Judge: David S. Cunningham, Case: 23STCV01490, Date: 2024-05-07 Tentative Ruling
Case Number: 23STCV01490 Hearing Date: May 7, 2024 Dept: 11
Martinez (23STCV01490)
Tentative Ruling Re: Motion to Compel Arbitration
Date: 5/7/24
Time: 10:30
am
Moving Party: American Guard Security, American
Guard Services, Inc. (collectively “ASG” or “Defendants”)
Opposing Party: Carlos Martinez (“Plaintiff”)
Department: 11
Judge: David S. Cunningham III
________________________________________________________________________
TENTATIVE RULING
Defendants’ request for judicial notice is granted.
Plaintiff’s objection 1 is overruled, objection 2 is sustained, and
objection 3 is sustained in part (“bearing Plaintiff’s April 13, 2022,
signature”).
Defendants’ motion to compel arbitration is granted as to Plaintiff’s
individual claims.
The Court severs section 9, the modification section, of the arbitration
agreement.
The Court strikes Plaintiff’s class claims.
The case is stayed as to the Plaintiff’s representative Private Attorneys
General Act (“PAGA”) claim until the arbitration is finished.
BACKGROUND
Defendants provide security services to clients. Plaintiff started working for Defendants as a
security officer in April 2022. He
claims Defendants subjected him and other current and former security officers
to numerous wage-and-hour violations.
Here, Defendants move to compel arbitration.
DISCUSSION
Existence and Assent
“[W]hen
a petition to compel arbitration is filed and accompanied by prima facie
evidence of a written agreement to arbitrate the controversy, the court itself must determine whether the agreement exists and,
if any defense to its enforcement is raised, whether it is enforceable.” (Rosenthal v. Great Western Fin.
Securities Corp. (1996) 14 Cal.4th 394, 413.)
“Under ‘both federal and state law, the threshold
question . . . is whether there is an agreement to arbitrate.’” (Cruise v. Kroger Co. (2015) 233
Cal.App.4th 390, 396, emphasis in original.)
The
burden of proof rests with the petitioner.
(See Rosenthal, supra, 14 Cal.4th at 413 [requiring the
petitioner to prove the existence of the agreement “by a preponderance of the
evidence”].) To meet the burden, “the provisions of the written
agreement and the paragraph that provides for arbitration . . . must be stated
verbatim or a copy must be physically or electronically attached to the
petition and incorporated by reference.”
(Cal. Rules of Court, rule 3.1330; see also Condee v. Longwood
Management Corp. (2001) 88 Cal.App.4th 215, 218 [same].)
“Competent
evidence is required to establish both the existence of the arbitration
agreement and any ground for denial.”
(Knight, et al., Cal. Practice Guide: Alternative Dispute Resolution
(The Rutter Group December 2023 Update) ¶ 5:321.) “The verified petition (and attached copy of
the agreement) normally proves the existence of the arbitration agreement. Affidavits or declarations may be necessary
when factual issues are tendered.”
(Ibid.)
According
to Defendants, Plaintiff e-signed their arbitration agreement on April 13,
2022.
Defendants’
agreement is attached to the declaration of Defendants’ manager of human
resources, Tamra Curtis, at exhibit A.
The agreement states:
AMERICAN GUARD SERVICES, INC. EMPLOYMENT ARBITRATION
POLICY
PLEASE READ THIS
POLICY CAREFULLY AND MAKE SURE YOU UNDERSTAND ITS TERMS.
American Guard
Services, Inc. and its subsidiaries (referred to as the “Company”) acknowledge
that disagreements may arise between an individual employee and the Company or
between employees in a context that involves the Company. The Company believes
that the resolution of such disagreements is best accomplished through
consultations with management and Human Resources, and, where that fails, by
arbitration administered by the American Arbitration Association (“AAA”).
Employees and the Company benefit from the use of private arbitration because
it usually results in quicker, less costly resolution of disagreements than
litigation in state or federal courts. For these reasons, the Company has
adopted this Employment Arbitration Policy (“Policy”), consistent with and
pursuant to the Federal Arbitration Act.
This Policy is a
binding contract between the Company and its employees. Acceptance of
employment or continuation of employment with the Company is deemed to be
acceptance of this Policy. However, this Policy is not a promise that
employment will continue for any specified period of time or end only under
certain conditions. Employment at the Company is a voluntary (at will)
relationship existing for no definite period of time and this Policy does not
change that relationship.
1. Scope of
Policy. The agreement between each individual employee and the Company to
be bound by the Policy creates a contract requiring both parties to resolve
most employment-related disputes (excluded disputes are listed below) that are
based on a legal claim through final and binding arbitration. Arbitration is
the exclusive forum for the resolution of such disputes, and the parties
mutually waive their right to a trial before a judge or jury in federal or
state court in favor of arbitration under the Policy.
Any dispute covered
by this Policy will be arbitrated on an individual basis, and the parties
mutually waive their right to participate in, or receive money from, any class,
collective, or representative proceeding. No dispute between an employee and
the Company may be consolidated or joined with a dispute between any other
employee and the Company, nor may an individual employee seek to bring his/her
dispute on behalf of other employees as a class or collective action or other
representative proceeding. The arbitrator may not consolidate more than one
individual’s claims, and may not otherwise preside over any form of a class,
collective, or representative proceeding. Any arbitration ruling by an
arbitrator consolidating the disputes of two or more employees or allowing
class or collective action arbitration would be contrary to the intent of this
Policy and would be subject to immediate judicial review.
Employees are
encouraged to bring disputes to their supervisors and to Human Resources before
initiating arbitration. If an employment-related dispute is not resolved after
approaching Human Resources and the dispute is based on a legal claim not
expressly excluded from this Policy, any party to the dispute may initiate the
arbitration process.
2. Covered
Disputes. The disputes covered under this Policy include any dispute
between an employee and the Company and any dispute between an employee and any
other person where: (1) the employee seeks to hold the Company liable on
account of the other person’s conduct, or (2) the other person is also covered
by this Policy and the dispute arises from or relates to employment, including
termination of employment, with the Company. The disputes covered under the
Policy also include any dispute the Company might have with a current or former
employee which arises or relates to employment.
A dispute is based
on a legal claim and is subject to this Policy if it is not specifically
excluded from the Policy and if it arises from or involves a claim under any
federal, state or local statute, ordinance, regulation or common law doctrine
regarding or relating to employment discrimination, terms and conditions of
employment, or termination of employment including, but not limited to, the
following: Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Age Discrimination in Employment Act, the Older Workers Benefits
Protection Act, the Americans With Disabilities Act (and the Americans with
Disabilities Amendments Act), the Equal Pay Act, the Family and Medical Leave
Act, the Worker Adjustment Retraining and Notification Act, Title II of the
Genetic Information Nondiscrimination Act of 2008, the Fair Labor Standards
Act, and all applicable amendments and regulations; state human rights and
non-discrimination laws; state and local labor code and wage and hour claims,
whistleblower or retaliation claims; breach of contract, promissory estoppel,
or any other contract claim, and defamation, employment negligence, or any
other tort claim.
The arbitrator will
be bound by the applicable law of the jurisdiction under which the dispute
arises. This Policy covers any dispute subject to arbitration which is brought
on or after the applicable effective date, as set forth in Section E of this
Policy, even if the alleged act or omission occurred prior to the applicable
effective date.
An issue is subject
to arbitration only if it states a claim under applicable federal, state, or
local law. An arbitrator (or a court of law with jurisdiction if an employee
attempts to initiate a court action of a claim otherwise covered under this
policy in court) shall dismiss, without a hearing on the merits, any matter
which does not state a claim under applicable federal, state, or local law.
3. Excluded
Disputes. This Policy does not preclude an employee from filing a claim or
charge with a governmental administrative agency, such as the National Labor
Relations Board, the Department of Labor, or the Equal Employment Opportunity
Commission, or from filing a workers’ compensation or unemployment compensation
claim in a statutorily-specified forum.
In addition, this
Policy does not preclude either an employee or the Company from seeking
emergency or temporary injunctive relief in a court of law in accordance with
applicable law. However, after the court has issued a ruling concerning the
emergency or temporary injunctive relief, the employee and the Company are
required to submit the dispute to arbitration pursuant to this Policy.
4. Arbitration
Rules and Procedures. Arbitration shall be held pursuant to the Employment
Arbitration Rules of the AAA then in effect and available at: http://www.adr.org.
5. Judicial
Proceedings and Enforcement of Awards. Either party may bring an action in
a court of competent jurisdiction to compel arbitration under this Policy, to
enforce an arbitration award, or to vacate an arbitration award.
6.
Confidentiality. Both parties agree that the Company has valuable trade
secrets and proprietary and confidential information. Both parties agree that
in the course of any arbitration proceeding all necessary steps will be taken
to protect from public disclosure such trade secrets and proprietary and
confidential information.
7. Severability.
The provisions of this Agreement are severable, and if any one or more are
determined to be void or otherwise unenforceable, the remaining provisions
shall continue to be in full force and effect. If, in any action to enforce
this Agreement, a Court of competent jurisdiction rules that the parties
agreement to arbitrate under the Employment Arbitration Rules of the American
Arbitration Association is not enforceable, then the parties agree that such
Dispute shall be resolved by final and binding arbitration under the California
Arbitration Act, California Code of Civil Procedure Section 1280, et seq.
8. Service of
Notice. Any notice necessary or proper for the initiation or continuation
of an arbitration under these procedures, for any related court action, or for
the entry of judgment on an award made under these procedures may be served on
a party by the U.S. Mail or by a commercial express delivery service, addressed
to the party or its representative at the last known address or by personal
service, in or outside the state where the arbitration is to be held.
9. Amendment or
Termination of Arbitration Policy. The Company reserves the right to amend,
modify, or terminate the Policy after providing at least 60 days notice of its
intent and the substance of any amendment, modification or termination of the
Policy. Notice may be effected by posting the notice on the Company’s intranet
website. No such amendment or termination shall affect any arbitration
procedure which has already been commenced pursuant to this Policy.
10. Effective
Date. This Policy became effective on March 1, 2015 for all persons
employed by the Company or its subsidiaries. This Policy shall become effective
on the date of hire for all other employees of the Company or its subsidiaries
employed on or after that date.
All arbitrations
shall be conducted in accordance with the Policy in effect on the date the
Company receives the Demand for Arbitration. This Policy supersedes any and all
prior versions and has been revised effective March 1, 2015.
(Curtis Decl., Ex. A, emphasis in
original.)
Facts
and terms like these normally suffice to demonstrate an agreement to arbitrate,
but Plaintiff raises an assent challenge.
He declares that he does not recall reviewing or signing the agreement. (See Martinez Decl., ¶ 4.) He also declares, on information and belief,
that Defendants copied/pasted his signature “to other documents without [his]
consent.” (Ibid.)
The
first point is unhelpful. Lack of memory
is not a defense. Nor is failure to
read. (See, e.g., Ramos v. Westlake Services LLC (2015) 242 Cal.App.4th 674, 687 [“[T]he fact
that [the plaintiff] signed a contract in a language he may not have completely
understood would not bar enforcement of the arbitration agreement. If [the plaintiff] did not speak or
understand English sufficiently to comprehend the English Contract, he should
have had it read or explained to him.”].)
This is especially true here since
Plaintiff does not claim he could not understand English.
The
second point fails for two reasons. One,
in general, party statements and declarations based on information and belief
constitute hearsay. (See, e.g., Edmon
& Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter
Group June 2023 Update) ¶¶ 8:1104 [addressing interrogatory answers and
verifications], 9:60 [addressing declarations pertaining to law and motion],
9:60.8, 10:114 [addressing declarations pertaining to summary judgment],
7:1022.1, 7:1063 [addressing declarations pertaining to anti-SLAPP motions],
8:107 [addressing declarations pertaining to protective orders].) Two, Plaintiff’s assertion concerns other
documents, not the arbitration agreement.
He does not contend the e-signature on the agreement was copied/pasted
without consent.
To
the extent Plaintiff is attempting to make an authentication argument, the
Court disagrees. “Authentication of a writing means (a) the introduction of evidence
sufficient to sustain a finding that it is the writing that the proponent of
the evidence claims it is or (b) the establishment of such facts by any other
means provided by law.” (Knight, supra,
at ¶ 5:321.1 [quoting Evidence Code section 1400].) “An
‘electronic signature is attributable to a person if it was the act of the
person’ and this may be shown in any manner.”
(Id. at ¶ 5:321.3.) “[A] party may establish that the electronic signature was ‘the
act of the person’ by presenting evidence that a unique login and password
known only to that person was required to affix the electronic signature, along
with evidence detailing the procedures the person had to follow to
electronically sign the document and the accompanying security precautions.”
(Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th
541, 545.) The supplemental declaration
of Sam Wafaa, Defendants’ compliance coordinator, tenders the required
information.[1]
Ultimately,
Defendants’ burden is satisfied. An
agreement to arbitrate appears to exist.
Federal
Arbitration Act (“FAA”)
The
Court finds that the FAA governs because the agreement expressly states that
Defendants “adopted” it “pursuant to the [FAA]” (Curtis Decl., Ex. A), and it
affects interstate commerce. (See id. at
¶ 3 [“AGS is a full-service security company with locations in 22 states across
the nation. 5 AGS places security officers at client worksites in varying
states to ensure a safe and secure 6 environment. This includes retail stores
across the nation, cruise ships, corporate board or 7 shareholder meetings,
seminars, charity fund-raisers, and employee or group functions.”].)
Enforcement
Plaintiff contends the
agreement is unconscionable. (See
Opposition, p. 3.)
Unconscionability is a
contract defense. (See Torrecillas v.
Fitness International, LLC (2020) 52 Cal.App.5th 485, 492.) Under the FAA, unconscionability can be
utilized to “invalidate [an] arbitration agreement[].” (Ibid.)
Courts apply state law to test whether the agreement is
unconscionable. (See, e.g., Lagatree
v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th
1105, 1119.)
“[U]nconscionability has
both a procedural and a substantive element, the former focusing on oppression
or surprise due to unequal bargaining power, the latter on overly harsh or
one-sided results.” (Armendariz v.
Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114,
internal quotation marks omitted.) “The
prevailing view is that [procedural and substantive unconscionability] must
both be present in order for a court to exercise its discretion to refuse to
enforce a contract or clause under the doctrine of unconscionability.” (Ibid.)
“But they need not be present in the same degree.” (Ibid.)
“Essentially a sliding scale is invoked which disregards the regularity
of the procedural process of the contract formation, that creates the terms, in
proportion to the greater harshness or unreasonableness of the substantive
terms themselves.” (Ibid.) “In other words, the more substantively
oppressive the contract term, the less evidence of procedural unconscionability
is required to come to the conclusion that the term is unenforceable, and vice
versa.” (Ibid.)
Procedural
Unconscionability
For procedural
unconscionability, Plaintiff claims the agreement is a contract of
adhesion. He asserts that no one
explained the legal significance of the agreement to him. (See Opposition, pp. 2-5.)
The
Court disagrees. “[A] predispute
arbitration agreement is not invalid merely because it is imposed as a
condition of employment.” (Lagatree
v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105,
1122–1123.) Stated differently, “the
mandatory nature of an arbitration agreement does not, by itself, render the
agreement unenforceable.” (Ibid.; see
also Knight, supra, at ¶ 5:146 [“The mere fact an adhesion contract is involved
does not per se render the arbitration clause unenforceable. Rationale: Such contracts are ‘an inevitable
fact of life for all citizens – businessman and consumer alike.’”], emphasis in
original.)
Plaintiff’s
assertion – that Defendants rushed him and did not explain the legal impact of
the agreement to him – is unpersuasive.
Plaintiff fails to declare that he requested an explanation or that he
failed to receive opportunities to read the agreement and to consult attorneys
before signing. (See Martinez Decl., ¶¶
3-5; see also Reply, pp. 4-5.) To
repeat, failure to read is not a defense.
Substantive Unconscionability
For
substantive unconscionability, Plaintiff contends the agreement:
*
gives Defendants “a unilateral right to amend, modify, or terminate” the
agreement (Opposition, pp. 6-7);
*
“requires employees to bear costs unique to arbitration” (id. at pp. 7-8,
emphasis deleted);
*
preemptively waives the right to a jury trial (see id. at p. 8);
*
includes a confidentiality clause (see id. at pp. 8-9); and
*
waives representative PAGA claims (see id. at pp. 9-10).
The
first point is correct. Section 9 is the
modification section. The plain language
is nonmutual, so the section is substantively unconscionable:
9. Amendment or Termination of Arbitration Policy. The Company reserves the right to amend,
modify, or terminate the Policy after providing at least 60 days notice of its
intent and the substance of any amendment, modification or termination of the
Policy. Notice may be effected by posting the notice on the Company’s intranet
website. No such amendment or termination shall affect any arbitration
procedure which has already been commenced pursuant to this Policy.
(Curtis
Decl., Ex. A, § 9, emphasis in original.)
Nevertheless,
the Court agrees with Defendants that section 9 can be severed. (See Reply, p. 9 n.1; see also Curtis Decl.,
Ex. A, § 7.) The Court intends to sever
it.
Plaintiff’s
second point is unavailing. The
agreement requires the arbitration to be administered by the AAA pursuant to
the AAA’s Employment Arbitration Rules.
(See id. at § 4.) Defendants
stipulate that the Rules require them to pay the arbitration costs. (See Reply, p. 6.)
The
third point is also unavailing.
Plaintiff cites two cases for the proposition that California prohibits
predispute waivers of the right to a jury trial – Grafton Partners LP v.
Superior Court (2005) 36 Cal.4th 944 (“Grafton”) and Holley-Gallegly
v. TA Operating LLC (C.D. Cal. Sept. 16, 2022, No. EDCV 22-593 JGB (SHKx))
2022 WL 9959778. (See Opposition, p.
8.) Grafton goes against
Plaintiff’s position. The opinion says
predispute arbitration agreements are enforceable notwithstanding the fact that
they waive jury trials. (See Grafton,
supra, 36 Cal.4th at 955.) Holley-Gallegly
is distinguishable. The waiver
provision there “reache[d] beyond” the limits of a normal waiver
provision. (Holley-Gallegly,
supra, 2022 WL 9959778, at * 5.) It
required the employee to waive his right to a jury trial even if the court
found the agreement unenforceable.
Plaintiff fails to identify similar language in Defendants’ agreement.
The
fourth point fails. Plaintiff cites Ting
v. AT&T (9th Cir. 2003) 319 F.3d 1126, claiming the
confidentiality section is overbroad.
(See Opposition, pp. 8-9.) The Ting
confidentiality clause “require[d] ‘[a]ny arbitration [to] remain
confidential.’” (Ting, supra, 319 F.3d at 1151.) Defendants’ confidentiality section is
narrower:
6. Confidentiality. Both parties agree that the Company has valuable trade secrets and
proprietary and confidential information. Both parties agree that in the course
of any arbitration proceeding all necessary steps will be taken to protect from
public disclosure such trade secrets and proprietary and confidential
information.
(Curtis
Decl., Ex. A, § 6, emphasis in original.)
On balance, given that it primarily relates to trade secrets and
proprietary information, it is not unconscionable. (See Hasty v. American Automobile Assn. of
Northern California, Nevada & Utah (2023) 98 Cal.App.5th
1041, 1061-1062 [instructing that “a confidentiality provision in an
arbitration agreement is not per se unconscionable when it is based on a legitimate
commercial need (such as to protect trade secrets or proprietary
information”)], emphasis in original; see also Baltazar v. Forever 21, Inc.
(2016) 62 Cal.4th 1237, 1250 [“‘“[A] contract can provide a ‘margin of safety’ that provides the party
with superior bargaining strength a type of extra protection for which it has a
legitimate commercial need without being unconscionable. [Citation.]”’
Here, the basis for the extra measure of protection is a legitimate
commercial need to protect Forever 21’s ‘valuable trade secrets and
proprietary and confidential information’ from public disclosure. Although
Baltazar may dislike the wording of the confidentiality provision, she does not
dispute that it is based on a legitimate commercial need. Moreover, nothing in
the agreement precludes employees from seeking comparable protection for their
personal information during arbitration proceedings, as circumstances may
warrant.”].)
The
Court turns to Plaintiff’s fifth point.[2] Prior to Viking River Cruises, Inc. v.
Moriana (2022) 142 S.Ct. 1906 (“Viking River”), Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 controlled. “Iskanian’s principal rule prohibits
waivers of ‘representative’ PAGA claims in the first sense.” (Viking River, supra, 142 S.Ct. at
1916, underlined case name added.) “That
is, it prevents parties from waiving representative standing to bring
PAGA claims in a judicial or arbitral forum.”
(Ibid., emphasis in original.)
“But Iskanian also adopted a secondary rule that invalidates
agreements to separately arbitrate or litigate ‘individual PAGA claims for
Labor Code violations that an employee suffered,’ on the theory that resolving
victim-specific claims in separate arbitrations does not serve the deterrent
purpose of PAGA.” (Id. at 1916-1917,
underlined case name added; see also, e.g., Knight, supra, at ¶ 5:49.4m [citing
California case law for the proposition that a “single count under PAGA could
not be ‘split into an arbitrable individual claim and a nonarbitrable
representative claim”].)
In
Viking River, the plaintiff “executed an agreement to arbitrate any
dispute arising out of her employment.”
(Viking River, supra, 142 S.Ct. at 1916.) “The agreement contained a ‘Class Action Waiver’ providing that in any
arbitral proceeding, the parties could not bring any dispute as a class,
collective, or representative PAGA action.”
(Ibid.) “It also contained a
severability clause specifying that if the waiver was found invalid, any class,
collective, representative, or PAGA action would presumptively be litigated in
court.” (Ibid.) “But under that severability clause, if any
‘portion’ of the waiver remained valid, it would be ‘enforced in arbitration.’” (Ibid.)
“After
leaving her position” with the defendant, the plaintiff “filed a PAGA action .
. . in California court.” (Ibid.) “Her complaint contained a claim that [the
defendant] had failed to provide her with her final wages within 72 hours, as
required by” Labor Code sections 101 and 102.
(Ibid.) “But the complaint also
asserted a wide array of other code violations allegedly sustained by other . .
. employees, including violations of provisions concerning the minimum wage,
overtime, meal periods, rest periods, timing of pay, and pay statements.” (Ibid.)
The defendant “moved to compel arbitration of [the plaintiff’s]
‘individual’ PAGA claim” – i.e., “the claim that arose from the violation she
suffered — and to dismiss her other PAGA claims.” (Ibid.)
“The trial court denied that motion, and the California Court of Appeal
affirmed, holding that categorical waivers of PAGA standing are contrary to
state policy and that PAGA claims cannot be split into arbitrable individual
claims and nonarbitrable ‘representative’ claims.” (Ibid.)
The
Court of Appeal’s ruling “was dictated by . . . Iskanian.” (Ibid., underlined case name added.) “Iskanian’s principal prohibition
required the lower courts to treat the representative-action waiver” in Viking
River “as invalid insofar as it was construed as a wholesale waiver of PAGA
standing.” (Id. at 1917, underlined case
name added.) “The agreement's
severability clause, however, allowed enforcement of any ‘portion’ of the
waiver that remained valid, so the agreement still would have permitted arbitration
of [the plaintiff’s] individual PAGA claim even if wholesale enforcement was
impossible.” (Ibid.) “But because” Iskanian “prohibits
division of a PAGA action into constituent claims, the state courts refused to
compel arbitration of that claim as well.”
(Ibid.)
The
United States Supreme Court granted review and reversed, holding, eight to one,
that the FAA preempts Iskanian “insofar as it precludes division of PAGA actions into individual and
non-individual claims through an agreement to arbitrate.” (Id. at 1924.) The opinion instructs:
This holding compels reversal in this
case. The agreement between [the
defendant] and [the plaintiff] purported to waive “representative” PAGA
claims. Under Iskanian, this
provision was invalid if construed as a wholesale waiver of PAGA claims. And under our holding, that
aspect of Iskanian is not preempted by the FAA, so the
agreement remains invalid insofar as it is interpreted in that manner. But the severability clause in the agreement
provides that if the waiver provision is invalid in some respect, any “portion”
of the waiver that remains valid must still be “enforced in arbitration.” Based on this clause, [the defendant] was
entitled to enforce the agreement insofar as it mandated arbitration of [the
plaintiff’s] individual PAGA claim. The
lower courts refused to do so based on the rule that PAGA actions cannot be
divided into individual and non-individual claims. Under our holding,
that rule is preempted, so [the defendant] is entitled to compel arbitration of
[the plaintiff’s] individual claim.
(Id. at 1924-1925, underlined case names added.)
The opinion continues:
The remaining question is what the lower
courts should have done with [the plaintiff’s] non-individual claims. Under our holding in this case, those claims
may not be dismissed simply because they are “representative.” Iskanian’s
rule remains valid to that extent. But
as we see it, PAGA provides no mechanism to enable a court to adjudicate
non-individual PAGA claims once an individual claim has been committed to a
separate proceeding. Under PAGA's
standing requirement, a plaintiff can maintain non-individual PAGA claims in an
action only by virtue of also maintaining an individual claim in that
action. [Citation.] When an employee's own dispute is pared away
from a PAGA action, the employee is no different from a member of the general
public, and PAGA does not allow such persons to maintain suit. [Citation.]
As a result, [the plaintiff] lacks statutory standing to continue to
maintain her non-individual claims in court, and the correct course is to
dismiss her remaining claims.
(Id. at 1925, underlined case
name added.)
Four takeaways stand out:
* Iskanian’s prohibition
against waiving representative PAGA claims stands;
* Iskanian is preempted to
the extent it bars dividing PAGA claims into individual and representative
claims;
* the defendant is allowed to
compel the plaintiff’s individual PAGA claim to arbitration; and
* once the plaintiff’s individual
PAGA claim is compelled to arbitration, he or she lacks standing to maintain
the representative PAGA claim.
The High Court’s standing ruling
is nonbinding. The California Supreme
Court reversed it in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th
1104.
Considering Iskanian, Viking
River, and Adolph, and because the FAA applies, the Court is
inclined to compel Plaintiff’s individual PAGA claim to arbitration and to stay
the case as to the representative PAGA claim.
Class Waiver
The
agreement’s class waiver is enforceable under the FAA; therefore, Plaintiff’
class claims should be stricken. (See,
e.g., Iskanian, supra, 59 Cal.4th at 359-360 [finding that
the FAA preempts “a state’s refusal to enforce [] a [class] waiver on grounds
of public policy or unconscionability”].)
[1]
The supplemental Wafaa declaration states:
2. When an employee is hired, he provides his personal
email address to AGS. AGS then sends an email to the provided personal email
address to register that email address and a corresponding password in the
system to create a unique employee account in the dashboard system. Once the
employee account is created by the new employee in the dashboard system, no one
other than the employee (with his confidential password) can access this
employee's account. Furthermore, until and unless the employee creates an account
as described above, the dashboard system does not allow anyone to access the
system and execute any documents.
3. An electronic signature in the name of "Carlos
Martinez Jr." could only have been placed on the April 13, 2022
Arbitration Agreement by a person using a unique login ID and his self-
assigned password. The date and time printed next to the electronic signature
indicated the date and time the electronic signature was made. All AGS
applicants are required to create and use their unique login ID and
self-assigned password known only to them and not communicated by an applicant
to AGS when they log into the Dashboard HR system and sign electronic forms and
agreements.
4. AGS personnel do not use the link sent to an
applicant's personal email address to create a unique password for an applicant
or to access the Dashboard to in tum gain access to onboarding documents
requiring electronic signatures. AGS does not create unique passwords to access
the Dashboard system to place applicant electronic signatures on documents. The
electronic signature on the April 13, 2022 Arbitration Agreement was made by
Martinez on April 13, 2022 at 2:27 p.m. Martinez's unique password was used to
access the Agreement at the time on the timestamp.
(Supp.
Wafaa Decl., ¶¶ 2-4.)
Defendants
submitted the supplemental Wafaa declaration in reply. If requested, Plaintiff should receive an
opportunity to respond.
[2]
Initially, Plaintiff brought his individual and representative PAGA claims in a
separate action (case number 23STCV07368), but the Court granted consolidation
on April 22, 2024, so the PAGA claims are at issue here.