Judge: Holly J. Fujie, Case: 23STCV28586, Date: 2024-06-06 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

Case Number: 23STCV28586    Hearing Date: June 6, 2024    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY: Defendant Stericycle Inc.

RESPONDING PARTY: Plaintiff, Marsalis Neal

            The Court has considered the moving papers.

BACKGROUND

On November 21, 2023, Plaintiff Marsalis Neal (“Plaintiff”) filed the operative complaint against Defendant Stericycle, Inc. alleging two causes of action for (1) Failure to Pay Regular Wages in Violation of Labor Code § 218.5 and (2) Failure to issue Accurate Wage Statements in Violation of labor Code § 226.

On February 28, 2024, Defendant filed the instant Motion to Compel Arbitration. No Opposition has been filed.

DISCUSSION

Defendant moves for an order compelling Plaintiff to arbitrate his claims against Defendant pursuant to the party's arbitration agreement and staying the action under the Federal Arbitration Act (9 U.S.C. § 1 et seq.), the California Arbitration Act (Code of Civil Procedure §§ 1281 et seq.

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.) 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, 971-72.) 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 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 to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for the revocation of the agreement.

(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. . . .”  (CCP §1281.2.)

Defendant provides the Court with a copy of the parties’ agreement to arbitrate (the “Agreement”). (Beezley Decl. at ¶ 14, Exhibit B.) Plaintiff did not dispute the validity of the Agreement. Therefore, the Court finds that a valid agreement exists between the parties to arbitrate.

Delegation Clause

The enforceability of an arbitration agreement is generally determined by the court.  (See Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 891; Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 781.)  However, parties may agree to arbitrate gateway questions of arbitrability such as the enforceability of an arbitration agreement and whether claims are covered by the arbitration agreement.  (See Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 68-69; Aanderud, supra, 13 Cal.App.5th at 891-92; Ajamian, supra, 203 Cal.App.4th at 781.)   “To establish this exception, it must be shown by ‘clear and unmistakable’ evidence that the parties intended to delegate the issue to the arbitrator.”  (Ajamian, supra, 203 Cal.App.4th at 781 (citing First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 944).)

“‘There are two prerequisites for a delegation clause to be effective.’”  (Aanderud, supra, 13 Cal.App.5th at 892 (quoting Tiri v. Lucky Changes, Inc. (2014) 226 Cal.App.4th 231, 242).)  “‘First, the language of the clause must be clear and unmistakable.’”  (Id.)  “‘Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability.’”  (Id.)

Defendant’s Senior Human Resources Compliance Manager, Amanda Beezley, provides the  Court with a copy of the parties’ Agreement. The Agreement states that,

except as this Agreement otherwise provides the Arbitrator, and not any court, shall have exclusive authority to resolve any dispute relating to the validity, applicability enforceability, unconscionability or waiver of this Agreement, including, but not limited to any claim that all or any part of this Agreement is void or voidable.

(Beezley Decl. at ¶ 14, Exhibit B at pp. 1-2.) Here, the provision provides the Court with clear and unmistakable language that the parties delegated the gateway question of arbitrability to the Arbitrator. The plaintiff notably did not file opposition, such that no argument that the delegation was either revoked or revocable. Therefore, the Court finds the requirements for the motion to compel arbitration to be satisfied.

Per the Agreement, the American Arbitration Association (“AAA”) will be the arbitration forum. Thus, the Court finds that the parties' dispute can be sufficiently arbitrated under CCP § 1281.6 through the AAA.

The Court further finds that a stay of the action is appropriate in this case once the motion is granted, as Code of Civil Procedure § 1281.4 stipulates that the Court shall stay the action until arbitration is completed. (Code Civ. Proc., § 1281.4.) Therefore, the Court GRANTS the Defendants’ Motion to Compel Arbitration and STAYS the proceeding pending a final resolution of Plaintiff’s claims through arbitration.  The Court sets a Status Conference re Arbitration for March 7, 2025 at 8:30 a.m.

Moving Parties are ordered to give notice of this ruling.      

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.

Dated this 7th day of June 2024