistleblower retaliation, unfair competition, and tort claims. 

Assuming the heightened requirement applies, both CBAs meet it.  The 2018-2022 CBA requires arbitration of “all employee disputes concerning violations of, or arising under Wage Order 16 …, the California Labor Code Sections identified in California Labor Code section 2699.5 as amended, the California Private Attorneys General Act (Labor Code section 2698, et seq.), and federal, state and local law concerning wage-hour requirements, wage payment and meal or rest periods, including claims arising under the Fair Labor Standards Act. …   To ensure disputes are subject to this grievance procedure in accordance with the intended scope of coverage set forth herein, Statutory Disputes also include any contract, tort or common law claim concerning the matters addressed in the foregoing laws.”  (Heermance Decl., Ex. A, p. 63.) 

The 2022-2026 CBA requires arbitration of “all employee claims or disputes concerning violations of, or arising under Wage Order 16 …, the California Labor Code Sections identified in California Labor Code section 2699.5 as amended, all derivative claims under California Business and Professions Code section 17200, et seq., all associated penalties, and federal, state and local law concerning wage-hour requirements, wage payment and meal or rest periods, including claims arising under the Fair Labor Standards Act. … Statutory Disputes also include any contract, tort or common law claim concerning the matters addressed in the foregoing laws.”  (Heermance Decl., Ex. B, p. 64.)  The agreement further provides, “In addition to the claims listed above, the parties have also agreed to provide for final and binding arbitration of any and all claims that could be asserted under all local, state and federal anti-discrimination laws, including but not limited to the California Fair Employment and Housing Act, Title VII of the Civil Rights Act 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and the California Family Rights Act.  All claims for discrimination, harassment or retaliation in employment…or any other basis that is protected under any of those laws, as well as all related or similar claims (including but not limited to those for wrongful termination in violation of public policy, intentional infliction of emotional distress, violation of 42 U.S.C. section 1981, and retaliation in violation of Labor Code section 1102.5), shall be resolved exclusively under and in accordance with the procedure for settlement of grievances and disputes set forth in this Appendix C to the Agreement and not in a court of law.”  (Id., pp. 64-65.) 

These provisions specifically require arbitration of statutory and tort claims.  In contrast, in Mendez, the arbitration agreement generically required arbitration of undefined “grievances” (220 Cal.App.4th at p. 538), and separately had “general reference to complying with and abiding by all state and local discrimination laws” but did not “explicitly incorporate[] any of the provisions of FEHA.”  (Id. at p. 545.) 

The CBAs’ arbitration provisions require plaintiff to arbitrate all 11 causes of action alleged in the complaint.

Labor Code § 229

Plaintiff argues his claims are not arbitrable under Labor Code section 229, which provides, “Actions to enforce the provisions of this article for the collection of due and unpaid wages claimed by an individual may be maintained without regard to the existence of any private agreement to arbitrate.” 

Defendants establish the Federal Arbitration Act (FAA) applies and therefore preempts that section.  “In matters in which the FAA applies, it preempts Labor Code section 229, requiring arbitration of claims that otherwise could be resolved in court.”  (Performance Team Freight Systems, Inc. v. Aleman (2015) 241 Cal.App.4th 1233, 1240.)  “The FAA governs arbitration provisions in contracts that involve interstate commerce.”  (Mastick v. TD Ameritrade, Inc. (2012) 209 Cal.App.4th 1258, 1263.)  The Supreme Court of the United States has “interpreted the term ‘involving commerce’ in the FAA as the functional equivalent of the more familiar term ‘affecting commerce’—words of art that ordinarily signal the broadest permissible exercise of Congress’ Commerce Clause power.  [Citation.]  Because the statute provides for ‘the enforcement of arbitration agreements within the full reach of the Commerce Clause,’ [citation], it is perfectly clear that the FAA encompasses a wider range of transactions than those actually ‘in commerce’—that is, ‘within the flow of interstate commerce.’  [Citation.]”  (Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56.)  “Congress’ Commerce Clause power ‘may be exercised in individual cases without showing any specific effect upon interstate commerce’ if in the aggregate the economic activity in question would represent ‘a general practice ... subject to federal control.’ ”  (Id. at pp. 56-57.)

Benjamin Heermance, the Chief Financial Officer of defendant CrossTown Electrical & Data, Inc., states, “CrossTown is an electrical contractor specializing in installation of electrical and ITS infrastructure, fiber optics, copper, wireless communications, and closed circuit television systems for the benefit of any entity or individual whether in state or out of state.”  (Heermance Decl., ¶ 1.)  That is a general practice impacting interstate commerce and is subject to federal control.  The FAA applies.  It preempts Labor Code section 229.

Public Injunctive Relief

            Plaintiff also contends his claims are not arbitrable because they seek public injunctive relief.  California courts have recognized a rule that “bars arbitration of claims for public injunctive relief.”  (Clifford v. Quest Software Inc. (2019) 38 Cal.App.5th 745, 751.)  This rule does not apply for two reasons.  First, as with Labor Code section 229, the FAA also “preempts the … restriction on arbitrability” of claims for public injunctive relief.  (Id. at p. 752.)  Second, the rule “does not bar arbitration of a UCL claim for private injunctive relief or restitution.”  (Ibid.)  Plaintiff’s complaint purports to seek “public injunctive relief” (Comp., prayer, ¶ 25), but it is not a representative action on behalf of anyone other than plaintiff.  Even if it were, an injunction that “would benefit [the employer’s] current employees … is not ‘public’ injunctive relief” that falls within this exemption.  (Clifford, at p. 754.)  It would only redress injury “ ‘to a group of individuals similarly situated to the plaintiff.’ ”  (Ibid.)

Unconscionability

            Finally, plaintiff contends the arbitration agreement is unconscionable.  “The burden of proving unconscionability rests upon the party asserting it.”  (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126 (OTO).)  This defense to enforcing an arbitration agreement requires both procedural and substantive unconscionability, using a sliding scale.  (Id. at p. 125.)   “Procedural unconscionability focuses on the elements of oppression and surprise.”  (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 177.)  “Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results.  (Ibid., internal quotes omitted.)

            Plaintiff shows no procedural unconscionability.  “A procedural unconscionability analysis ‘begins with an inquiry into whether the contract is one of adhesion.’ ”  (OTO, supra, 8 Cal.5th at p. 126.)  “An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power ‘on a take-it-or-leave-it basis.’ ”  (Ibid.)  Plaintiff does not establish this threshold requirement.  The arbitration provision is in two CBAs.  The point of collective bargaining is to put employees and employers on a more equal footing when it comes to negotiating terms of employment.  Plaintiff relies on authority about agreements between individual employees and employers.  He cites no authority finding a collectively bargained arbitration provision was procedurally unconscionable. 

Assuming plaintiff established any procedural unconscionability, it would be minimal.  “By itself …  adhesion establishes only a ‘low’ degree of procedural unconscionability.”  (Davis v. Kozak (2020) 53 Cal.App.5th 897, 907.)  Furthermore, any substantively unconscionable provision could be severed.  “The strong legislative and judicial preference is to sever the offending term and enforce the balance of the agreement” unless the agreement is “permeated by unconscionability.”  (Lange v. Monster Energy Company (2020) 46 Cal.App.5th 436, 453, internal quotes, citations, and alterations omitted.)    

Disposition 

Defendants CrossTown Electrical & Data, Inc., Justin Adkins, Eric Hudson, and Alex Zepeda’s motion to compel arbitration is granted. 

Plaintiff Eric Vasquez is ordered to arbitrate this action against defendants.  The court hereby stays the entire action pending resolution of the arbitration proceeding.  The court hereby vacates the hearings on plaintiff’s two motions to compel further discovery responses and on defendants’ motion for protective order.