Judge Elaine Lu, Case Number: 24STCV17688, Date: 2025-05-13 Tentative Ruling

This is a putative wage-and-hour class and representative action. Plaintiff Yesenia Urizar (“Plaintiff”) alleges that she and the putative class members are and were employed by Defendants Partners Personnel Management Services, LLC (“Partners”) and We Pack it All, LLC (jointly “Defendants”) and that Defendants violated the Labor Code, Industrial Welfare Commission wage orders, and the Business and Professions Code.

On July 16, 2024, Plaintiff filed the instant class action complaint under Los Angeles Superior Court Case No. 24STCV17688 (“Class Action”). In the Class Action complaint, Plaintiff asserts eight causes of action for (1) failure to pay minimum wages, (2) failure to pay overtime wages, (3) failure to authorize or permit meal periods, (4) failure to authorize or permit rest periods, (5) failure to indemnify employees for employment-related losses/expenditures, (6) failure to provide complete and accurate wage statements, (7) failure to pay all earned wages and final paycheck due at time of separation of employment, and (8) violation of California’s unfair competition law.

On September 20, 2024, Plaintiff filed a representative claim under the Private Attorneys General Act (“PAGA”) under Los Angeles Superior Court Case No. 24STCV24443 (“PAGA Action”). In the PAGA Action complaint, Plaintiff asserts a single claim against both Defendants for civil penalties under PAGA.

On January 8, 2025, Defendant Partners filed the moving papers for the instant motion to compel arbitration in the Class Action. On January 8, 2025, Defendant We Pack It All, LLC filed a joinder in the Class Action to Defendant Partners’ motion to compel arbitration.

On January 31, 2025, the Court found that the Class Action and PAGA Action were related. (Minute Order 1/31/25.) Pursuant to the parties’ stipulation, on February 19, 2025, the Class Action and PAGA Action were consolidated for all purposes.

On March 3, 2025, Defendant Partners filed a supplemental memorandum of points and authorities in support of the instant motion to compel arbitration regarding the arbitration agreement’s applicability to Plaintiff’s PAGA claim. On March 12, 2025, Plaintiff filed a consolidated opposition objecting in part to Defendant Partner’s failure to include a certified translation of the arbitration contract with the moving papers. On March 18, 2025, Defendant Partners filed a consolidated reply.

At the hearing on April 1, 2025, the Court continued the hearing to provide Plaintiff with an opportunity to respond to Defendants’ reply evidence. (Minute Order 4/1/25.) On April 18, 2025, Plaintiff filed a supplemental opposition. On May 2, 2025, Defendant Partners filed a supplemental reply.

In conjunction with the moving papers, Defendant Partners requests that the Court take judicial notice of the following:

1. Memorandum of Points and Authorities in Support of Petition for Order Compelling Arbitration of Plaintiff’s Individual Claims, filed December 20, 2023, in the matter of Oscar Martinez v. Potential Industries, Inc.; Partners Personnel – Management Services, LLC, Los Angeles County Superior Court, case number 23STCV14968.

2. Declaration of Michelle Saldana in Support of Defendant Partners Personnel – Management Service, LLC’s Motion for Order to Compel Arbitration of Plaintiff’s Individual Claims, filed December 20, 2023, in the matter of Oscar Martinez v. Potential Industries, Inc.; Partners Personnel – Management Services, LLC, Los Angeles County Superior Court, case number 23STCV14968

3. Declaration of Jennifer Rivas in Support of Defendant Partners Personnel – Management Service, LLC’s Motion for Order to Compel Arbitration of Plaintiff’s Individual Claims, filed December 20, 2023, in the matter of Oscar Martinez v. Potential Industries, Inc.; Partners Personnel – Management Services, LLC, Los Angeles County Superior Court, case number 23STCV14968

4. Plaintiff’s Oscar Martinez’s Opposition to Defendant Partners Personnel – Management Services, LLC’s Petition for an Order to Compel Arbitration of Plaintiff’s Individual Claims, filed March 11, 2024, in the matter of Oscar Martinez v. Potential Industries, Inc.; Partners Personnel – Management Services, LLC, case number 23STCV14968

5. Defendant Partners Personnel – Management Services, LLC’s Reply Brief In Support of Petition for Order Compelling Arbitration of Plaintiff’s Individual Claims, filed March 26, 2024, in the matter of Oscar Martinez v. Potential Industries, Inc.; Partners Personnel – Management Services, LLC, case number 23STCV14968

6. Ruling on Hearing on Motion to Compel Arbitration, filed on April 2, 2024, in the matter of Oscar Martinez v. Potential Industries, Inc.; Partners Personnel – Management Services, LLC, Los Angeles Superior Court, case number 23STCV14968

Citing Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260, Hay v. Marinkovich (2025) 108 Cal.App.5th 707, and Cal. Rules of Court, rule 8.1115(a), Plaintiff contends in opposition that the Court cannot take judicial notice of an unpublished trial court opinion. Plaintiff is mistaken.

Cal. Rules of Court, rule 8.1115(a) provides that apart from certain exceptions, “an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action.” (Ibid, [italics added].) Cal. Rules of Court, rule 8.1115(a) does not apply to trial court opinions or documents. Moreover, even presuming that Cal. Rules of Court, rule 8.1115(a) does apply to trial court opinions, unpublished opinions can still be cited “[w]hen the opinion is relevant under the doctrines of law of the case, res judicata, or collateral estoppel[.]” (Cal. Rules of Court, 8.1115(b)(1) [italics added].) The documents of which Defendant Partners seek judicial notice involve what appears to be an identical arbitration agreement. Thus, there is some relevance under the doctrines of law of this case.

Hernandez and Hay merely restate that – subject to certain exceptions – Cal. Rules of Court, rule 8.1115(a) prohibits courts from taking judicial notice of unpublished cases. (See e.g., Hay v. Marinkovich (2025) 108 Cal.App.5th 707 Fn. 2 [“with certain exceptions, ‘the Rules of Court generally prohibit us from noticing unpublished opinions.’ (Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260, 269, fn. 2, citing Cal. Rules of Court, rule 8.1115(a).)”].) Neither Hernandez nor Hay stand for the proposition that the Court cannot take judicial notice of other trial court orders or documents. (Los Angeles County Metropolitan Transportation Authority v. Yum Yum Donut Shops, Inc. (2019) 32 Cal.App.5th 662, 673 [“ ‘Cases are not authority for propositions not considered.’ ”].)

However, Plaintiff is correct in that the trial court’s ruling in the matter of Oscar Martinez v. Potential Industries, Inc.; Partners Personnel – Management Services, LLC Los Angeles Superior Court, case number 23STCV14968 has no precedential or binding effect on this matter. (In re Molz (2005) 127 Cal.App.4th 836, 845.)

In conjunction with the supplemental opposition, Plaintiff requests that the Court take judicial notice of:

1. From Mondragon v. Sunrun, Inc. Los Angeles Superior Court Case Number 22STCV25672, Index of Exhibits in Support of Defendant’s Motion to Compel arbitration.

Accordingly, because the court may take judicial notice of court records and government records, (See Evid. Code, § 452(c), (d)), Defendant Partners’ and Plaintiff’s requests for judicial notice of the existence of these orders and pleadings are granted. However, the Court will not take judicial notice of the truth of assertions within these records. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

In conjunction with the opposition, Plaintiff objects to portions of the declaration of Yristal Mariscal. The Court rules as follows:

1. Sustained – Failure to include certified translation by qualified interpreter under Cal. Rules of Court rule 3.1110(g), Evid. Code § 753(a)

2. Sustained – Lack of Foundation, Mariscal is not a qualified interpreter and thus cannot attest that Exhibit B is a direct translation of the arbitration agreement in Exhibit A

In conjunction with the reply, Defendant Partners objects to portions of the declarations of Plaintiff Yesenia Urizar and Attorney Joseph Lavi. The Court rules as follows:

In general, for due process reasons, the moving party generally may not rely on additional evidence filed with its reply papers. (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316.) Evidence filed for the first time in a reply may violate the opposing party’s due process rights if considered by the Court. (Ibid.) Thus, evidence and exhibits presented in support of a reply are not generally allowed. (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 249.) However, it is reversible error for the Court to refuse to consider authenticating evidence in reply for a motion to compel arbitration when the opposing party puts the authentication of a signature at issue in the opposition. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.)

In the moving papers, Defendant Partners asserts that Plaintiff’s claims are subject to an Arbitration Agreement that is in Spanish. (Mariscal Decl. ¶ 11, Exh. A.) Though Defendant Partners included an English translation of the Arbitration Agreement with the moving papers, (Mariscal Decl. ¶ 11, Exh. B), Defendant Partners failed to include a certified translation with the moving papers as required, and Plaintiff objected on this ground. (Cal. Rules of Court, Rule 3.1110(g), [“Exhibits written in a foreign language must be accompanied by an English translation, certified under oath by a qualified interpreter.”].) Because Plaintiff challenged the authenticity of the English translation of the Arbitration Agreement, the Court indicated at the April 1, 2025 hearing that it is inclined to consider Defendant Partners’ reply evidence submitted to authenticate the translated version of the Arbitration Agreement. (Espejo, supra, 246 Cal.App.4th at p.1060.) Moreover, the certified translation provided with the reply is directly responsive to Plaintiff’s implied argument that the proffered English translation of the Arbitration Agreement is not an accurate translation of the signed Spanish Arbitration Agreement. To eliminate any prejudice to Plaintiff, the Court has afforded Plaintiff an opportunity to respond. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1538 [“[I]f [reply evidence is] permitted, the other party should be given the opportunity to respond.”].) At the outset of the April 1, 2025 hearing on the instant motion to compel arbitration, the Court granted Plaintiff a continuance and an opportunity to file additional briefing and evidence in response to Defendant Partners’ reply evidence. Plaintiff filed a supplemental opposition on April 18, 2025.

California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability. (See Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-972.) Under Code of Civil Procedure section 1281, a “written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.”

“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, unless it determines that:

(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. . . .” (Code Civ. Proc., § 1281.2.)

The right to arbitration depends upon contract; a petition to compel arbitration is simply a suit in equity seeking specific performance of that contract. (Marcus & Millichap Real Estate Inv. Brokerage Co. v. Hock Inv. Co. (1998) 68 Cal.App.4th 83, 88.) When presented with a petition to compel arbitration, the trial court's first task is to determine whether the parties have in fact agreed to arbitrate the dispute. (Ibid.)

“Rosenthal [v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394] explained: ‘[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. Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence. If the party opposing the petition raises a defense to enforcement—either fraud in the execution voiding the agreement, or a statutory defense of waiver or revocation (see § 1281.2, subds. (a), (b))—that party bears the burden of producing evidence of, and proving by a preponderance of the evidence, any fact necessary to the defense.’ (Rosenthal, supra, at 413.) According to Rosenthal, facts relevant to enforcement of the arbitration agreement must be determined ‘in the manner . . . provided by law for the . . . hearing of motions.’ (Rosenthal, supra, at 413, quoting § 1290.2.) This ‘ordinarily mean[s] the facts are to be proven by affidavit or declaration and documentary evidence, with oral testimony taken only in the court’s discretion.’ (Rosenthal, supra, at 413-414; . . .).” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 761-762.)

Under both the Federal Arbitration Act and California law, arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract. (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) In ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law help guide the court in making this determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.) “With respect to the moving party’s burden to provide evidence of the existence of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court.” (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.)

Here, Defendant Partners asserts that all of Plaintiff’s claims are subject to an arbitration agreement. In support of this assertion, Defendant Partners presents the declaration of Yristal Mariscal, a regional manager for Defendant Partners. (Mariscal Decl. ¶ 1.) Defendant Partners is a staffing company that hires associates, provides basic training and orientation for associates, and connects these associates with clients in need of temporary staff. (Mariscal Decl. ¶¶ 3-4.) As a regional manager, Mariscal oversees multiple branches in her region including the West Covina branch. (Mariscal Decl. ¶ 5.) Because the West Covina branch does not have a branch manager, Mariscal oversees daily operation for the West Covina branch. (Mariscal Decl. ¶ 5.) Thus, Mariscal is familiar with various processes and procedures for the West Covina branch including onboarding for new associates. (Mariscal Decl. ¶ 5.) New associates in the West Covina branch were required to create a unique profile for Defendant Partner’s website consisting of a unique username and password. (Mariscal Decl. ¶ 6.) “Once an associate creates a unique user account, and they are paired with the West Covina branch based on their region preference, then the [Defendant Partners] recruitment staff at the West Covina branch will review the application materials and then personally contact that associate. If the [Defendant Partners] recruitment staff believe that the associate meets all of the basic qualifications, that associate will be hired on and then put through [Defendant Partners’] onboarding process almost immediately. All newly hired associates must complete the onboarding process when they begin their employment.” (Mariscal Decl. ¶ 7.) The new associate can complete the onboarding process on a laptop at the West Covina branch or at home. (Mariscal Decl. ¶¶ 8-9.)

“Regardless of whether an associate chooses to take the onboarding training at home or onsite at the West Covina branch, the onboarding materials and program platform are the same. The orientation materials are presented through a guided computer program … that divide[s] documents and materials into individual categories or sections.” (Mariscal Decl. ¶ 10.) “One section in the guided orientation program presents to the associates an agreement to arbitrate any claims arising out of their employment with [Defendant Partners].” (Mariscal Decl. ¶ 11.) The Arbitration Agreement – along with all other onboarding materials – is available in either English or Spanish. (Mariscal Decl. ¶ 17.)

Based on employment records, Plaintiff became an associate of Defendant Partners when Defendant Partners acquired a staffing company called Nexem Staffing. (Mariscal Decl. ¶ 18.) Plaintiff went through the onboarding in 2020 with the West Covina branch. (Mariscal Decl. ¶ 19.) Plaintiff electronically signed a Spanish version of the Arbitration Agreement. (Mariscal Decl. ¶ 11, Exh. A.) Plaintiff was then assigned to work with Defendant We Pack It All, LLC – an employer client of Defendant Partners. (Mariscal Decl. ¶ 21.) The certified translation of the Spanish version of the Arbitration Agreement provides that:

This Mutual Agreement for Individual Arbitration (“Agreement”) is formalized by and between _____________________ (“Employee”) and Partners Personnel Management Services, LLC (“Company”). Employee and the company are collectively referred to herein as “the Parties”. Employee and Company recognize that disagreements may arise between them before, during or after employment with Company, and that these differences may or may not be related to that relationship. Employee understands and accepts that, in formalizing this Agreement, Employee and Company anticipate obtaining the benefit of a fast, impartial, final and binding dispute resolution procedure via arbitration.

1. Claims covered by this agreement. Employee and Company agree to resolve via binding arbitration all disputes, claims, causes of action, lawsuits, proceedings and/or disputes (“Claims”), past, present or future, relating to or arising from Employee’s employment relationship, or the cessation of the aforementioned relationship, with Company, that Company may have against Employee, or that that Employee may have against (1) Company and its affiliated agents, officers, directors or employees and/or (2) clients of Company or its employees as a whole. The claims covered by this Agreement include all disputes Company and Employee may bring against each other before a court of competent jurisdiction, including, among others, claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act of 1990, Sections 1981 to 1988 of Title 42 of the United States Code, the California Fair Employment and Housing Act, together with other federal, state or local laws, ordinances or regulations based on any public policy, contract, tort or common law, or any claim for costs, rates or other expenses, including attorneys’ fees.

The express purpose of this Agreement is that it be completely mutual, definitive and binding for the Parties with respect to any Claim of any type that may arise from Employee’s employment with Company, and the cessation of that employment.

This Agreement also specifically covers and encompasses all Claims, whether declared or otherwise, that Employee or Company have or may have against the other, and that precede the execution of this Agreement.

2. Claims not covered by this agreement. The following claims are not subject to arbitration under this Agreement: (1) claims for worker’s compensation, state disability benefits, state unemployment benefits, including, among others, Company profit-sharing and the 401(k) plan; (2) administrative charges filed before a federal, state or local government office or agency, such as the Equal Employment Opportunity Commission (“EEOC”) or the National Labor Relations Board (NLRB); (3) a judicial action by any of the parties for a temporary restraining order or a preliminary court order pending arbitration; and (4) any claim that, as a matter of law, cannot be legally subject to arbitration. Nor does this Agreement limit the ability of the Company to report and seek restitution for any criminal action it may discover against Employee.

3. Waiver of collective and representative action. To the maximum extent permitted in law, the arbitration shall be carried out on an individual basis without the right for claims to be arbitrated on the basis of a joint, collective, representative or

4. [sic] class action, or on grounds involving claims filed allegedly in a representative capacity on behalf of others. The authority of the arbitrator to resolve and issue written awards is limited solely to claims between Employee and Company. Claims may not be joined or consolidated unless so agreed by all of the parties in writing. No arbitral award or decision shall have any preclusive effect with respect to matters or claims in any dispute with any individual who is not party to the arbitration. Should this waiver of representative or joint action be found illegal for any reason, all collective, representative or class actions are required to be heard in court and not by an arbitrator.

*** Nothing in this Agreement should be construed as a waiver of any right Employee may have to file a representative action under the Private Attorneys General Act of California (also known as “PAGA”) in any court of competent jurisdiction, nor shall the Agreement require Employee to arbitrate any PAGA claim or action.

5. Obligatory notification of all claims and statutes of limitation. Company and Employee agree that the prejudiced party must notify the other party in writing of any Claim no later than the applicable prescriptive period stipulated in law, failing which the claim shall be void and shall be regarded as waived. A written notice shall be sent to Company, or to its partners, owners, employees or agents, to 3820 State Street, Suite B, Santa Barbara, CA 93105. Employee shall receive a written notice at the last known address provided by them to Company. The written notice shall identify and describe the nature of all the claims filed and the facts upon which the aforementioned claims are based, and the requested relief or restitution. The notice shall be sent to the other party via certified or registered mail, with acknowledgment of receipt being requested.

6. Law governing the agreement. This Agreement shall be construed, interpreted, governed and applied pursuant to the laws of the State of California, including, among others, the California Arbitration Act (California Code of Civil Procedure, section 1280 et seq.), regardless of the provisions for legal election. The parties agree that the location of the proceedings and personal and exclusive jurisdiction shall be the State of California.

7. Arbitration proceedings. The arbitration shall be carried out by a single neutral arbitrator pursuant to the Arbitration Rules and Mediation Procedures of the American Arbitration Association (“AAA”), that may be consulted at http://www.adr.org/employment. Employee may obtain a copy of these rules on request. In the event of discrepancy between the arbitration proceedings stipulated in this Agreement and the AAA rules specified above, the AAA rules shall prevail, unless those rules are in violation of the applicable law.

The Arbitrator shall have the power to award any type of legal or equitable compensation available in a court of competent jurisdiction, including, among others, attorneys’ fees and expenses, to the extent the aforementioned redress is available pursuant to the law.

Company shall pay the arbitrator’s fees and shall assume all of the AAA’s administrative charges.

The Arbitrator shall issue a written award, establishing the adjudication and basis for the latter with sufficient detail to permit judicial review to the extent permitted in law. The award shall be final and binding for the parties. The Arbitrator shall have the power to grant any type of redress that is available in a court of competent jurisdiction. Any relief or recovery shall be limited to that awarded by the arbitrator. In addition, the Arbitrator shall have the authority to order any party found to have filed any claim or defense without substantive justification to pay the attorney’s fees and costs of the other party pursuant to the applicable legal regulations, such as Fed. R. Civ. P. 11 or Cal. Code of Civ. Proc. 128.7. Any award may be entered as a judgment in any court of competent jurisdiction.

The parties shall have the right to carry out reasonable discovery, that may be limited by the arbitrator, in the form of requests for documents, cross-examination, requests for admission, physical and/or mental exams and depositions, with the aim of obtaining information to pursue or defend against the filed claims.

The Parties agree and understand that any redress or recovery to which Employee is entitled for any Claim arising from Employee or due to the termination of Employee’s employment shall be limited to that awarded by the arbitrator.

8. Third-party beneficiaries. Any Client of the Company shall be regarded as a third-party beneficiary by virtue of this Agreement for the purposes of being able to enforce compliance with this Agreement with respect to any claim between myself and the aforementioned Client of the Company.

9. Consideration. The undertakings of Company and Employee to arbitrate disputes instead of litigating them before courts or other bodies constitute mutual consideration.

10. Severability. Should any provision in this Agreement, or any part thereof, be regarded as or declared illegal, void or unenforceable, either wholly or in part, by a court of competent jurisdiction, the aforementioned adjudication shall not affect the validity of the rest of the Agreement, that shall remain in full force and effect without the aforementioned provision(s) or part of the aforementioned provision(s).

11. Requirements for amendment or annulment. The Parties acknowledge that this Agreement shall survive the termination of Employee’s employment with Company. It may only be annulled or amended via a document signed by the Parties specifically stating their intention to annul or amend this Agreement.

14. Voluntary agreement. Employee acknowledges and understands that they have read this Agreement and understand its terms, that Employee has had ample opportunity to propose revisions to this agreement and/or consult an attorney or other advisor, that Employee has taken advantage of that opportunity to do so to the desired extent, and that said Employee is knowingly and voluntarily formalizing this Agreement without coercion or duress, without relying on any promises or representations from Company that are not those contained in the actual Agreement, and with the knowledge that, should Employee have elected not to sign this Agreement, Company shall not take any adverse employment measure against Employee

The Spanish version of the Arbitration Agreement appears to be electronically signed by Plaintiff. (Mariscal Decl. ¶ 11, Exh. A.) “[D]efendants may meet their initial burden to show an agreement to arbitrate by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature.” (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060; see also Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543-544 [“The party seeking arbitration can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the respondent's signature.”].) Accordingly, Defendant meets its moving burden by providing a copy of the Arbitration Agreement that appears to be electronically signed by Plaintiff. (Mariscal Decl. ¶ 11, Exh. A.)

In opposition, Plaintiff does not dispute signing the Arbitration Agreement. Rather, Plaintiff contends that (1) the Arbitration Agreement is covered by the California Arbitration Act and therefore unenforceable, and (2) the Arbitration Agreement is unconscionable and therefore unenforceable.

“A party seeking to enforce an arbitration agreement has the burden of showing FAA preemption.” (Lane v. Francis Capital Mgmt. LLC (2014) 224 Cal.App.4th 676, 687.) “The FAA applies to contracts that involve interstate commerce (9 U.S.C. §§ 1, 2), but since arbitration is a matter of contract, the FAA also applies if it is so stated in the agreement.” (Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 963.) If the agreement is silent, the FAA provides for enforcement of arbitration provisions in any “‘contract evidencing a transaction involving commerce.’ (9 U.S.C. § 2.)” (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 277.) Accordingly, “[t]he party asserting the FAA bears the burden to show it applies by presenting evidence establishing the contract with the arbitration provision has a substantial relationship to interstate commerce[.]” (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 234.)

Moreover, “[p]arties can avoid preemption by expressly agreeing to apply state law to their agreements, whether state substantive law, state procedural law, or both.” (Hernandez v. Sohnen Enterprises, Inc. (2024) 102 Cal.App.5th 222, 240.) “There is no federal policy favoring arbitration under a certain set of procedural rules; the federal policy is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate.” (Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 469.) “When parties have agreed to arbitrate in accordance with state substantive and/or procedural law, the FAA does not preempt the state law to which the parties agreed.” (Hernandez, supra, 102 Cal.App.5th at p.240.) Thus, “[i]f parties expressly agree to apply the CAA, or agree to apply California law, including California's arbitration rules, then the state arbitration laws will not be preempted by the FAA.” (Ibid.) “Arbitration under the [FAA] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit. Just as they may limit by contract the issues which they will arbitrate, …, so too may they specify by contract the rules under which that arbitration will be conducted.” (Volt, supra, 489 U.S. at p.479.)

Here, the Arbitration Agreement does not state that the FAA applies. Rather, the Arbitration Agreement expressly provides that it “shall be construed, interpreted, governed and applied pursuant to the laws of the State of California, including, among others, the California Arbitration Act (California Code of Civil Procedure, section 1280 et seq.), regardless of the provisions for legal election.” (Supp. Nelson Decl. ¶ 5, Exh. G at ¶ 6.) Because the Arbitration Agreement expressly incorporates California substantive law and procedural law, “the state arbitration laws [are] not [] preempted by the FAA.” (Hernandez, supra, 102 Cal.App.5th at p.240.) Moreover, “as here, the parties have agreed to abide by state rules of arbitration, enforcing those rules according to the terms of the agreement is fully consistent with the goals of the FAA[.]” (Volt, supra, 489 U.S. at p.479.)

Under Labor Code section 432.6, “[a] person shall not, as a condition of employment, continued employment, or the receipt of any employment-related benefit, require any applicant for employment or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2 of the Government Code) or this code, including the right to file and pursue a civil action or a complaint with … any court or other governmental entity of any alleged violation.” (Lab. Code, § 432.6(a).) “[A]n agreement that requires an employee to opt out of a waiver or take any affirmative action in order to preserve their rights is deemed a condition of employment.” (Lab. Code, § 432.6(c).)

Plaintiff’s claim that the Arbitration Agreement was a condition of employment is unavailing. Plaintiff states that she was told by a female employee of Defendant Partners that she needed to sign and complete all onboarding documents. (Urizar Decl. ¶ 4.) Plaintiff further claims that no one told her that the Arbitration Agreement was optional. (Urizar Decl. ¶ 4.)

However, the Arbitration Agreement by its own terms expressly provides that it is a voluntary agreement. The Arbitration Agreement provides in relevant part that:

14. Voluntary agreement. Employee acknowledges and understands that they have read this Agreement and understand its terms, that Employee has had ample opportunity to propose revisions to this agreement and/or consult an attorney or other advisor, that Employee has taken advantage of that opportunity to do so to the desired extent, and that said Employee is knowingly and voluntarily formalizing this Agreement without coercion or duress, without relying on any promises or representations from Company that are not those contained in the actual Agreement, and with the knowledge that, should Employee have elected not to sign this Agreement, Company shall not take any adverse employment measure against Employee

This paragraph of the Arbitration Agreement makes clear that the Arbitration Agreement was not a condition of employment. Thus, Labor Code section 432.6 is inapplicable.

The fact that Plaintiff failed to read the Arbitration Agreement – including the clause specifying that the Arbitration Agreement was voluntary – is not a basis for avoiding arbitration. Moreover, there is no evidence that Plaintiff asked any questions about the Arbitration Agreement or was otherwise prevented from asking any questions about the Arbitration Agreement if she was unable to read it. “‘Reasonable diligence requires the reading of a contract before signing it. A party cannot use his own lack of diligence to avoid an arbitration agreement.’” (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215 [internal citation omitted].) “It is well established, in the absence of fraud, overreaching or excusable neglect, that one who signs an instrument may not avoid the impact of its terms on the ground that he failed to read the instrument before signing it.” (Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal. App. 4th 158, 163.) Generally, “one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it. If he cannot read, he should have it read or explained to him.” (Id.)

1. Claims covered by this agreement. Employee and Company agree to resolve via binding arbitration all disputes, claims, causes of action, lawsuits, proceedings and/or disputes (“Claims”), past, present or future, relating to or arising from Employee’s employment relationship, or the cessation of the aforementioned relationship, with Company, that Company may have against Employee, or that that Employee may have against (1) Company and its affiliated agents, officers, directors or employees and/or (2) clients of Company or its employees as a whole. The claims covered by this Agreement include all disputes Company and Employee may bring against each other before a court of competent jurisdiction, including, among others, claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act of 1990, Sections 1981 to 1988 of Title 42 of the United States Code, the California Fair Employment and Housing Act, together with other federal, state or local laws, ordinances or regulations based on any public policy, contract, tort or common law, or any claim for costs, rates or other expenses, including attorneys’ fees.

*** Nothing in this Agreement should be construed as a waiver of any right Employee may have to file a representative action under the Private Attorneys General Act of California (also known as “PAGA”) in any court of competent jurisdiction, nor shall the Agreement require Employee to arbitrate any PAGA claim or action.

Here, Plaintiff’s claims in the Class Action complaint and the PAGA Action complaint each arise from Plaintiff’s employment relationship with Defendant Partners. (Class Action Complaint ¶¶ 1-12; PAGA Action Complaint ¶¶ 1-3.) Thus, all of Plaintiff’s claims in the Class Action complaint are subject to the Arbitration Agreement.

However, because the Arbitration Agreement expressly provides that it does not “require Employee to arbitrate any PAGA claim or action[.]” (Supp. Nelson Decl. ¶ 5, Exh. G at ¶ 4), the Arbitration Agreement does not apply to any portion of any PAGA claim. Accordingly, Plaintiff’s PAGA claim in the PAGA Action – per the terms of the Arbitration Agreement – is not covered by the Arbitration Agreement, and Plaintiff is not required to arbitrate the PAGA claim.

Labor Code “[s]ection 229 authorizes lawsuits for unpaid wages even if the parties agreed to arbitrate these claims: ‘Actions to enforce the provisions of this article for the collection of due and unpaid wages claimed by an individual may be maintained without regard to the existence of any private agreement to arbitrate.’” (Muller v. Roy Miller Freight Lines, LLC (2019) 34 Cal.App.5th 1056, 1070.) “Section 229 is found in article 1 of division 2, part I, chapter 1 of the Labor Code, encompassing sections 200 through 244. Thus, if a cause of action seeks to collect due and unpaid wages pursuant to sections 200 through 244, that action can be maintained in court, despite an agreement to arbitrate.” (Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 684.)

Here, Plaintiff brings four claims that may potentially be encompassed by Labor Code section 229 – i.e., claims under Labor Code section 200-244 – the third cause of action for failure to authorize meal periods under Labor Code section 226.7, the fourth cause of action for failure to authorize or permit rest periods in violation of section 226.7, the sixth cause of action for failure to provide complete and accurate wage statements in violation of Labor Code section 226, and the seventh cause of action for failure to pay all wages timely upon separate of employment in violation of Labor Code sections 201, 202 and 203.

The third and fourth causes of action under Labor Code section 226.7 are not actions for nonpayment of wages for purposes of Labor Code section 229. (Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1257 [“a section 226.7 claim is not an action brought for nonpayment of wages; it is an action brought for non-provision of meal or rest breaks.”].) Similarly, the sixth cause of action for violation of Labor Code section 226 is for failing to provide accurate wage statements – not for the collection of due and unpaid wages. (See e.g., Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 684 [finding that Labor Code section 229 does not cover a claim for failure to provide accurate wage statements].)

The only cause of action that is for due and unpaid wages and is covered by Labor Code section 229 is part of the seventh cause of action for failure to pay all wages timely upon separation of employment. Under the seventh cause of action for unpaid wages, Plaintiff seeks “all wages due” under Labor Code sections 201 and 202. (Class Action Complaint ¶ 164.) In the seventh cause of action, Plaintiff also seeks waiting time penalties for the failure to timely pay wages under Labor Code section 203. (Class Action Complaint ¶ 165.) To the extent that the seventh cause of action seeks unpaid wages under Labor Code sections 201 and 202, it is a claim for unpaid wages exempt from arbitration under Labor Code section 229. (See e.g., Kirby, supra, 53 Cal.4th at pp. 1255–1256, [“Sections 201 and 202 provide a useful contrast to section 226.7. Section 201 provides that when ‘an employer discharges an employee, the wages earned and unpaid at the time of the discharge are due and payable immediately’ (§ 201,subd. (a)), and section 202 provides that when an ‘employee has given 72 hours previous notice of his or her intention to quit, ... the employee is entitled to his or her wages at the time of quitting’ (§ 202, subd. (a)). When an employee sues on the ground that his or her former employer has violated one of these provisions, the suit is an ‘action brought for the nonpayment of wages.’ In other words, the employer's nonpayment of wages is the basis for the lawsuit.”].) However, to the extent that Plaintiff’s seventh cause of action seeks waiting time penalties under Labor Code section 203, Labor Code section 229 is inapplicable. (Lane, supra 224 Cal.App.4th at p.684 [finding that Labor Code section 229 does not cover a claim for waiting time penalties].)

In sum, pursuant to Labor Code section 229, the Arbitration Agreement is ineffective as to Plaintiff’s seventh cause of action to the extent that it seeks unpaid wages under Labor Code sections 201 and 202.

Though only Defendant Partners is named in the Arbitration Agreement, the Parties do not dispute that Defendant We Pack It All, LLC is also entitled to enforce the Arbitration Agreement.

“It is well established that a non-signatory beneficiary of an arbitration clause is entitled to require arbitration.” (Harris v. Superior Court (1986) 188 Cal.App.3d 475, 478.) “[A] third party — that is, an individual or entity that is not a party to a contract — may bring a breach of contract action against a party to a contract only if the third party establishes not only (1) that it is likely to benefit from the contract, but also (2) that a motivating purpose of the contracting parties is to provide a benefit to the third party, and further (3) that permitting the third party to bring its own breach of contract action against a contracting party is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.” (Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 821.)

“A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” (Civ. Code, § 1559.) “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. [Citation.] If the terms of the contract necessarily require the promisor to confer a benefit on a third person, then the contract, and hence the parties thereto, contemplate a benefit to the third person. The parties are presumed to intend the consequences of a performance of the contract.” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1022.)

“[T]he third person need not be named or identified individually to be an express beneficiary.” (Id. at p.1023.) “‘A third party may enforce a contract where he shows that he is a member of a class of persons for whose benefit it was made.’” (Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 838-839.)

Here, the Arbitration Agreement provides that it applies to Defendant Partners’ “affiliated agents, officers, directors or employees and/or (2) clients of Company or its employees as a whole.” (Supp. Nelson Decl. ¶ 5, Exh. G at ¶ 1 [italics added].) Further, the Arbitration Agreement expressly provides that “[a]ny Client of the Company shall be regarded as a third-party beneficiary by virtue of this Agreement for the purposes of being able to enforce compliance with this Agreement with respect to any claim between myself and the aforementioned Client of the Company.” (Supp. Nelson Decl. ¶ 5, Exh. G at ¶ 8 [italics added].) Defendant We Pack It All, LLC is a client of the company. (Mariscal Decl. ¶ 21.) Thus, Defendant We Pack It All, LLC is an express third-party beneficiary of the Arbitration Agreement.

Moreover, the Class Action complaint alleges that all of the Defendants were acting as agents of each other when the alleged misconduct occurred. (Class Action Complaint ¶ 11, [“At all times mentioned herein, each Defendants was the co-conspirator, agent, servant, employee, and/or joint venturer of each of the other Defendants and was acting within the course and scope of said conspiracy, agency, employment, and/or joint venture and with the permission and consent of each of the other Defendants.”) (See 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1199–1200 [in action concerning former employee’s claims against employer and various employees for sexual harassment in the workplace, employee defendants who were not parties to the arbitration agreement were entitled to its benefit because the complaint alleged they were acting as agents for the employer at the time of the alleged wrongful conduct.].)

As the Court of Appeal noted in Thomas v. Westlake (2012) 204 Cal.App.4th 605, a plaintiff's allegations of an agency relationship among defendants are sufficient to allow the alleged agents to invoke the benefit of an arbitration agreement executed by their principal even though the agents are not parties to the agreement. (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614-615.) By having alleged that all defendants acted as agents of one another, Plaintiff is bound by the legal consequences of his allegations because it would be unfair to the defendants to allow Plaintiff to invoke agency principles when it is to his advantage to do so but to disavow those same principles when it is not. (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614-615.)

“Once such a document is presented to the court, the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges.” (Baker, supra, 13 Cal.App.5th at p.1160.)

“California courts analyze unconscionability as having a procedural and a substantive element.” (Kinney v. United Healthcare Services, Inc. (1999) 70 Cal.App.4th 1322, 1329.) “[B]oth elements must be present before a contract or contract provision is rendered unenforceable on grounds of unconscionability.” (Ibid.) The doctrine of unconscionability refers to “an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.” (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1133.) It consists of procedural and substantive components, “the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.” (Ibid.) Although both components of unconscionability must be present to invalidate an arbitration agreement, they need not be present in the same degree. (Armendariz v. Found Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114.) “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. [Citations.] 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.) “The party resisting arbitration bears the burden of proving unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Dev. (US), LLC (2012) 55 Cal.4th 223, 247.)

“ ‘Procedural unconscionability’ concerns the manner in which the contract was negotiated and the circumstances of the parties at that time. [Citation.] It focuses on factors of oppression and surprise. (Ibid.)” (Kinney, supra, 70 Cal.App.4th at p.1329.) “ ‘ “ ‘Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form.’ ” ’ ” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.) “ ‘[A] finding of procedural unconscionability does not mean that a contract will not be enforced, but rather that courts will scrutinize the substantive terms of the contract to ensure they are not manifestly unfair or one-sided.’ ” (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244.)

Plaintiff asserts that the Arbitration Agreement is procedurally unconscionable because it is an adhesion contract.

The term adhesion contract “ ‘signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’ [Citation.]” (Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 817.)

Though the Arbitration Agreement was presented on a take-it-or-leave-it basis as a part of onboarding, (Mariscal Decl. ¶ 11), any procedural unconscionability here is minimal. The Arbitration Agreement was not a condition of employment. Instead, the Arbitration Agreement expressly provides that it is a voluntary agreement and that there would be no adverse consequences to Plaintiff for declining to enter into it:

14. Voluntary agreement. Employee acknowledges and understands that they have read this Agreement and understand its terms, that Employee has had ample opportunity to propose revisions to this agreement and/or consult an attorney or other advisor, that Employee has taken advantage of that opportunity to do so to the desired extent, and that said Employee is knowingly and voluntarily formalizing this Agreement without coercion or duress, without relying on any promises or representations from Company that are not those contained in the actual Agreement, and with the knowledge that, should Employee have elected not to sign this Agreement, Company shall not take any adverse employment measure against Employee

(Supp. Nelson Decl. ¶ 5, Exh. G [italics added].) Thus, by the express terms of the Arbitration Agreement, Plaintiff could have rejected the Arbitration Agreement without fear of repercussion.

At the same time, however, there is no evidence to show that Plaintiff could have negotiated or otherwise made changes to Arbitration Agreement – i.e., it was presented on a take-it-or-leave-it basis. Thus, Plaintiff does show that the Arbitration Agreement is an adhesion contract.

“It is well settled that adhesion contracts in the employment context, that is, those contracts offered to employees on a take-it-or-leave-it basis, typically contain some aspects of procedural unconscionability.” (Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704.) However, “this adhesive aspect of an agreement is not dispositive.” (Ibid.) In the absence of “surprise or other sharp practices,” courts do not recognize that “adhesive” arbitration agreements establish a high degree of procedural unconscionability. (Baltazar v. Forever 21 Inc. (2016) 62 Cal.4th 1237, 1245.)

At most, the Court finds that Plaintiff shows a minimal degree of procedural unconscionability. However, “a finding of procedural unconscionability does not mean that a contract will not be enforced, but rather that courts will scrutinize the substantive terms of the contract to ensure they are not manifestly unfair or one-sided.” (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 915.)

“Substantive unconscionability” focuses on the terms of the agreement and whether those terms are “so one-sided as to ‘shock the conscience.’” (Kinney, supra, 70 Cal.App.4th at p.1330.)

Plaintiff contends that the Mutual Arbitration Provision is substantively unconscionable because (1) the scope and duration are improperly overbroad, and (2) the Arbitration Agreement contains a waiver of public injunctive relief.

Relying on Cook v. University of Southern California (2024) 102 Cal.App.5th 312, Plaintiff contends that the Arbitration Agreement is unconscionable due to its unlimited duration and scope.

In Cook, the plaintiff filed suit against her employer – a University – for claims arising from her employment including race discrimination, failure to accommodate health-related time-off requests, and retaliatory harassment. (Cook, supra, 102 Cal.App.5th at p.317.) The employer moved to compel arbitration on the basis of an arbitration agreement that provided that employee “agree[d] to the resolution by arbitration of all claims, whether or not arising out of Employee's University employment, remuneration or termination, that Employee may have against the University or any of its related entities[.]” (Id. at p.317 [italics added].) The arbitration agreement further provided that it would “survive the termination of Employee's employment, and may only be revoked or modified in a written document that expressly refers to the ‘Agreement to Arbitrate Claims’ and is signed by the President of the University.” (Ibid.) The trial court denied the defendant’s motion to compel arbitration on the grounds that the agreement was unconscionable. (Id. at pp.317-319.) The Court of Appeal affirmed, concluding – in relevant part – that the arbitration agreement’s scope and duration were unconscionable. (Id. at pp.321-326.)

The Court of Appeal found that the plain language of the arbitration agreement required the plaintiff to arbitrate claims that were unrelated to her employment with the defendant. (Id. at p.321.) The Court of Appeal held that because “the arbitration agreement does not spell out any need for the broad scope and [the defendant] did not make any attempt to factually establish this need in the trial court … [the defendant] ha[d] not established a legitimate justification for the broad scope of the arbitration agreement.” (Id. at p.325.) Thus, the Court of Appeal found no error in the trial court’s conclusion that the broad scope of the arbitration agreement was unconscionable. (Ibid.)

As to duration, the Court of Appeal concluded that by requiring written permission from the President of the University to terminate the arbitration agreement, the duration was unlimited. (Id. at p.325.) Coupled with the broad scope of the arbitration agreement – i.e., the inclusion of claims unrelated to the plaintiff’s employment – “if [the plaintiff] was ‘the victim of a botched surgery in [one of defendant’s] hospital in 15 years, her claims could be subject to the arbitration agreement.’” (Id. at p.318.) Thus, the Court of Appeal concluded that it was not error for the trial court to find that this duration coupled with the broad scope was unconscionable. (Id. at p.326.)

In contrast to Cook, the Arbitration Agreement here does not suffer from the same unlimited scope and duration. The Arbitration Agreement applies only to “all disputes, claims, causes of action, lawsuits, proceedings and/or disputes (“Claims”), past, present or future, relating to or arising from Employee’s employment relationship, or the cessation of the aforementioned relationship, with Company, that Company may have against Employee, or that that Employee may have against (1) Company and its affiliated agents, officers, directors or employees and/or (2) clients of Company or its employees as a whole” (Supp. Nelson Decl. ¶ 5, Exh. G at ¶ 1 [italics added].) Further, the Arbitration Agreement “also specifically covers and encompasses all Claims, whether declared or otherwise, that Employee or Company have or may have against the other, and that precede the execution of this Agreement.” (Supp. Nelson Decl. ¶ 5, Exh. G at ¶ 1 [italics added].) Thus, the Arbitration Agreement only covers claims that Plaintiff had against Defendants before signing the Arbitration Agreement and those arising from Plaintiff’s employment with Defendants.

The plain language of the Arbitration Agreement demonstrates that it is not unlimited in scope – as was the arbitration agreement in Cook. The Arbitration Agreement clearly applies only to claims that arise from Plaintiff’s employment or claims that existed prior to the execution of Arbitration Agreement – necessarily limiting the duration to claims that arose during Plaintiff’s employment.

“[A]n arbitration provision that waives a plaintiff's right to seek public injunctive relief in any forum is invalid and unenforceable.” (Ramsey v. Comcast Cable Communications, LLC (2023) 99 Cal.App.5th 197, 205.)

Plaintiff contends that the Arbitration Agreement improperly waives the right for Plaintiff to seek public injunctive relief. However, Plaintiff fails to identify any particular language in the Arbitration Agreement at all that prohibits Plaintiff from seeking public injunctive relief in any forum. Nor does the Court’s review of the Arbitration Agreement reveal any such language. To the contrary, the Arbitration Agreement expressly excludes claims for “a judicial action by any of the parties for a temporary restraining order or a preliminary court order pending arbitration” from arbitration. (Supp. Nelson Decl. ¶ 5, Exh. G at ¶ 2.) Thus, Plaintiff can seek public injunctive relief in court.

By contrast, in Vaughn v. Tesla, Inc. (2023) 87 Cal.App.5th 208 – on which Plaintiff relies – the Court of Appeal concluded that a provision that “‘[t]he arbitrator shall not have the authority to ... award relief to a group or class of employees in one arbitration proceeding’” constituted a waiver of the right to public injunctive relief. (Id. at p.228.) Here, there is no such similar language.

Thus, the Arbitration Agreement does not contain a waiver of the right to seek public injunctive relief.

Defendant Partners contend that the class claims must be dismissed pursuant to a class action waiver at paragraph three of the Arbitration Agreement. (Motion at pp.10:24-11:6.) In opposition, Plaintiff contends that arbitration must be denied in its entirety due to this class action waiver under the Gentry factors set forth in Gentry v. Superior Court (2007) 42 Cal.4th 443.

Though entitled a “Waiver of collective and representative action[,]” the relevant clause of the Arbitration Agreement provides that:

3. Waiver of collective and representative action. To the maximum extent permitted in law, the arbitration shall be carried out on an individual basis without the right for claims to be arbitrated on the basis of a joint, collective, representative or

4. class action, or on grounds involving claims filed allegedly in a representative capacity on behalf of others. The authority of the arbitrator to resolve and issue written awards is limited solely to claims between Employee and Company. Claims may not be joined or consolidated unless so agreed by all of the parties in writing. No arbitral award or decision shall have any preclusive effect with respect to matters or claims in any dispute with any individual who is not party to the arbitration. Should this waiver of representative or joint action be found illegal for any reason, all collective, representative or class actions are required to be heard in court and not by an arbitrator.

Clearly, there appears to be at least one typographical error in the Arbitration Agreement because paragraphs 3 and 4 are split in the middle of a sentence. Mid-sentence, a new paragraph (paragraph 4) begins. The heading “Waiver of collective and representative action” is confusing because the body of the paragraph with that heading does not contain any express class action waiver or express waiver of the right to bring a representative action. To the contrary, the body of the paragraph includes a provision that “[n]othing in this Agreement should be construed as a waiver of any right Employee may have to file a representative action under the Private Attorneys General Act of California (also known as “PAGA”) in any court of competent jurisdiction.” The language “[s]hould this waiver of representative or joint action be found illegal for any reason, all collective, representative or class actions are required to be heard in court and not by an arbitrator” is odd and misplaced in light of this Court’s finding that there is no express waiver of representative or joint actions in the arbitration agreement. What this language suggests is that perhaps there may have been an intent to add or include a class action waiver, meaning a dismissal of all class claims. However, any such class action waiver was omitted. There is no clear waiver of the right to bring a representative action or class action. Thus, the Court finds that the language “[s]hould this waiver of representative or joint action be found illegal for any reason, all collective, representative or class actions are required to be heard in court and not by an arbitrator” is simply inapplicable. Applying the express terms that are written in the Arbitration Agreement, the Court finds that Plaintiff is still free to pursue class claims and a PAGA representative claim. Further, in light of the parties’ express agreement that class actions and collective actions are required to be heard in court, the class claims survive and must be litigated – not arbitrated.

Alternatively, even if the Court were to agree with Defendant that the ambiguous language in the arbitration agreement cited above constitutes a waiver of class claims (which the Court does not agree), Gentry v. Superior Court (2007) 42 Cal.4th 443 (“Gentry”) would prevent application of any such class action waiver.

In Gentry, the California Supreme Court held that “class [action] waivers should not be enforced if a trial court determines . . . that class arbitration would be a significantly more effective way of vindicating the rights of affected employees than individual arbitration.” (Id. at p.450.) A party opposing enforcement of a class action waiver must show:

[1] the modest size of the potential individual recovery, [2] the potential for retaliation against members of the class, [3] the fact that absent members of the class may be ill informed about their rights, and [4] other real world obstacles to the vindication of class members’ right[s] . . . through individual arbitration.

As to the first Gentry factor, Plaintiff’s Counsel testifies that based on his experience any individual recovery would likely be modest. (Lavi Decl. ¶ 6.) To support this claim, Plaintiff’s Counsel estimates that Plaintiff would likely only recover approximately $17,361.92 in damages. (Lavi Decl. ¶¶ 7-13.) Plaintiff worked for Defendants for 38 months at minimum wage –between $15 and $15.50 during this time period. (Garcia Decl. ¶ 8; Lavi Decl. ¶ 7; Urizar Decl. ¶ 5.) “[A]ssuming ten minutes a week lost on rounding and ten minutes a week based on off the clock work during meal periods, this would result in $933.17 (.3333 hours x 165 weeks x $15.15) in unpaid minimum wage for Plaintiff.” (Lavi Decl. ¶ 7.) For unpaid meal periods, “assuming three days a week resulted in improperly rounded meal periods and/or work during a meal period, this would result in approximately $7,499 ($15.15 x 3 days x 165 weeks) in unpaid meal period wages for Plaintiff.” (Lavi Decl. ¶ 8.) For the rest period violations, “assuming Plaintiff did not receive a legally compliant rest period one day a week, this would result in approximately $2,499.75 ($15.15 x 1 days x 165 weeks) in unpaid meal period wages for Plaintiff.” (Lavi Decl. ¶ 9.) For the failure to reimburse Plaintiff “based on required use of Plaintiff’s cell phone as part of her employment during the 38 months of her employment (Bello Decl. Ex. 1) and presuming a reasonable reimbursement of $20 per month, this would result in approximately $760 (38 months x $20 per month).” (Lavi Decl. ¶ 10.) Because Plaintiff was paid on a weekly basis and there are 20 pay periods within the statute of limitation the “derivative wage statement claim would have an approximate value of $1,950 ($50 + (19 x $100)).” (Lavi Decl. ¶ 11.) Finally, for Plaintiff’s failure to timely pay wages after separation of employment, Plaintiff’s Counsel estimates that the value of Plaintiff’s claim would be “$3,720 (30 days x 8 hours x $15.50).” (Lavi Decl. ¶ 12.)

In sum, Plaintiff’s counsel provides a very liberal estimation of Plaintiff’s potential damages to be approximately $17,361.92. This is clearly a modest recovery for purposes of Gentry. For example, in Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715 – which Gentry approvingly cited – found that an award “as large as $37,000, the right to recover attorney fees, costs, and interest” was not “ample incentive” for an individual lawsuit.” (Bell, supra, 115 Cal.App.4th at p.745; see also Muro v. Cornerstone Staffing Solutions, Inc. (2018) 20 Cal.App.5th 784, 793 [Finding that a potential recovery less than $26,000 qualified as a modest recovery for purposes of Gentry.].) Nor is it surprising that the potential recovery in the instant action would be modest. “Indeed, in Gentry, the court observed that wage and hour cases will generally satisfy the ‘modest’ recovery factor because they ‘usually involve[ ] workers at the lower end of the pay scale.’” (Garrido v. Air Liquide Industrial U.S. LP (2015) 241 Cal.App.4th 833, 846.)

Second, as to the potential for retaliation, Plaintiff testifies that “[w]hile [she] was employed at We Pack It All, [Plaintiff] did not feel like [she] could have brought a lawsuit against Partners Personnel or We Pack It All, because [she] feared [she] would be fired or retaliated against in some way.” (Urizar Decl. ¶ 11.) This is sufficient for the Court to make the reasonable inference that other similarly situated employees would have experienced the same fear that they would be fired or otherwise retaliated against. (Muro, supra, 20 Cal.App.5th at p.794 [“Muro's expression of his own concerns about retaliation provided a sufficient basis for the court, as the finder of fact, to draw the reasonable inference that other similarly situated drivers shared those same concerns.”].) Indeed, the California Supreme Court recognized in Gentry “that retaining one's employment while bringing formal legal action against one's employer is not ‘a viable option for many employees.’” (Gentry, supra, 42 Cal.4th at p.459.)

As to the third Gentry factor, whether absent class members might be ill-informed about their rights, Plaintiff testified that she only has a middle school education from Guatemala, and during her employment, she “was not familiar with what California law requires exactly for how employees are to be paid or for what meal or rest breaks they are required to get or what costs an employer is required to pay back to employees for use of their cell phones as part of their work.” (Urizar Decl. ¶ 9.) Plaintiff further states that no one from Defendants ever provided any training regarding meal/rest period rules, or that Plaintiff could be entitled to payment for part of her cell phone bill if she was required to use it for the job. (Urizar Decl. ¶ 10.) Based on Plaintiff’s declaration, the Court can infer that other putative class members also did not receive any training or other notice of their rights.[1] Relying on similar evidence, the Courts of Appeal in Garrido and Muro found that this was sufficient to satisfy the third Gentry factor. (Garrido, supra, 241 Cal.App.4th at p.846 [“Garrido declared that he was unaware of his rights under the Labor Code while employed by Air Liquide, and that Air Liquide made no effort to inform him or other truck drivers of such rights. Furthermore, according to Garrido, he was unable to take meal breaks because Air Liquide assigned tight delivery schedules, leading him to believe that he was not entitled to breaks. From this evidence, the trial court could reasonably infer that absent class members may be ill informed of their rights.”]; Muro v. Cornerstone Staffing Solutions, Inc. (2018) 20 Cal.App.5th 784, 795 [Finding that “Muro declared he was unaware of his rights and Cornerstone made no effort to inform him of such rights” was sufficient to meet the third Gentry factor.].)
The fourth Gentry factor is clearly met in the instant wage and hour action as “the requirement that numerous employees suffering from the same illegal practice each separately prove the employer's wrongdoing is an inefficiency that may substantially drive up the costs of arbitration and diminish the prospect that the overtime laws will be enforced.” (Gentry, supra, 42 Cal.4th at p.459.)

Thus, Plaintiff sufficiently shows under the Gentry factors that a class proceeding would be a significantly more effective way of allowing employees to vindicate their statutory rights.

Here, Defendant Partners – and Defendant We Pack It All, LLC by joinder – seek individual arbitration. The terms of the Arbitration Agreement provide that any finding that in the event the class action waiver is unenforceable, any class proceedings shall be litigated in court. Thus, the Court finds that the parties’ intent is not to engage in class arbitration. (Supp. Nelson Decl. ¶ 5, Exh. G at ¶ 4 [“Should this waiver of representative or joint action be found illegal for any reason, all collective, representative or class actions are required to be heard in court and not by an arbitrator.”].)

Accordingly – pursuant to the intent of the parties – Defendant Partners’ motion to compel arbitration must be DENIED.

Based on the foregoing, Defendant Partners Personnel Management Services, LLC motion to compel arbitration and Defendant We Pack It All, LLC’s joinder is DENIED.

Defendants are ordered to download this signed order and file proof of service of the instant order on all other parties within 5 days.

[1] Defendant Partners mentions an employee handbook that may have informed Plaintiff and the putative class members of their rights. (Reply at p.13.) However, Defendant Partners has not provided this employee handbook. Thus, there is no evidence before this Court that the putative class members were adequately informed of their legal rights such that the third Gentry factor is inapplicable in the instant action.