Judge Holly J. Fujie, Case Number: 24STCV09542, Date: 2024-11-13 Tentative Ruling

MOVING PARTY: Defendants Macy’s Retail Holdings, LLC and Macy’s, Inc. (collectively,

On April 16, 2024, Plaintiff filed the present complaint for civil penalties under the Private Attorneys General Act of 2004, Cal. Lab. Code § 2698 et seq., alleging Labor Code violations by Defendants.

On June 10, 2024, Plaintiff filed an application requesting the dismissal without prejudice of his alleged PAGA individual claim against Defendants and to proceed with litigating his PAGA representative claim.

On July 10, 2024, Defendants filed a Motion to Compel Arbitration of Plaintiff’s Individual Paga Claims and Stay Non-Individual Paga Claims. On July 11, 2024, the Court granted Plaintiff’s request to dismiss his individual PAGA claims. On August 8, 2024, Defendants then filed an Amended Motion to Compel Arbitration of Plaintiff’s Individual Paga Claims and the Dispute/Controversy of Whether Plaintiff is an Aggrieved Employee Under PAGA and to Stay Non-Individual Paga Claims (the “Motion”). Plaintiff filed an opposition to the Motion on October 30, 2024, and Defendants filed a reply to Plaintiff’s opposition on November 5, 2024.

1. Order dismissing Plaintiff’s individual PAGA claim against Defendants without

3. Order denying Defendant’s motion to compel arbitration of individual PAGA claim and stay representative action in Pass v. Del Amo Hospital, Inc., Case No. 24STCV03085, Los Angeles Superior Court (Exhibit C).

The Court GRANTS Plaintiff’s request as to Exhibits A and B, although unnecessary, as these are already part of the records of this case. As for Exhibit C, the Court takes judicial notice of its existence, but not of the truth of assertions within. (Evid. Code, § 452(c), (d); Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

Defendants object to and oppose Exhibit C to Plaintiff’s Request for Judicial Notice (“RJN”). Exhibit C to Plaintiff’s RJN pertains to an Order in Pass v. Del Amo Hospital, Inc. Case No. 24STCV03085, Los Angeles Superior Court. The Court merely takes judicial notice of its existence, not as to its contents or to the truth thereof.

“California law reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes. To further that policy, section 1281.2 requires a trial court to enforce a written arbitration agreement unless one of three limited exceptions applies. Those statutory exceptions arise where (1) a party waives the right to arbitration; (2) grounds exist for revoking the arbitration agreement; and (3) pending litigation with a third party creates the possibility of conflicting rulings on common factual or legal issues.” (Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967; Code Civ. Proc., § 1281.2.)

In deciding a petition to compel arbitration, trial courts must decide first whether an enforceable arbitration agreement exists between the parties, and then determine the second gateway issue whether the claims are covered within the scope of the agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.) The opposing party has the burden to establish any defense to enforcement. (Gatton v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 579 [“The petitioner, T–Mobile here, bears the burden of proving the existence of a valid arbitration agreement and the opposing party, plaintiffs here, bears the burden of proving any fact necessary to its defense.”].)

Procedurally, a petition to compel arbitration or stay proceedings must state verbatim the provisions providing for arbitration, or must have a copy of them attached. (Cal. R. Ct., rule 3.1330.)

“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, Defendants present evidence that on October 31, 2023, at the outset of his employment with Defendants, Sykes viewed and electronically signed the Solutions InSTORE New Hire Acknowledgement. (Declaration of Nicolas Moreau [“Moreau Decl.”, Exh. C; Declaration of Cynthia Ripak [“Ripak Decl.”], Exh. B.) By electronically signing the New Hire Acknowledgement, Sykes attested that:

I understand that if I do not opt out of Step 4 – Arbitration, any disputes or claims relating to my employment, other than those expressly excluded from arbitration in the Plan Document, will be resolved in individual arbitration as described in the brochure and Plan Document. I understand that individual arbitration continues to apply to such employment-related disputes even after my employment ends.

Sykes was informed about the Solutions InSTORE Program, the arbitration component of the Program (Step 4-Arbitration), and was notified, through a variety of means, of his right to opt out of arbitration by submitting an Election Form within thirty (30) days of his hire. (Ripak Decl., ¶ 17.) Sykes did not return an opt-out Election Form within thirty (30) days of his hire. (Ripak Decl., ¶ 29.)

Because Defendants have established the existence of a valid and binding arbitration agreement, the burden shifts to Plaintiff as the party opposing arbitration, to show why the agreement should not be enforced.

In his opposition, Plaintiff does not dispute that he entered into the arbitration agreement. Plaintiff contends, however, that the Motion should be denied as Defendants cannot compel to arbitration PAGA individual claims which currently do not exist in this action. Plaintiff also asserts that he has sufficiently alleged standing to prosecute representative PAGA claims under Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, which reversed an order striking a PAGA pleading for lack of an individual PAGA claim. Plaintiff thus contends that he cannot be compelled to arbitrate his non-individual claims.

Defendants argue, on the other hand, that although Plaintiff seeks only to prosecute non-individual PAGA claims, under Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1127 he must establish standing by proving that he worked for the alleged violator and personally sustained at least one Labor Code violation prior to litigating his non-individual claims. Defendants thus contend that Sykes must arbitrate the alleged individual Labor Code violations that he alleges make him an “aggrieved employee” under PAGA in order to provide him standing to pursue this PAGA action.

To have standing to bring a representative PAGA claim, a plaintiff need not also allege an individual PAGA cause of action. (Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, 538.) “The inability for an employee to pursue an individual PAGA claim does not prevent that employee from filing a representative PAGA action.” (Balderas, supra, 101 Cal.App.5th at 537.) Representative PAGA claims are not derivative or dependent on a plaintiff’s individual claim for relief. (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 86.) PAGA standing “does not depend on maintaining an individual Labor Code violation.” (Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 924, 930.)

As Adolph v. Uber Technologies, Inc. (2023) 14 Cal. 5th 1104, 1113 explicitly holds that an individual remedy is unnecessary to possess standing to pursue PAGA penalties, it necessarily follows that Plaintiff is not obligated to seek any individual remedy, in the form of any “individual” PAGA penalties, to possess standing to pursue PAGA penalties for fellow employees:

As Kim and Johnson make clear, a worker becomes an “aggrieved employee” with standing to litigate claims on behalf of fellow employees upon sustaining a Labor Code violation committed by his or her employer. (See Kim, supra, 9 Cal.5th at pp. 84–85, 259 Cal.Rptr.3d 769, 459 P.3d 1123; Johnson, supra, 66 Cal.App.5th at p. 930, 281 Cal.Rptr.3d 478; § 2699, subd. (c).) Standing under PAGA is not affected by enforcement of an agreement to adjudicate a plaintiff’s individual claim in another forum. Arbitrating a PAGA plaintiff’s individual claim does not nullify the fact of the violation or extinguish the plaintiff’s status as an aggrieved employee, any more than the time-barring of remedies did in Johnson or the settlement of the individual damages claims did in Kim. (See Kim, at pp. 84–85, 259 Cal.Rptr.3d 769, 459 P.3d 1123; Johnson, at p. 930, 281 Cal.Rptr.3d 478.) The operative complaint alleges that Adolph experienced Labor Code violations while driving for Uber. Under Kim, Adolph’s allegations that Labor Code violations were committed against him while he was employed by Uber suffice to confer standing to bring a PAGA action.

To establish standing in a PAGA action, plaintiff need only allege that he is “(1) someone who was employed by the alleged violator and (2) someone against whom one or more of the alleged violations was committed.” (Adolph, supra, 14 Cal.5th at 1120 (internal quotations omitted).) Despite Labor Code Section 2699’s language stating that an employee must bring an action on behalf of himself and other current employees, the California Supreme Court has declined to “impose additional” standing requirements because doing so would “thwart the Legislature's clear intent to deputize employees to pursue sanctions on the state’s behalf.” (Id. at 1120, 1122.)

Here, Plaintiff has sufficiently established standing. First, Plaintiff has alleged that he was employed by Defendants, which Defendants do not dispute, stating in the Complaint that “Plaintiff ROBERT SYKES worked for Defendants as a sales associate from October 19, 2023 to December 1, 2023.” (Complaint, ¶ 15.) Second, Plaintiff has alleged that he is someone against whom one or more of the alleged violations was committed, stating in the Complaint that “[t]hroughout Plaintiff’s employment, Defendants committed numerous labor code violations under state law” (Complaint, ¶¶ 15-32.) Thus, Plaintiff has standing to assert his non-individual PAGA claim.

Further, Viking River does not operate to divest Plaintiff of standing to pursue “non-individual” PAGA claims. Adolph rejected that contention under California State law. (Adolph, supra, 14 Cal.5th at 1119-1120.) While Viking River may stand for the proposition that Plaintiff must arbitrate an “individual” PAGA claim, so long as he chooses to assert one, nothing in Viking River gives any court the authority to force a plaintiff to arbitrate an individual claim that he or she elects not to pursue, to begin with.

In sum, Plaintiff has sufficiently established standing as an employee against whom one or more of the alleged violations were committed, and Plaintiff elects not to pursue an individual PAGA claim, instead seeking to recover only for the “non-individual” PAGA claim. Thus, there would be no individual claim to refer to arbitration. As such, Defendants’ argument that Plaintiff’s nonexistent individual claim must be arbitrated, fails.

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