Judge: Carolyn M. Caietti, Case: 37-2022-00001666-CU-OE-CTL, Date: 2023-12-01 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - November 30, 2023

12/01/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Other employment Motion Hearing (Civil) 37-2022-00001666-CU-OE-CTL GARDNER VS SONESTA INTERNATIONAL HOTELS CORPORATION [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant Sonesta International Hotels Corporation's Motion to Compel Arbitration is GRANTED.

Preliminary Matters Defendant cites to a request for judicial notice, but none is reflected in the file.

Discussion Plaintiff's Complaint asserts one cause of action for violation of the Private Attorneys General Act.

Existence and Scope of the Arbitration Agreement The parties do not dispute the Federal Arbitration Act applies. (ROA 59 – Declaration of Jennifer Rausch, at Ex. A, § III(F) ['The Parties acknowledge and agree that the Company is involved in transactions involving interstate commerce and that the Federal Arbitration Act shall govern any arbitration pursuant to this Agreement, including but not limited to the Agreement's scope, interpretation and application.'].) Based on the evidence provided, including a copy of the parties' arbitration agreement, Defendant proved the existence of an arbitration agreement. (C.C.P., § 1281.2; Rausch Decl., at Ex. A.) The dispute is also covered by the arbitration agreement. (Ex. A, at § (I).) The arbitration agreement states, 'claims' means 'any and all disputes, claims or controversies arising out of your employment or the termination of your employment...' (Ibid.) This PAGA dispute arises out of Plaintiff's employment.

Plaintiff argues the PAGA claim is excluded because the arbitration agreement states: 'Claims subject to this Agreement shall not include: (i) ... (iv) claims filed with a federal, state, or local administrative agency (e.g., the NLRB, EEOC, etc.) or reporting of criminal activity to appropriate public authorities; ...' (Ex. A., at § I.) While a plaintiff must outline their accusations to the LWDA as a prerequisite of filing suit, a plaintiff does not seek relief from the LWDA or file a claim with the LWDA. (Lab. Code, § 2699(a)(1); Kim v. Rein International California, Inc. (2020) 9 Cal.5th 73, 81 ['An employee seeking PAGA penalties must notify the employer and the Labor and Workforce Development Agency (LWDA) of the specific labor violations alleged....'].) Only notice is required. Thus, under the plain language of the agreement, the PAGA claim is not excluded and is subject to the agreement to arbitrate.

Viking River Calendar No.: Event ID:  TENTATIVE RULINGS

3019526  37 CASE NUMBER: CASE TITLE:  GARDNER VS SONESTA INTERNATIONAL HOTELS  37-2022-00001666-CU-OE-CTL Plaintiff does not oppose Defendant's application of Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __, 142 S.Ct. 1906 (Viking River). Under Viking River, Plaintiff must arbitrate her individual PAGA claim, which arises from alleged Labor Code violations during her employment with Defendant.

Defendant acknowledges the arbitration agreement contains an invalid and unenforceable PAGA waiver.

(Ex. A, at § III(A) [the parties 'agree to waive all rights to bring, or be a party to, any class or collective claims against one another and agree to pursue claims on an individual basis only.'].) However, it is severable due to the severability clause in the agreement. (Viking River Cruises, Inc., at p. 1925 ['Based on [the severability] clause, Viking was entitled to enforce the agreement insofar as it mandated arbitration of Moriana's individual PAGA claim.']; Ex. A, at § III(C) ['In the event that any provision of this Agreement shall be construed to be unlawful or unenforceable, and if the offending provision can be deleted without affecting the primary intention of the parties or can be reformed to effect the primary intention of the parties as expressed herein, then the offending provision shall be so deleted or reformed and the remainder of this Agreement shall remain in full force and effect as written.'].) Plaintiff's 'non-individual' PAGA claim remains in court. Although Viking River indicated the 'correct course' is to dismiss the remaining non-individual PAGA claims due to a lack of standing, both concurrences acknowledged this to be a question of state law. (See, Viking River, supra, 142 S.Ct. at p. 1925-26 (conc. opn. of Sotomayor, J.); id., at p. 1926 (conc. opn. in part of Barrett, J., Kavanaugh, J., Roberts, C.J.).) Since then, the California Supreme Court decided Adolph v. Uber Technologies, Inc., holding '[w]here a plaintiff has brought a PAGA action comprising individual and non-individual claims, an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA.' (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1114.) The Court further concluded, 'a plaintiff who files a PAGA action with individual and non-individual claims does not lose standing to litigate the non-individual claims in court simply because the individual claims have been ordered to arbitration.' (Adolph, supra, at p. 1104; see also, Nickson v. Shemran, Inc. (2023) 90 Cal.App.5th 121, 134-35 (concluding the employee had standing to litigate nonindividual PAGA claims in the superior court notwithstanding his agreement to arbitrate individual PAGA claims) and Barrera v. Apple American Group, LLC (2023) 95 Cal.App.5th 63, 90 (same).) Thus, the Court can stay the non-individual PAGA claim pending the outcome of the arbitration pursuant to C.C.P. section 1281.4. (Adolph, supra, 14 Cal.5th at p. 1123-24 (approving this manner of proceeding).) Unconscionability The burden then falls on Plaintiff to prove a ground for denial. Plaintiff argues the agreement is unenforceable because it is unconscionable. Under the FAA, generally applicable contract defenses (such as unconscionability) may invalidate an arbitration agreement if it does not interfere with fundamental attributes of arbitration. (Nickson, supra, 90 Cal.App.5th at p. 130.) Here, however, the agreement contains a delegation clause, providing, 'All challenges to the interpretation or enforceability of any provision of this Agreement shall be brought before the arbitrator, and the arbitrator shall rule on all questions regarding the interpretation and enforceability of this Agreement.' (Ex. A, at § III(C).) Plaintiff's argument the delegation clause itself is unconscionable is not persuasive. (See, Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1561-65; Tiri v. Lucky Changes, Inc. (2014) 226 Cal.App.4th 231, 241-50.) Both procedural and substantive unconscionability are required. (OTO, L.L.C.

v. Kho (2019) 8 Cal.5th 111, 125-26.) The delegation clause has some measure of procedural unconscionability because it was presented on a take it or leave it basis and given as a condition of employment. (See, Armendariz v. Foundation Health Psychcare Service, Inc. (2000) 24 Cal.4th 83, 113.) However, it is valid because there is no substantive unconscionability. It is not overly harsh and does not lack mutuality. Defendant is bound by it too. Pinnacle Museum Tower Assn. v. Pinnacle Market Calendar No.: Event ID:  TENTATIVE RULINGS

3019526  37 CASE NUMBER: CASE TITLE:  GARDNER VS SONESTA INTERNATIONAL HOTELS  37-2022-00001666-CU-OE-CTL Development (US), LLC (2012) 55 Cal.4th 223, 246.) Plaintiff raises Defendant's ability to change the arbitration firm. But Plaintiff offers no legal authority that this makes the clause substantively unconscionable. Further, the ability to change arbitration firm does not apply to 'pending' claims and comes with conditions including notice. There is also no evidence of any change of firms. As a whole, it does not 'shock the conscious.' (Pinnacle Museum Tower Assn., supra.) Plaintiff's challenge to the entire agreement also lacks merit. As the Court of Appeal for the Fourth District, Division One in Nickson concluded, when: (i) a delegation clause is contained in an arbitration agreement; (ii) the employee challenges the enforceability of the agreement as a whole, not the delegation clause in particular; and (iii) the delegation is clear and unmistakable, then it is for the arbitrator, not a court, to determine whether the agreement is unconscionable. (Id., at p. 130-33 (reversing ruling denying an employer's motion to compel arbitration and concluding it was for the arbitrator, not the court, to determine whether the agreement was unconscionable).) Here, the delegation to the arbitrator is clear and unmistakable. It plainly provides all challenges to the agreement's enforceability shall be brought before the arbitrator and that all questions regarding enforceability be determined by the arbitrator. (Ex. A, at § III(C).) Plaintiff unpersuasively argues it is not clear and unmistakable by referencing section II(B)(i) but this provision does not speak to delegation.

Thus, the delegation clause itself is not unconscionable and the delegation clause requires the arbitrator to determine whether the agreement is unconscionable.

Concluding Orders For these reasons, the motion to compel arbitration is GRANTED.

Plaintiff is ordered to arbitrate her individual PAGA claim. The Court delegates enforceability, including whether the agreement is unconscionable, to the arbitrator.

Plaintiff's non-individual PAGA claim remains before this Court and is stayed pending the outcome of Plaintiff's individual PAGA claim.

The Status Conference set for December 1, 2024, is continued to June 7, 2024, at 9:15 a.m. in Department 70.

If the tentative ruling is confirmed without modification, the minute order will be the Court's final order.

Defendant is ordered to serve written notice of the Court's final order on all appearing parties by December 5, 2023.

Calendar No.: Event ID:  TENTATIVE RULINGS

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