Judge David S. Cunningham, Case Number: 23STCV22733, Date: 2024-02-29 Tentative Ruling

Judge: David S. Cunningham, Case: 23STCV22733, Date: 2024-02-29 Tentative Ruling

Defendant’s objections to the declarations of Plaintiff, Alberto Frias, Edgar Pina, and Gilberto Flores are sustained.

Plaintiff is a former employee. He alleges that BHA subjected him and other current and former employees to numerous wage-and-hour violations.

In support of his opposition, Plaintiff submitted his own declaration and three declarations from putative class members. All four declarations are written in Spanish and include English versions, which were translated by an alleged translator named Karen Arellano.

Defendant objects to the declarations, asserting that Plaintiff fails to establish that Arellano is certified. (See Reply, pp. 2-3 [claiming Arellano is “a legal assistant at Plaintiff’s counsel’s law firm”].)

The Court agrees. Rule of Court 3.1110(g) requires “[e]xhibits written in a foreign language [to] be accompanied by an English translation, certified under oath by a qualified interpreter.” (Cal. Rules of Court, rule 3.1110, subd. (g).) Arellano declares:

I, Karen Arellano, translated the above declaration[s] from the original English to Spanish, on February 14, 2024. I am proficient in English and Spanish. I have been speaking, reading, and writing English since 2000; and I have been speaking, reading, and writing Spanish since 2000. I hereby certify that the translation is true and accurate.

(Plaintiff Decl., p. 5; see also Frias Decl., p. 3 [same]; Pina Decl., p. 3 [same]; Flores Decl., p. 3 [same].) The statement does not demonstrate that Arellano is certified/registered in California or that she ever received education or training in translating Spanish, so the declarations are inadmissible.

“[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 Financial Securities Corp. (1996) 14 Cal.4^th 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.4^th 390, 396, emphasis in original.)

The burden of proof rests with the petitioner. (See Rosenthal, supra, 14 Cal.4^th 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.4^th 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.)

Defendant’s arbitration agreement is attached to the declaration of Heather Salazar, Defendant’s human resources manager, at Exhibit A. The agreement states:

I hereby agree that any claims, disputes or controversies arising between (a) me and (b) BHA Hospitality, LLC (d/b/a “Avra Beverly Hills”) [“the Company”], its current or former officers, directors, members, employees, vendors, clients, customers, agents, parents, subsidiaries, affiliated companies, successors, or assigns, which could give rise to a legal claim relating to my employment with the Company or the termination thereof, including the interpretation or application of this Dispute Resolution Procedure and Mutual Binding Arbitration Agreement [“Agreement”], shall be addressed in the following manner:

Second, at the Company’s option, through mediation administered by a mediator approved by me and the Company and paid for by the Company.

And third, if still not resolved in steps one or two above by binding arbitration under the Federal Arbitration Act administered by JAMS pursuant to its Employment Arbitration Rules then in effect, and subject to JAMS Policy on Employment Arbitration Minimum Standards of Procedural Fairness. Both the Company and I shall be entitled to adequate discovery prior to the arbitration as determined by the arbitrator, who shall be selected in accordance with the JAMS rules. Both the Company and I shall have the right to be represented by counsel of our choice, and I will be responsible for retaining my own attorney. I understand that copies of the JAMS rules and policy are available to me at http://www jamsadr.com and that a hard copy is either attached to this Agreement or will be provided to me upon request at any time. If for any reason JAMS is not available, the arbitration shall be administered by ARC (Alternative Resolution Centers) pursuant to the rules of AAA (American Arbitration Association) then in effect for employment disputes.

I understand and agree that the procedures outlined in this Agreement will be the exclusive means of redress for any disputes relating to or arising from my employment with the Company, whether such disputes are initiated by me or the Company, including disputes over rights provided by federal, state, or local statutes, regulations, ordinances, and common law. The types of disputes covered by this agreement that may apply to claims that I could bring include, but are not limited to, claims involving laws prohibiting discrimination and unlawful harassment based on any protected classification, such as Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the California Fair Employment & Housing Act, and the California Labor Code. However, claims prohibited by law to be arbitrated shall not be subject to this Agreement, including but not limited to claims under California workers’ compensation laws.

I understand and agree that the arbitration will take place in the county where I last worked for the Company, unless another location is mutually agreed upon by me and the Company.

I acknowledge that an arbitration does not involve a jury. and that I will not be entitled to a trial in court with a jury. I agree that the arbitrator’s award will be final and binding on both parties. I understand that each party must pay its own attorneys’ fees in connection with the arbitration, and that the arbitrator may not award attorneys’ fees unless the claims involve a contract or statute that allows for attorneys’ fees to the prevailing party.

Each party will have the right to request that the arbitrator issue a written decision that memorializes the essential findings of fact and law and the conclusions upon which the arbitrator’s decision and the award, if any, are based. The Company will pay the fees for the arbitrator and the use of the arbitration forum, except that I will contribute towards the fees in an amount consistent with the amount I would have spent to file a complaint in court.

I understand that any dispute arising out of this Agreement will be determined by the arbitrator. I further understand that the Federal Arbitration Act shall apply when interpreting this Agreement.

If any parts of this Agreement are found to be invalid, illegal or unenforceable, the validity, legality and/or enforceability of the remaining provisions will not be affected or impaired by that determination. If any terms or sections of this Agreement are determined to be unenforceable, they shall be modified so that the unenforceable term or section is enforceable to the greatest extent possible.

The Company and I expressly intend and agree as follows: (1) that class action, collective action, and representative actions or procedures shall not be asserted, nor will they apply, in any arbitration pursuant to this Agreement; (2) that neither the Company nor I will assert, participate in, or join class action, collective action, or representative action claims against the other in arbitration or otherwise; and (3) that the Company and I shall only submit our own, individual claims in arbitration and will not seek to represent the interests of any other person. To the extent that any representative action claims under the California Private Attorney General Act are deemed to be excluded from this provision, the Company and I expressly agree that such claims will be stayed (i.e., put on hold) for the duration of any other related existing claim.

I further understand that nothing in this Agreement precludes or prevents me from filing an administrative complaint with the National Labor Relations Board (NLRB) alleging any violation of the National Labor Relations Act, filing claims for workers’ compensation or unemployment benefits; filing charges with the Equal Employment Opportunity Commission (EEOC) or a similar government agency; filing claims under employee pension, welfare benefit or stock option plans if those plans provide a dispute resolution process; submitting a whistleblower complaint to a government agency, or filing claims that are not subject to arbitration or pre-dispute arbitration agreements pursuant to federal law.

In accordance with this Agreement, and to facilitate good faith negotiations to resolve it promptly, I agree to give written notice to Alissa Conte, Director of Operations at 233 N Beverly Dr., Beverly Hills, CA 90210 [insert a method of contact], stating the nature of my claim in sufficient detail to advise the Company of the nature of the dispute, including the timeframe of the issues involved, the names of anyone at the company with knowledge of the dispute, and my requested relief. The Company agrees to do the same if it initiates any claim against me. The Company will provide such notice to me in writing at my last known address recorded in my personnel records. I understand that this information will be used to investigate the claim, so that the Company and I can engage in good faith negotiations to resolve it promptly in accordance with the three steps outlined above.

The written notice discussed in the paragraph above will trigger the dispute resolution process and must be made within the time period required under the applicable statute of limitations. Once the dispute resolution process has been properly triggered, any negotiation or mediation that takes place pursuant to steps one or two of the dispute resolution process will not count against any applicable statute of limitations period.

If you prefer this arbitration agreement translated into Spanish, please contact the HR Department.

Si prefiere este acuerdo de arbitraje traducido al espafiol, por favor contacte el Departamento de Recursos Humanos.

The signature of the parties below indicates their agreement to be bound by this DISPUTE RESOLUTION PROCEDURE & MUTUAL BINDING ARBITRATION AGREEMENT.

It is undisputed that Plaintiff signed the agreement. (See Plaintiff Decl., ¶ 7.)

However, Plaintiff contends the agreement is void due to fraud in the execution. Plaintiff asserts that he speaks Spanish, he does not “speak or understand much English[,]” and Defendant made misrepresentations about the agreement (Plaintiff claims Defendant’s representative made him believe he was signing tax documents). (Id. at ¶ 2; see also id. at ¶¶ 6-7; Opposition, pp. 9-11.)

* Lack of understanding of English is not a defense. (See, e.g., Ramos v. Westlake Services LLC (2015) 242 Cal.App.4^th 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.”].)

* Plaintiff’s declaration is inadmissible and questionable. To reiterate, Plaintiff claims he is “[un]able to speak or understand much English” other than “restaurant terminology,” yet he declares that (1) Defendant’s representative told him that the onboarding documents “regard[] the dependents[,]” and (2) he understood the “dependents” comment to mean that “the documents were all tax forms[.]” (Plaintiff Decl., ¶ 6.) If he only understood restaurant terms at that time, it probably strains credulity to claim he heard “dependents” – a non-restaurant term – and thought of tax documents.

* Near the signature line, the arbitration agreement emphasizes: “If you prefer this arbitration agreement translated into Spanish, please contact the HR Department. Si prefiere este acuerdo de arbitraje traducido al espafiol, por favor contacte el Departamento de Recursos Humanos.” (Salazar Decl., Ex. A, p. 3, emphasis in original.) The Court’s understanding is that the English sentence and Spanish sentence say the same thing.[1]

* There is no evidence demonstrating that Plaintiff ever requested a Spanish version. In fact, even if his declaration were admissible, Plaintiff admits that he did not read the agreement, did not “ask questions about it, nor ask for more time to review it[.]” (Plaintiff Decl., ¶ 7.)

* Plaintiff’s reliance on Castillo v. CleanNet USA, Inc. (N.D. Cal. 2018) 358 F.Supp.3d 912 is unpersuasive. The plaintiff there did ask for a Spanish version but “was told that none existed.” (Castillo, supra, 358 F.Supp.3d at 929.) A Spanish-speaking representative also translated the English contract to the plaintiff without telling him about the arbitration provision. (See id. at 933.) Those facts are not present here.

* The declarations from putative class members are inadmissible and do not address the circumstances of Plaintiff’s personal onboarding process. (See Reply, pp. 2-3; see also Frias Decl., ¶¶ 1-10; Pina Decl., ¶¶ 1-10; Flores Decl., ¶¶ 1-8.)

Plaintiff contends the FAA is inapplicable. Specifically, Plaintiff contends Defendant fails to show that the employment relationship involved interstate commerce. (See Opposition, pp. 4-5.)

“[T]he presence of interstate commerce is not the only manner under which the FAA may apply. . . . [T]he parties may also voluntarily elect to have the FAA govern enforcement of the [a]greement, as they did here.” (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355.) Defendant’s agreement expressly states that the FAA applies. (See Saldivar Decl., Ex. A, pp. 1, 2.)

Also, Defendant’s showing is adequate. Paragraph 11 of the Salazar declaration provides:

11. BHA markets its fine dining experience nationwide and regularly hosts out-of-state patrons and international tourists. BHA purchases products from around the United States and from international vendors due to its need to obtain the highest quality products. Much of its produce and other supplies travel interstate by land, air, and sea to reach its restaurant in Beverly Hills, California.

(Salazar Decl., ¶ 11.) The statement shows a sufficient link to interstate commerce.

Plaintiff claims the arbitration agreement is unconscionable. (See Opposition, pp. 11-13.)

“[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.)

Plaintiff contends the agreement is procedurally unconscionable because (1) Defendant did not provide him with Spanish versions of the agreement and JAMS rules, and (2) the agreement fails to identify the method of contact for Plaintiff to initiate dispute resolution. (See Opposition, pp. 11-12.)

Point (1) is unavailing. The agreement gives Plaintiff the option of requesting a Spanish version of the agreement and a hard copy of the JAMS rules. (See Salazar Decl., Ex. A, pp. 1, 3.) There is no evidence that he asked for either.[2] Notably, the agreement identifies the website where the JAMS rules can be accessed, and they are available in Spanish. (See id. at Ex. A, p. 1; see also https://www.jamsadr.com/rules-download/; https://www.jamsadr.com/files/uploads/documents/ jams-spanish-employment-rules.pdf.)

Point (2) also fails. The agreement provides the mailing address of Defendant’s director of operations and states that Plaintiff should give written notice to her to initiate dispute resolution. (See Salazar Decl., Ex. A, p. 2.)

As to substantive unconscionability, Plaintiff contends the agreement (1) waives class and representative claims and (2) mandates negotiation and mediation as prerequisites to seeking arbitration. (See Opposition, pp. 6-8, 13-14.)

Since the FAA applies, Plaintiff’s reliance on Gentry v. Superior Court (2007) 42 Cal.4^th 443 is unavailing. The arbitration agreement states:

(Salazar Decl., Ex. A, p. 2.) The class waiver is enforceable under the FAA; therefore, the class claims should be stricken. (See, e.g., Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4^th 348, 359-360 [finding that the FAA preempts “a state’s refusal to enforce [] a [class] waiver on grounds of public policy or unconscionability”].)

Prior to Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 (“Viking River”), the applicable law was Iskanian. “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.

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.

* 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 a case called Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5^th 1104.

In light of Iskanian, Viking River, and Adolph, and because the FAA applies, the Court finds that Plaintiff’s individual PAGA claim should be arbitrated and that the representative PAGA claim should be stayed until the parties finish arbitration.

Defendant is waiving the negotiation and mediation prerequisites, and, regardless, the potential threat of an unfair advantage appears minimal. Presumably, both sides would have an opportunity to learn the opponent’s arguments and evidence during negotiation and mediation. (See Reply, p. 10.)

Nevertheless, as a matter of caution, the Court will sever the negotiation and mediation prerequisites. The Court finds that severing these prerequisites suffices to cure the alleged defect.

Defendant’s stay request is granted. The Court compels Plaintiff’s individual claims to arbitration, and the remainder of the case is stayed until the arbitration is complete.

[1] In case Plaintiff’s counsel attempts to argue at the hearing that the English and Spanish sentences do not say the same thing, the Court intends to have a Los Angeles Superior Court translator on call to translate the Spanish sentence.

[2] Again, Plaintiff’s declaration is inadmissible, and, anyway, he does not declare that he exercised his right to request Spanish versions.