Judge: Joseph Lipner, Case: 24STCV31180, Date: 2025-06-12 Tentative Ruling
Case Number: 24STCV31180 Hearing Date: June 12, 2025 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
ADAN HERNANDEZ MAURO, Plaintiff, v. PRIORITYWORKFORCE, INC., et al., Defendants. |
Case No:
24STCV31180 Hearing Date: June 12, 2025 Calendar Number: 7 |
Defendants Priority Workforce, Inc. (“Priority”); Priority
Business Services, Inc. (“PBS”); and Workforce Outsourcing, Inc. (“WOI”)
(collectively, “Moving Parties”) move for an order compelling Plaintiff Adan
Hernandez Mauro (“Plaintiff”) to arbitrate his claims against all defendants
and staying or dismissing this action. Defendant Le Pafe, Inc. dba Le Chef
Bakery (“Le Pafe”) joins the motion.
The Court DENIES the motion.
This is an employment case.
Plaintiff alleges that he was employed by Defendants.
Plaintiff alleges that he suffered a workplace injury and that Defendants
failed to accommodate his resulting medical condition, eventually terminating
him.
Moving Parties contend that they work together as a
temporary employment agency. Le Pafe is a bakery where Plaintiff allegedly
worked.
Plaintiff filed this action on November 25, 2024, raising
claims for (1) discrimination; (2) retaliation under FEHA; (3) failure to
prevent discrimination and retaliation; (4) failure to provide reasonable
accommodations; (5) failure to engage in a good faith interactive process; (6)
violation of CFRA; (7) wrongful termination in violation of public policy; and
(8) declaratory judgment.
On April 29, 2025, Moving Parties moved to compel
arbitration. Le Pafe joined on May 5, 2025. Plaintiff filed an opposition on
May 30, 2025. On June 5, 2025, Moving Parties filed a reply and Le Pafe filed a
separate reply.
The Court has reviewed the parties’ evidentiary objections
and rules as follows.
Alvarez Declaration: The Court sustains objections 4
(foundation) and 5 (foundation). Alvarez does not present foundation for her
assertions that Priority presented Plaintiff with the Agreement or that the
Agreement was presented as part of an onboarding process with Priority, PBS, or
WOI – in fact, the Agreement contains no mention of Priority, PBS, or WOI by
name, and instead mentions other companies. Although Moving Parties argue that
the Agreement is a business record, the business record rule is an exception to
the hearsay rule (see Ev. Code, § 1271), and does not eliminate the
requirement to establish foundation.
The Court overrules the remaining objections.
Panosian Declaration: The Court overrules Moving Parties’
objections.
Hernandez Declaration (Spanish): The Court sustains Moving
Parties’ objection on the grounds that Plaintiff does not provide a certified
translation.
Hernandez Declaration (English): It is not clear whether
this declaration is a translation of the Spanish declaration. If it is, it
requires a certified translation. The Court requests that Plaintiff explain the
nature of the two Hernandez declarations.
Under both the
Federal Arbitration Act (“FAA”) 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.)
The party moving to
compel arbitration must establish the existence of a written arbitration
agreement between the parties. (Code of Civ. Proc., § 1281.2.) In ruling on a
motion to compel arbitration, the court must first determine whether the
parties actually agreed to arbitrate the dispute, and general principles of
California contract law help guide the court in making this determination. (Mendez v. Mid-Wilshire Health Care Center
(2013) 220 Cal.App.4th 534, 541.)
“A petition to
compel arbitration or to stay proceedings pursuant to Code of Civil Procedure
sections 1281.2 and 1281.4 must state, in addition to other required
allegations, the provisions of the written agreement and the paragraph that
provides for arbitration. The provisions must be stated verbatim or a copy must
be physically or electronically attached to the petition and incorporated by
reference” (Cal. Rules of Court, 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. Once such a document is presented to the
court, the burden shifts to the party opposing the motion to compel, who may
present any challenges to the enforcement of the agreement and evidence in
support of those challenges.” (Baker v.
Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160 [internal
citations omitted].)
Moving Parties provide evidence of an arbitration agreement (the
“Agreement”) signed by Plaintiff. (Alvarez Decl., Ex. D; Flores Decl., Ex. B.)
The original agreement is in Spanish; Moving Parties provide a certified
translation attached to the Flores declaration as Exhibit B.
The Agreement is between Plaintiff, SouthEast Personnel
Leasing, Inc. and SouthEast Employee Leasing Services, Inc. (collectively with
SouthEast Personnel Leasing, Inc., “SPLI”), Plaintiff’s “Workplace Employer”,
and Plaintiff’s “Temporary Employment Agency”. (Flores Decl., Ex. B at p. 1.) The
Agreement does not define the terms “Workplace Employer” or “Temporary
Employment Agency”. (Flores Decl., Ex. B at p. 1.) The Agreement also applies
to SPLI’s respective owners, directors, officers, directors, employees, agents,
subsidiaries, and the parties affiliated with employee health and benefit plans.
(Flores Decl., Ex. B at p. 1.)
At the bottom of the original Spanish copy, there is a
signature that appear to be Plaintiff’s. (Alvarez Decl., Ex. D at p. 2.) Below
the signature and date lines, there is a line for the “Name of the Company”,
where the name “JSL” is written. (Alvarez Decl., Ex. D at p. 2; Flores Decl.,
Ex. B at p. 2.)
“Generally speaking, one must be a party to an arbitration
agreement to be bound by it or invoke it.” (Westra v. Marcus & Millichap
Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759,
763.)
The
record does not establish that Moving Parties are parties to the Agreement. None
of defendants in this case are signatories to the Agreement. None of the
defendants are mentioned by name in the Agreement.
SPLI is not and never was a Defendant in this action.
Plaintiff does not allege to have worked for, or entered into any agreement
with SPLI. Nor do Moving Parties explain who SPLI is or where SPLI fits into
the ecosystem with the actual defendants in this case.
“JSL” is a more familiar name.
JSL Foods, Inc. (“JSL”) was previously a defendant in this case, and was
represented by counsel for Moving Parties. On February 27, 2025, counsel for
JSL and Moving Parties sent Plaintiff’s counsel a letter taking the position
that Plaintiff’s claims against JSL were time-barred and that there was no
alter ego relationship between JSL and Priority or Le Chef. (Panosian Decl.,
Ex. 1.) The letter requested that Plaintiff dismiss JSL from this action. On
May 5, 2025, JSL was dismissed without prejudice pursuant to a stipulation
between Plaintiff and JSL.
This
leaves an initial state where it is unclear why the Moving Parties or Le Pafe
are entitled to enforce the Agreement. The Court now proceeds to address Moving
Parties’ arguments as to why they should be permitted to compel arbitration.
Moving Parties argue that, although they are not named in
the Agreement, they are nevertheless parties to it. Moving Defendants
(Priority, PBS, and WOI) argue that they are “Temporary Employment Agenc[ies]”
and Le Pafe argues that it is a “Workplace Employer”.
Crystal Alvarez, Priority’s Employment Development Manager,
declares that “[t]he worksite clients where workers are placed by [Priority],
PBS and/or WOI are commonly referred to as the ‘Worksite Employer’ or the ‘Workplace
Employer,’ while [Priority] and its related entities are often referred to as
the ‘Temporary Employment Agency.’ The terms ‘Worksite Employer’ and ‘Workplace
Employer’ are used interchangeably.” (Alvarez Decl. ¶ 5.)
But even assuming that Moving Parties do typically
use those terms to refer to themselves, it does not follow that they are
Temporary Employment Agencies or Workplace Employers within the meaning of the Agreement.
As discussed above, the Agreement appears to have been drafted by SPLI, and no
one in this case has explained who SPLI is or what relation, if any, it has to
Defendants. The fact that Temporary Employment Agency and Workplace Employer
are capitalized in the Agreement suggests that they are not simply referring to
every entity in the world that can be fairly characterized as a temporary
employment agency or workplace employer. The fact that Moving Parties
incidentally refer to themselves in terms that also appear in the Agreement is
not an adequate basis for the Court to conclude that the Agreement must be
talking about them, and not any other temporary employment agency.
The Court does not find that Moving Parties or Le Pafe have
demonstrated that they are parties to the Agreement.
Next, Moving Parties argue
that they are entitled to compel arbitration as alleged alter egos, agents, or
joint employers.
California courts do not find
“any persuasive reason why a nonsignatory should be precluded from compelling
arbitration if sued as a signatory's alter ego. Indeed, while an agent is one
who acts on behalf of a corporation, an alter ego is one who,
effectively, is the corporation. By suing [nonsignatories]
for breach of [a contract] on the ground that they are [the signatory’s] alter
egos, and even alleging in the complaint that [the nonsignatories] entered into
the [contract], [the nonsignatories] are ‘entitled to the benefit of the
arbitration provisions.’ ” (Rowe v. Exline (2007) 153 Cal.App.4th 1276,
1285.)
Similarly, “when a plaintiff
alleges a defendant acted as an agent of a party to an arbitration agreement,
the defendant may enforce the agreement even though the defendant is not a
party thereto.” (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614; see
also Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 788 [joint employer
allegations trigger agency exception].)
Plaintiff alleges that “Defendants,
and each of them, were the agents, employees, managing agents, supervisors, coconspirators,
parent corporation, joint employers, alter ego, and/or joint ventures of the
other Defendants, and each of them, and in doing the things alleged herein,
were acting at least in part within the course and scope of said agency,
employment, conspiracy, joint employer, alter ego status, and/or joint venture
and with the permission and consent of each of the other Defendants.”
(Complaint ¶ 14.)
Here, there is only one
signatory who has ever been a Defendant – JSL. As mentioned above, JSL was
dismissed after counsel for JSL and Moving Parties sent Plaintiff’s counsel a
letter taking the position that Plaintiff’s claims against JSL were time-barred
and that there was no alter ego relationship between JSL and Priority or Le
Chef. (Panosian Decl., Ex. 1.)
In the letter, counsel for
JSL and Moving Parties wrote “There Is No Alter Ego Between JSL and
Priority/[Le Pafe] …. Indeed, none of the [alter ego]
factors could be met here. JSL is an entirely separate entity from Priority and
[Le Pafe]. …. In short, Plaintiff will be entirely unable to establish any
relation between the JSL and Priority and even less so between JSL and [Le Pafe].
…. It is abundantly clear that Plaintiff cannot hold JSL liable for any of the
asserted claims because none of the alleged facts implicate JSL[.]” (Panosian
Decl., Ex. 1 at pp. 2-3 [emphasis in original].)
Unlike in Rowe, Westlake,
and Garcia, here Plaintiff is not maintaining an action against JSL –
JSL has been dismissed. Not only that, JSL was dismissed after its shared
counsel with Moving Parties made unambiguous representations that JSL has no
connection with Moving Parties or Le Pafe.
Either JSL is an alter ego of
the other defendants, or it is not. The consensus among the parties appears to
be that it is not. The Court will not disturb that consensus on the mere basis
that Plaintiff has not formally amended out the alter ego allegations against
JSL that he clearly no longer stands by. The alter ego and agency exceptions
are intended to prevent absurdities, not enable them.
The Court does not find that
alleged alter ego or agency are a basis to allow the nonsignatories to enforce
the Agreement.
For a third party to be able to enforce a contract, three
factors must be established: (1) the third party would in fact benefit from the
contract; (2) a motivating purpose of the contracting parties was to provide a
benefit to the third party; and (3) permitting the third party to bring its own
breach of contract action against a contracting party is consistent with the
objectives of the contract and reasonable expectations of the third parties. (Goonewardene
v. ADP, LLC¿(2019) 6 Cal.5th 817, 830.)
Whether the third party is an intended beneficiary or merely
an incidental beneficiary involves construction of the intention of the
parties, gathered from reading the contract as a whole in light of the
circumstances under which it was entered. (Cione v. Foresters Equity
Services, Inc. (1997) 58 Cal.App.4th 625, 636.) It is not necessary that
the beneficiary be named or identified as an individual. (Ronay Family
Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 838.)
Where the language of a contract is clear and explicit, and
does not involve an absurdity, the plain meaning governs. (West Pueblo Partners,
LLC v. Stone Brewing Co., LLC (2023) 90 Cal.App.5th 1179, 1185, citing Civ.
Code, § 1638.)
The first factor is met because Moving Parties and Le Pafe
would benefit from being able to compel arbitration.
The second element is not met. As discussed above, nothing
about the Agreement indicates that Moving Parties or Le Pafe were even
considered when Plaintiff, SPLI, and JSL entered the Agreement. Nor have Moving
Parties introduced extrinsic evidence suggesting that SPLI, JSL, Plaintiff
entered into the Agreement with Moving Parties and Le Pafe in mind. Indeed,
representations by defense counsel for Moving Parties and for JSL indicate that
JSL has no relation to Moving Parties or to Le Pafe.
As a result, the third agreement is not met either. There is
no evidence showing that Plaintiff or SPLI expected, reasonably or otherwise,
that Moving Parties and Le Pafe would seek to invoke the Agreement to their
benefit.
The
third-party beneficiary doctrine is therefore not a basis to allow the
nonsignatories to enforce the Agreement.
“ ‘There are exceptions to
the general rule that a nonsignatory to an agreement cannot be compelled to
arbitrate and cannot invoke an agreement to arbitrate, without being a party to
the arbitration agreement.’ [Citation.] One pertinent exception is based on the
doctrine of equitable estoppel. [Citations.] Under that doctrine, as applied in
‘both federal and California decisional authority, a nonsignatory defendant may
invoke an arbitration clause to compel a signatory plaintiff to arbitrate its
claims when the causes of action against the nonsignatory are “intimately
founded in and intertwined” with the underlying contract obligations.’ ” (Molecular
Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th
696, 706.)
Here, Plaintiff’s claims against Moving Parties and Le Pafe
are not ‘intimately intertwined’ with Plaintiff’s claims against JSL because,
as discussed above, Plaintiff no longer has claims against JSL. Further,
Plaintiff dismissed JSL in reliance on representations from counsel for JSL and
Moving Parties that JSL is entirely unrelated to Moving Parties and Le Pafe and
does not have any viable claims against it. It would be inequitable to treat
JSL as a constructive defendant only for the purposes of compelling arbitration
when no party contends that JSL is a proper defendant in this action.
Equitable estoppel is therefore not a basis to allow the
nonsignatories to enforce the Agreement.
Moving Parties and Le Pafe have not established a basis on
which they can enforce the Agreement to compel Plaintiff to arbitrate his
claims against them.
The Court therefore denies the motion to compel arbitration.