Judge: Dennis J. Keough, Case: 2022-01285239, Date: 2023-05-18 Tentative Ruling
Motion to Compel Arbitration
Defendant BioTricity Inc.’s Motion to Compel Arbitration and Stay Proceedings is GRANTED.
“The burden of persuasion is always on the moving party to prove the existence of an arbitration agreement with the opposing party by a preponderance of the evidence…. If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement…. If the opposing party meets its burden of producing evidence, then in the third step, the moving party must establish with admissible evidence a valid arbitration agreement between the parties. The burden of proving the agreement by a preponderance of the evidence remains with the moving party.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.158, 165-166.)
Here, TriNet HR III, Inc. (“TriNet”) provides BioTricity with general administrative support, including onboarding, payroll processing, and providing access to certain personnel information, documents, and notices for Biotricity’s worksite employees. (Bickerton Decl. ¶¶ 3, 6.) TriNet also provides and maintains a password protected online portal that houses employment policies, records, and forms, including its Terms and Conditions Agreement (the “TCA”), which contains a section entitled “Dispute Resolution Protocol” (the “DRP”). (Bickerton Decl. ¶¶ 4-8.) On January 10, 2022, Plaintiff electronically signed the TCA/DRP. (Bickerton Decl. ¶¶ 8-17, Exs. A-C.) The DRP to which Plaintiff agreed provides the following agreement to arbitrate disputes arising out of Plaintiff’s employment:
…[T]his DRP covers any dispute arising out of or relating to your co-employment with TriNet, including your TriNet co-employer, and/or arising out of or relating to your employment with your company, as well as any dispute with an employee, officer, or director of TriNet or of a TriNet customer (all of whom, in addition to TriNet customers, are intended to be beneficiaries of this DRP) (“covered dispute”)…The Federal Arbitration Act (“FAA”) applies to this DRP…This DRP will survive termination of the employment relationship. With only the exceptions described below, arbitration will be used instead of going before a court (for a judge or jury trial), and even in the situations described below, NO JURY TRIAL WILL BE PERMITTED (unless applicable law does not allow enforcement of a pre-dispute jury trial waiver in the particular circumstances presented).
(Bickerton Decl., ¶5, Ex. A.)
Plaintiff does not dispute that the FAA applies to the DRP. He also does not dispute that he signed the TCA which includes the DRP, nor does he argue that it does not comply with the requirements for enforceability as set forth by the California Supreme Court in Armendariz v. Foundation Health (2000) 24 Cal.4th 83. Rather, he argues that the Agreement does not apply to Biotricity because it is not a party to the DRP and that the DRP is unenforceable because it is fraudulent, illusory and illegal. The Court disagrees.
Section 1 of the TCA states as follows:
Your relationship with TriNet is beginning because the company you work for (“your worksite employer,” “your company” or “my company”) is a TriNet customer. This means that your company has entered into an agreement with a TriNet PEO company to share certain employer responsibilities as co-employers. This also means that a TriNet PEO company (the company whose name appears on your wage statements, “your TriNet co-employer”) will be your employer of record for certain administrative purposes, which may include processing payroll (based on information provided by your worksite employer), sponsoring and administering employee benefits as applicable, and providing certain other human resources services. Your worksite employer will retain the responsibilities of directing your day-to-day work and managing its business affairs. Your worksite employer, not TriNet, has sole responsibility for controlling and providing information about your wages, working hours, and working conditions. You acknowledge and agree that your worksite employer and TriNet are authorized to share information with each other about you and your dependents to provide human resources services.
(Bickerton Decl., ¶5, Ex. A.)
Although the TCA does not mention Biotricity by name, the TCA clearly states that it applies to “your worksite employer, your company or my company.” Plaintiff does not dispute that he executed the TCA and DRP as part of the onboarding process for his employment with Biotricity. And Plaintiff alleges in his Complaint that he “was an employee of Defendants BIOTRICITY INC.” (Complaint ¶ 1.) Thus, there is no other “employer” or “company” that the TCA could apply to.
Also, the fact that Biotricity is not a signatory to the TCA does not render it unenforceable by the company. Under California law, a nonsignatory may enforce a contract if it is an intended third-party beneficiary. (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1021- 1022.) “The test for determining whether a contract was made for the benefit of a third person is whether an intent to benefit a third person appears from the terms of the contract.” (Id. at 1022 (citation omitted).) Here, it is apparent on the face of the TCA and DRP that it was intended to benefit Biotricity.
Therefore, the Court finds the DRP to apply to Biotricity.
The Court also finds that the DRP is not fraudulent, illegal, or illusory. Section 1 of the DRP sets forth the co-employment relationship between TriNet and Biotricity. Plaintiff has cited no authority that would support a finding that such a relationship is improper or illegal.
TriNet’s promise to provide the services set forth in the TCA and to be bound by the DRP, and to act as Plaintiff’s co-employer, all conditions to which Plaintiff was not previously lawfully entitled to, are adequate consideration. (See Civ. Code § 1605)
Further, although Plaintiff asserts the DRP is illusory because Biotricity can avoid the arbitration agreement by opting out whenever it wants, Section 9 contains no such provisions. The language in Section 9(b) that, “[i]f at the time of a covered dispute there is an agreement between you and your company expressly prohibiting arbitration of covered disputes, then that agreement will be controlling as between you and your company,” cannot be said to grant Biotricity the right to unilaterally avoid the DRP whenever it chooses.
Finally, the DRP is not barred by Labor Code § 432.6. The Ninth Circuit recently held that that the FAA preempts this statute and its prohibitions against arbitration. (See Chambers of Commerce of the United States v. Bonta (2023) 62 F.4th 473.)
For the foregoing reasons, Biotricity has met its burden of establishing a valid arbitration agreement between the parties. Accordingly, the Motion to Compel Arbitration is GRANTED.
It is FURTHER ORDERED that, pursuant to Code of Civil Procedure section 1281.4, the action is stayed pending completion of arbitration.
Moving party to give notice.