Judge: Daniel S. Murphy, Case: 23STCV15075, Date: 2023-11-13 Tentative Ruling

Case Number: 23STCV15075    Hearing Date: November 13, 2023    Dept: 32

BACKGROUND

            On June 28, 2023, Plaintiff Kendall Blevens filed this action asserting (1) wrongful discharge in violation of public policy, (2) Labor Code retaliation, and (3) battery. Plaintiff alleges that he was retaliated against and ultimately terminated after reporting a manager’s inappropriate touching.

            On October 17, 2023, Defendants filed the instant motion to compel arbitration. Plaintiff filed his opposition on October 30, 2023. Defendants filed their reply on November 3, 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. Existence of a Valid Agreement

“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.)

Plaintiff signed an arbitration agreement on December 19, 2022 upon the start of his employment. (Def.’s Ex. A.) Plaintiff does not dispute the existence of the arbitration agreement, its contents, or the fact that he signed it. Nor does Plaintiff dispute Defendants’ equitable estoppel argument with regards to the defendants that are not signatories to the agreement. (See Mtn. 14:19-16:13.) Therefore, the Court finds that Plaintiff agreed to arbitrate the claims at issue and that the agreement is enforceable by all moving defendants.

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, “[n]othing in this section is intended to invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act.” (Id., subd. (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.)

            Plaintiff argues that the FAA does not apply because Defendants have not proven that Plaintiff’s employment implicated interstate commerce. “But the presence of interstate commerce is not the only manner under which the FAA may apply. As discussed above, the parties may also voluntarily elect to have the FAA govern enforcement of the Agreement, as they did here.” (Victrola 89, LLC, supra, 46 Cal.App.5th at p. 355.)

The agreement here expressly provides for enforcement under the FAA. (Def.’s Ex. A, § D(1).) Plaintiff acknowledges this provision but argues that it is a legal conclusion that provides no evidence of interstate commerce. (Opp. 2:19-3:4.) This argument is without merit. As explained in Victrola, the FAA applies if the parties agree to apply it, even without proving interstate commerce. Here, because the parties agreed to apply the FAA, Defendants need not independently prove interstate commerce.

Because the FAA applies to the agreement, it preempts Labor Code section 432.6. Plaintiff presents no other defense against enforcement of the agreement.

CONCLUSION

            Defendants’ motion to compel arbitration is GRANTED. The case is stayed in its entirety pending the outcome of arbitration.