Judge Holly J. Fujie, Case 21STCV27298 2022-10-04 Tentative Ruling

This action arises out of an employment relationship. Plaintiff’s complaint (the “Complaint”) asserts a representative claim for Labor Code Violations pursuant to the Private Attorneys General Act (“PAGA”).

On July 29, 2022, Moving Defendant filed a motion to compel arbitration (the “Motion”) on the grounds that during his employment, Plaintiff signed a binding arbitration agreement (the “Arbitration Agreement”) that requires the adjudication of his individual claims. The Motion additionally seeks the dismissal of Plaintiff’s PAGA claim to the extent that it relates to Labor Code violations experienced by any person other than Plaintiff pursuant to Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 (“Viking River Cruises”) and to stay or dismiss the proceedings.

Plaintiff’s Request for Judicial Notice is GRANTED as to the existence of the exhibits but not to the truth of the matters stated therein.

The purpose of the Federal Arbitration Act (“FAA”) is to move the parties in an arbitrable dispute out of court and into arbitration as quickly and easily as possible. (Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 23.) The FAA is consistent with the federal policy to ensure the enforceability, according to their terms, of private agreements to arbitrate. (Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 57.) Under California Code of Civil Procedure (“CCP”) 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. (CCP § 1281.) California law, like federal law, favors enforcement of valid arbitration agreements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.) 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 unless grounds exist not to compel arbitration. (CCP § 1281.2.) Under California law, 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. (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 169.)

Notwithstanding the policy in favor of enforcing arbitration agreements, an arbitration agreement is tied to the underlying contract containing it and applies only where a dispute has its real source in the contract. (See Moritz v. Universal City Studios LLC (2020) 54 Cal.App.5th 238, 246.) A party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. (Id. at 245.)

In support of the Motion, Moving Defendant provides evidence of the Arbitration Agreement Plaintiff signed as a condition of his employment on October 27, 2020. (See Declaration of Claudia Rodriguez (“Rodriguez Decl.”), Exhibit 2.)

“I understand that this agreement requires me to pursue all claims I bring against the Company (and any third-party beneficiaries) through binding arbitration, and requires that the Company submit any claims it has against me to binding arbitration (except for those claims specifically excluded by this agreement). Our agreement to arbitrate includes any and all claims which arise out of the employment context or any other interaction/relationship we had, have or may have in the future. “

Under current applicable law, an employee's right to bring a representative claim

pursuant to the California Private Attorneys General Act ("PAGA") is unwaivable, and notwithstanding anything else in this agreement, this agreement does not purport to create any waiver of such right. Both the Company and I agree that any arbitration proceeding must move forward under the FAA (9 U.S.C. (§§ 3-4) even though the claims brought in court or otherwise may name, involve and/or relate to persons/entities who are not parties to the arbitration agreement and/or claims that are not subject to arbitration (such as PAGA).” (Id. at ¶ 10.)

The Court finds that Moving Defendant has provided sufficient evidence to demonstrate the existence of the Arbitration Agreement. Plaintiff does not dispute the existence or validity of the Arbitration Agreement but argues that it does not extend to PAGA claims based on its own terms.

The Court is persuaded by Plaintiff’s argument. In Viking River Cruises, the U.S. Supreme Court upheld the California rule that provisions in arbitration agreements providing for wholesale waivers of the right to bring PAGA actions are unenforceable as against public policy, but that the individualized claims in a plaintiff’s PAGA action could be severed and ordered to arbitration. (See Viking River Cruises, supra, 142 S.Ct. 1906, 1923-25.) Here, unlike in Viking River Cruises, the Arbitration Agreement does not purport to create a waiver of an employee’s right to bring a PAGA claim, and in fact, explicitly states that it does not create a waiver of the right. (See Rodriguez Decl., Exhibit A ¶ 10.) Furthermore, the Arbitration Agreement, which was executed in 2020, prior to the Viking River Cruises decision, specifically acknowledges that under the then-existing state of California law, the right to bring a PAGA action was unwaivable and that PAGA claims were not arbitrable. (See id.) By its own terms, the Arbitration Agreement excludes the arbitrability of PAGA claims in accordance with then-existing California law. The parties therefore did not agree to arbitrate PAGA claims.

As Plaintiff has not asserted causes of action outside of the PAGA claim, the Court DENIES the Motion.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative. If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org stating your intention to appear in person. The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date. This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court