Judge: Daniel S. Murphy, Case: 23STCV14119, Date: 2023-11-29 Tentative Ruling

Case Number: 23STCV14119    Hearing Date: November 29, 2023    Dept: 32

BACKGROUND

            On June 20, 2023, Plaintiff Ann Michelle Salan filed this employment discrimination action against Defendants M.S. Aerospace Inc. and A.S. Aerospace Inc.

            On August 30, 2023, Defendants filed the instant motion to compel arbitration. Plaintiff filed her opposition on November 14, 2023. Defendants filed their reply on November 20, 2023.

LEGAL STANDARD

The Federal Arbitration Act (“FAA”) states that “[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (9 U.S.C. § 2.) The term “involving commerce” is interpreted to mean simply “affecting commerce” to give the FAA the broadest reach possible, and does not require a transaction that is actually “within the flow of interstate commerce.” (See Allied-Bruce Terminix Co. v. Dobson (1995) 513 U.S. 265, 273-74; Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56.) Moreover, parties may agree to apply the FAA notwithstanding any effect on interstate commerce. (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355.)

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….” (Code Civ. Proc, § 1281.2.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

DISCUSSION

I. Prima Facie Proof of an Agreement to Arbitrate

“The moving party ‘can meet its initial burden by attaching to the motion or petition a copy of the arbitration agreement purporting to bear the opposing party's signature.’” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165, quoting Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543-44.)

On February 7, 2022, Plaintiff signed a “Binding Arbitration Agreement and Waiver of Jury Trial.” (Rivera Decl. ¶ 3(d), Ex. B.) The agreement is between Defendant M.S. Aerospace (MSA) and Plaintiff, and covers all claims that “relate in any manner whatsoever as to Employee’s employment.” (Ibid.) All of Plaintiff’s claims arise from her employment. Therefore, Defendants have satisfied their initial burden of proving an arbitration agreement. Defendant A.S. Aerospace (ASA), alleged to be Plaintiff’s joint employer (Compl. ¶ 8), may enforce the agreement as a third-party beneficiary. (See Bouton v. USAA Casualty Ins. Co. (2008) 167 Cal.App.4th 412, 424; Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614.)

II. The FAA and Labor Code Section 432.6

            Plaintiff’s opposition is limited to arguing that Labor Code section 432.6 bars enforcement of the agreement. Section 432.6 prohibits an employer from requiring an employee to arbitrate FEHA or Labor Code claims as a condition of employment. However, Section 432.6 does not “invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act.” (Lab. Code, § 432.6(f).) Section 432.6 is preempted by the FAA. (Chamber of Commerce of the United States v. Bonta (9th Cir. 2023) 62 F.4th 473.) Though, the FAA does not apply unless the party asserting preemption presents evidence establishing interstate commerce, or the parties have agreed to apply the FAA. (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238; Victrola 89, LLC, supra, 46 Cal.App.5th at p. 355.)

 Jerome Taieb, MSA’s president and ASA’s treasurer, avers that Defendants purchase raw materials and sell their products within and outside the U.S. (Taieb Decl. ¶¶ 4-5.) Plaintiff herself alleges that Defendants produce aerospace hardware used in both military and commercial aviation contexts, and have contracts with the U.S. government. (Compl. ¶ 8.) In a prior case, Hermenegildo Ahumada-Burgara v. M. S. Aerospace Inc., et al. (22STCV00517), Plaintiff averred under oath that MSA “directly engages in interstate commerce.” (August 22, 2022 Salan Decl. ISO Mtn. to Compel Arb. ¶ 6.) Plaintiff confirmed that MSA “maintains out of state vendors and purchases goods and supplies which are manufactured out of the State of California.” (Ibid.)

 Plaintiff now claims that MSA and ASA do not engage in interstate commerce because their offices are solely in California. (Salan Decl. ¶¶ 8-9.) Plaintiff avers that she worked exclusively in California, along with all other employees. (Id., ¶¶ 10-14.) Plaintiff denies making contact with anyone outside of California as part of her job. (Id., ¶ 17.) Plaintiff denies knowledge of the company purchasing or selling products out of state (id., ¶¶ 19-20), contradicting her prior declaration.  

On balance, the Court finds that Plaintiff’s employment sufficiently involved or affected interstate commerce such that the FAA applies to the arbitration agreement. While Plaintiff may have personally remained in California while working for Defendants, she provided services to companies that exchanged materials and products out of state. These companies conduct a business that impacts interstate commerce through aspects like commercial aviation. Thus, Plaintiff’s employment sufficiently “affects” interstate commerce under the broad application of the FAA, even if the particular activity is local in nature. (See, e.g., Evenskaas v. California Transit, Inc. (2022) 81 Cal.App.5th 285, 294-95.)

Because the FAA applies, it preempts Labor Code section 432.6. Plaintiff has advanced no other argument against enforcing the arbitration agreement.

CONCLUSION

            Defendants’ motion to compel arbitration is GRANTED. The case is stayed in its entirety.