Judge Holly J. Fujie, Case Number: 24STCV20870, Date: 2025-03-25 Tentative Ruling

MOVING PARTY: Defendants CVS Rx Services, Inc. and CVS Healthcare Practices of California (collectively, “Defendants”)

On August 16, 2024, Plaintiff filed a Complaint against Defendants and DOES 1 through 50, inclusive, for a sole cause of action for Violation of Labor Code § 2698, et seq.

On December 23, 2024, Defendants filed their Answer to the Complaint. On December 26, 2024, Defendants filed the instant Motion to Compel Arbitration (the “Motion”). On March 12, 2025, Plaintiff filed an Opposition to the Motion. On March 19, 2025, CVS Defendants filed a Reply.

Code of Civil Procedure Section 1281.2 authorizes the court to order arbitration of a case if it finds the parties agreed to arbitrate that dispute “and that a party to the agreement refuses to arbitrate that controversy.” Arbitration agreements should be liberally interpreted and ordered unless the agreement clearly does not apply to the dispute in question. (Weeks v. Crow (1980) 113 Cal.App.3d 350, 353; Segal v. Silberstein (2007) 156 Cal.App.4th 627, 633.) “ ‘Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.’ ” (California Correctional Peace Officers Assn. v. State¿(2006) 142 Cal.App.4th 198, 205.)

The party moving to compel arbitration has the initial burden to (1) affirmatively admit and allege the existence of a written arbitration agreement, and (2) prove the existence of that agreement by a preponderance of the evidence. (Rosenthal v. Great W. Fin. Sec. Corp, 14 Cal. 4th 394, 413.) Once this is met, the burden shifts to the responding party to prove that the agreement is unenforceable by a preponderance of the evidence. (Ibid.)

In establishing the existence of an agreement to arbitrate, it is sufficient for defendant to provide a copy of the arbitration agreement or state the paragraph verbatim. (Baker v. Italian Maple Holdings, LLC, 13 Cal.App.5th 1152, 1160 (2017); Cal. Rules of Court, Rule 3.1330.)

As a preliminary matter, the Court notes that the parties do not dispute that a valid arbitration agreement exists. (Mot. at 3:6-27; Opp. at 2:12-25.) However, Defendants move for an order compelling Plaintiff to arbitrate the claims asserted in the Complaint on the grounds that Plaintiff must establish that he individually suffered one or more Labor Code violations to have standing to bring representative PAGA claims. Essentially, Defendants contend the determination of whether Plaintiff individually suffered one or more Labor Code violations is an employment-related dispute covered under the arbitration agreement between the parties.

In opposition, Plaintiff raises two arguments against arbitration. First, Plaintiff argues that he cannot be compelled to arbitrate because only individual PAGA claims are subject to arbitration under the agreement and he has no individual PAGA claim asserted against CVS Defendants. Next, Plaintiff contends the arbitration agreement is unconscionable.

“Except as otherwise stated in this Agreement, Covered Claims are any and all claims, disputes or controversies that CVS may have, now or in the future, against You or that You may have, now or in the future, against CVS or one of its employees or agents, arising out of or related to Your employment with CVS or the termination of Your employment. Covered Claims include but are not limited to disputes regarding wages and other forms of compensation, hours of work, meal and rest break periods, seating, expense reimbursement, leaves of absence, harassment, discrimination, retaliation and termination arising under the Civil Rights Act of 1964, Americans With Disabilities Act, Age Discrimination in Employment Act, Family Medical Leave Act, Fair Labor Standards Act, Employee Retirement Income Security Act (“ERISA”), Genetic Information Non-Discrimination Act, and other federal, state and local statutes, regulations and other legal authorities relating to employment. Covered Claims also include disputes arising out of or relating to the validity, enforceability or breach of this Agreement, except as provided in paragraph 6, below, regarding the Class Action Waiver.”

“You and CVS agree to bring any Covered Claims in arbitration on an individual basis only; You and CVS waive any right or authority for any Covered Claims to be brought, heard or arbitrated as a class, collective, representative or private attorney general action. The Class Action Waiver does not apply to any claim you bring as a private attorney general solely on your own behalf and not on behalf of or regarding others. Notwithstanding any other provision of this Agreement or the AAA Rules, disputes regarding the validity, enforceability or breach of the Class Action Waiver will be resolved only by a civil court of competent jurisdiction and not by an arbitrator. If, despite this Class Action Waiver, You file or participate in a class, collective or representative action in any forum, You will not be retaliated against, disciplined or threatened with discipline. However, CVS will seek enforcement of this Agreement and the Class Action Waiver under the Federal Arbitration Act and seek dismissal of such class, collective or representative actions or claims.”

The Complaint alleges that Plaintiff was employed by Defendants from on or about October 1, 2014 until on or about August 18, 2023 as a District Support Pharmacist. (Compl., ¶¶1, 13.) Plaintiff seeks civil penalties against Defendants for Labor Code violations committed against all other Aggrieved Employees, not on his own behalf. (Id. at ¶¶4, 6, 15.) The Complaint further alleges that Plaintiff suffered at least one Labor Code violation as a result of Defendants’ policies and practices. (Id. at ¶5.) The Complaint also alleges that Plaintiff does not seek redress for any of his individual PAGA claims -- only for representative PAGA penalties, attorneys’ fees and costs. (Id.)

The Second District Court of Appeal’s recent decision in Leeper v. Shipt (2024) 107 Cal.App.5^th 1001 is controlling. In Leeper, the Court of Appeal held that as a matter of law, a representative PAGA cause of action necessarily alleges both an individual and a representative claim, even if it specifically states that it is not alleging an individual PAGA claim, and that the matter must be compelled to arbitration upon showing of a valid arbitration agreement. (Leeper at 1007-13.)

Therefore, the Court GRANTS Defendants’ Motion to Compel Arbitration and orders the matter stayed pending completion of arbitration. The Court sets a Status Conference re Status of Arbitration for December 24, 2025 at 8:30 a.m. The parties are ordered to submit a Joint Status Report at least seven (7) Court days before the Status Conference. If the Joint Status Reports states that the arbitration has not been held before that time, the Status Conference will be continued.

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