Judge: Daniel S. Murphy, Case: 24STCV05379, Date: 2024-05-24 Tentative Ruling

Case Number: 24STCV05379    Hearing Date: May 24, 2024    Dept: 32

BACKGROUND

            On March 4, 2024, Plaintiff Guillermo Reyes filed this action for wage and labor violations against Defendant Mega International, LLC. Plaintiff asserts seven causes of action individually, and an eighth cause of action which is a representative PAGA claim.

            On April 25, 2024, Defendant filed the instant motion to compel arbitration. Plaintiff filed his opposition on May 13, 2024. Defendant filed its reply on May 17, 2024.

LEGAL STANDARD

“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 Arbitration 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.)

            On January 15, 2023, Plaintiff signed a standalone arbitration agreement as part of the onboarding process. (Speights Decl. ¶ 4, Ex. A.) Plaintiff does not dispute the existence of the agreement or deny his signature. Plaintiff also does not contest that the claims asserted in his complaint (except the PAGA representative claim) are subject to arbitration. Therefore, Defendant has proven an arbitration agreement by a preponderance of the evidence, and all claims except the PAGA representative claim must be submitted to arbitration.   

II. Stay

Plaintiff’s opposition is limited to the issue of staying the action on the representative PAGA claim pending arbitration. “[T]he trial court may exercise its discretion to stay the non-individual claims pending the outcome of the arbitration.” (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1123.) Such a stay is warranted because an arbitrator’s findings may have preclusive effect on the litigation of the representative claims, particularly on the issue of Plaintiff’s standing as an “aggrieved employee.” (See id. at p. 1124; see also Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65, 77-78.) “Because the issues subject to litigation under the PAGA might overlap those that are subject to arbitration of [Plaintiff’s] individual claims, the trial court must order an appropriate stay of trial court proceedings.” (Franco v. Arakelian Enterprises, Inc. (2015) 234 Cal.App.4th 947, 966.) “The stay's purpose is to preserve the status quo until the arbitration is resolved, preventing any continuing trial court proceedings from disrupting and rendering ineffective the arbitrator's jurisdiction to decide the issues that are subject to arbitration.” (Ibid.)

Here, a stay is justified to prevent duplicative litigation and inconsistent findings. Because the individual and representative claims arise from similar alleged violations, there will be numerous overlapping issues of law and fact, including Plaintiff’s standing as an “aggrieved employee.” The findings in arbitration may have a dispositive effect on Plaintiff’s representative PAGA claims. Although the representative claims cannot be dismissed outright simply because the individual claims are compelled to arbitration, the representative claims should still be stayed to preserve judicial economy and prevent inconsistent findings.

Plaintiff argues that the representative PAGA claims are not subject to arbitration. This is correct, but has no bearing on whether a stay is warranted. Claims that are not covered by an arbitration agreement, and must thus remain in court, are still subject to the court’s discretion to control its own docket, as well as Code of Civil Procedure section 1281.4.

CONCLUSION

            Defendant’s motion to compel arbitration is GRANTED. The representative PAGA claims are stayed pending arbitration.