Judge: Frank M. Tavelman, Case: 22BBCV00482, Date: 2023-02-10 Tentative Ruling

Case Number: 22BBCV00482    Hearing Date: February 10, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTIONS TO COMPEL ARBITRATION & STAY MATTER

ALLEGATIONS: 

Silvia Lake (“Plaintiff”) filed suit against GEP Gencast, LLC dba Central Casting (“Defendant”), on July 1, 2022, for claims arising out of her employment with Defendant. The Complaint contains thirteen causes of action: (1) disability discrimination; (2) disability-based harassment; (3) race-based discrimination; (4) sexual harassment; (5) unlawful retaliation in violation of FEHA; (6) failure to prevent harassment, discrimination and retaliation in violation of FEHA; (7) wrongful termination; (8) failure to pay earned wages; (9) failure to pay timely wages during employment; (10) failure to pay all wages due to discharged and quitting employees; (11) failure to furnish accurate itemized wage statements; (12) failure to maintain accurate payroll records; and (13) unfair and unlawful business practices.  

HISTORY: 

The Court received Defendant’s Motion to Compel Arbitration and Motion for Stay on September 14, 2022. The opposition was filed by Plaintiff on January 30, 2023. Reply was filed by Defendant on February 3, 2023.  

RELIEF REQUESTED: 

Defendant moves for an order compelling Plaintiff to submit the entire Complaint to binding arbitration. 

Defendant moves to stay the proceedings pending the Court’s final ruling on the motion to compel arbitration and pending the results of the binding arbitration between the parties. 

ANALYSIS: 

Compel Arbitration 

I.           LEGAL STANDARD 

C.C.P. § 1281.2 states: “[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement arbitrate the controversy exists.”

A party seeking to compel arbitration has the initial burden to prove, by a preponderance of the evidence, the existence of a valid and enforceable arbitration agreement. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) If the moving party has met its initial burden, then the burden shifts to respondents to prove the falsity or unenforceability of the arbitration agreement. (Ibid.) 

II.         MERITS 

Defendant’s Burden to Show Enforceable Arbitration Agreement 

The arbitration agreement (“the agreement”) submitted by Defendant is presented on the reverse side of a voucher Defendant utilizes to pay cast members. (Scala Decl., Exh. 2.) Employees complete a voucher each workday and returned to it to Defendant.  Defendant then contracts with a third party to ensure employees are paid accordingly.  The voucher’s front contains sections for employees to fill out their information and time worked. The front also includes a disclosure with respect to Cal. Labor Code §2810.5 and an employee acknowledgement concerning their tax information. There is a signature line under the labor code provision but none under the tax information certification. In the bottom left corner, the front of the voucher contains a statement that reads as follows:

“By signing above, I agree to all the statements contained on the FRONT AND BACK of this document.”

The entire back of the voucher consists of the arbitration agreement, though there is no separate signature line. Instead, the agreement contains a clause which reads:

“No signature on this agreement is required to be effective. By me (and/or on behalf of my minors, if any) choosing to continue my (and/or my minors') employment or casting relationship with the Company, I (on behalf of myself and/or my minors) agree to be bound by this arbitration agreement as to my/ my minors' entire employment or casting relationship with Company, including any and all jobs that I (and/or my minors) received or will receive through the Company.”

Plaintiff argues that no enforceable arbitration agreement exists because there is no signature line under the arbitration agreement. Plaintiff states that she does not recall receiving any instruction concerning the voucher, how to complete it, or whether she had to sign it. (Lake Decl. ¶7.) Plaintiff states that she instructed to complete the voucher to get paid, and understood the voucher to function as a timecard necessary to her employment with Defendant. Plaintiff argues that the signature blocks on the frontside of the voucher explicitly state or clearly imply that Plaintiff’s signature is required to obtain payment for work she performed on the day the voucher was presented to her. Plaintiff also argues that the disclosure in the lower left-hand corner on the front of the voucher is insufficient to provide notice of assent to arbitration, and that this disclosure is placed deliberately far away from the signature blocks in smaller font so as to render it less visible. 

The Court finds that the Defendant has failed to carry their burden in proving the existence of an enforceable arbitration agreement. The signature on the voucher’s front is not properly associated with the arbitration agreement set forth on the rear of the voucher.  The form presented to Defendant each working day contains two signature fields, neither of which bear any relation to the arbitration agreement printed on the reverse side. The first signature field is located below the Cal. Labor Code §2810.5 disclosure. The second signature line falls below a statement reading “The Undersigned accepts employment on the terms set forth above.” Both of these signature lines are located above the disclosure that the signee is agreeing to all statements on the front and back of the document. The Court finds that a reasonable person would not conclude from this document that their signatures were binding them to arbitration. The disclosure which points to the arbitration agreement on the back in presented in small font in the bottom left-hand corner. Further, the location of the disclosure means that a reasonable person would have already signed the document prior to even seeing the reference to the rear of the voucher.  

The Defendant asserts that the Plaintiff is not required to sign the voucher in order to get paid; however, there is no discussion as to how an employee would get paid without an voucher.  (Wooley Decl. 2:1-2).  The Declaration of Laura Wooley stated that actors are given the voucher prior to working, and then must complete the voucher to get paid for their work.  In effect, the Defendant receives the benefit of services, and only then does the actor sign the voucher.  There is no evidence that Plaintiff was made aware of the arbitration provision or given an option for payment via an alternative means.

The Court finds that Defendant has not produced sufficient evidence of a signed arbitration agreement.

Defendant argues in their motion and reply that even if Plaintiff’s signature is not adequate for assent, her continued employment serves as assent to be bound. Defendant cites to Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, where the California Supreme Court stated that a party’s acceptance of an arbitration agreement can be implied in fact. For this statement, the Pinnacle court cited the ruling in Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420. The court in Brown found that acceptance may be found in instances where arbitration agreements were part of various documentation provided to employees such as employee handbooks or job applications. Additionally, an employees continued employment can also constitute acceptance of an agreement. (Id.)

The Court finds the cases that Defendant relies on are factually inapposite to the case at hand. Brown concerned an arbitration agreement between a company and employee which was implemented postemployment. The company sent a memorandum explaining the arbitration program to employees and emphasized that employees would be bound to arbitrate claims under it. Evidence was produced that this memorandum was sent twice to the employee and included a brochure which explained the arbitration process. The employee then continued to work for the company for several years. The Brown court found that the combination of the above circumstances was sufficient to imply assent to the arbitration.

The Court finds that the circumstances here do not track with those in Brown. Here Plaintiff was not an employee prior to the institution of the arbitration program. Further, unlike Brown, here there was no clear notice to Plaintiff that the arbitration agreement existed. Plaintiff states in her declaration that she was never provided with any explanation of the agreement nor provided any instruction on how to complete the voucher. (Lake Decl. ¶ 7.) Defendant submits no evidence which indicates that such a warning was provided.

Defendant also cites to Harris v. TAP Worldwide, LLC, 248 Cal. App. 4th 373. In Harris the court found that an arbitration agreement that was attached to an employee handbook to be enforceable. The handbook was accompanied by a signed acknowledgement of receipt, which explicitly confirmed and acknowledged receipt of the arbitration agreement attached to the handbook. The Handbook was provided to the employee at the outset of their employment.  

Defendant similarly relies on Gentry v. Superior Court, 42 Cal. 4th 443 and Davis v. Nordstrom (9th Cir. 2014) 755 F.3d 1089. In both of these cases the arbitration agreements were part of documents provided to plaintiffs when they were hired and notice was clearly received. Additionally, both arbitration agreements provided clear ways for employees to opt out of the agreement.

Here, Defendant submits the declaration of Laura Wooley, who attests that Plaintiff was hired by Defendant on January 16, 2012. Presumably some initial hiring paperwork was provided to Plaintiff at this juncture, but neither the Wooley declaration nor Defendant’s submissions reference any. This presumption is furthered by the presence of a statement on the voucher which reads that to be paid, employees must submit and I9 to Central Casting if they have not already done so. Wooley states that employees do not have to fill out the voucher in order to get paid, though she does not attest as to what the alternative procedure is. (Wooley Decl. ¶ 4.)

The cases relied upon by Defendant all center on whether the employee had notice of the existence of an arbitration agreement. Here, Defendant provides no evidence that Plaintiff received notice of the arbitration agreements existence either before or during her employment. Accordingly, the Court finds that Plaintiff cannot be bound without signature.  

III.        CONCLUSION 

The Court finds that an enforceable arbitration agreement does not exist as between Plaintiff and Defendant. Defendant has not produced evidence of a signed arbitration agreement with Plaintiff, nor produced evidence which supports that Plaintiff’s assent to such an agreement can be implied without signature. As such, the Court DENIES the motion to compel arbitration. 

--- 

Stay 

I.           LEGAL STANDARD 

Once arbitration has been compelled, in whole or in part, a stay of proceedings is mandatory if the issues in the arbitration and the pending action overlap. (C.C.P. § 1281.4 (if a court “has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.”)) 

“The purpose of the statutory stay [under section 1281.4] is to protect the jurisdiction of the arbitrator by preserving the status quo until arbitration is resolved. In the absence of a stay, the continuation of the proceedings in the trial court disrupts the arbitration proceedings and can render them ineffective.” (Federal Ins. Co. v. Superior Court (1998) 60 Cal.App.4th 1370, 1374-1375 (citations omitted).) 

II.         MERITS 

As the Court denies the motion to compel arbitration in its entirety, the Court also denies the motion to stay the proceedings pending arbitration. 

III.        CONCLUSION 

The Court denies the instant motion. 

--- 

RULING: 

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Defendant GEP Gencast, LLC dba Central Casting’s Motion to Compel Arbitration and Motion for Stay came on regularly for hearing on February 10, 2023 with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE MOTION TO COMPEL ARBITRATION IS DENIED. 

THE MOTION FOR STAY IS DENIED. 

IT IS SO ORDERED. 

DATE:  February 10, 2023                             _______________________________ 

                                                                         F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles