Judge: Kevin C. Brazile, Case: 20STCV39172, Date: 2023-03-13 Tentative Ruling

Case Number: 20STCV39172    Hearing Date: March 13, 2023    Dept: 20

Tentative Ruling

Judge Kevin C. Brazile

Hearing Date:                         Monday, March 13, 2023

Case Name:                             Tashavea Walker v. Barrett Business Services, Inc., et al.

Case No.:                                20STCV39172

Motion:                                  Motion to Compel Arbitration and Dismiss Action

Moving Party:                         [Defendant] – Barrett Business Services, Inc., a Maryland Corporation

                                                [Defendant] – Team Holdings, Inc., a California Corporation

Responding Party:                  None

Notice:                                    OK

Ruling:                                    The Motion to Compel Arbitration and Dismiss Action is  GRANTED.

Defendant to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.

BACKGROUND

This case is an enforcement action under the Private Attorneys General Act of 2004 (“PAGA”). (Complaint, ¶ 1). Defendant Barrett Business Services, Inc., is a temporary staffing services company and Defendant Performance Team Holdings Inc. is a holding company in California (collectively, “Defendants”). Tashavea Walker (“Plaintiff”) was hired and assigned by Defendant Barrett Business to perform work at one of Defendant Performance Team’s facilities in December 2017. (Complaint, ¶ 9 and Declaration of Michael Clark in Support of Defendant’s Joint Motion to Compel Arbitration and Dismiss ¶ 3, hereinafter, “Clark Dec.”). During her employment, Plaintiff alleges several violations of the California Labor Code including: failure to pay for all hours worked (Complaint, ¶ 21), failure to provide compliant meal breaks (Ibid. at ¶ 27), failure to provide compliant rest breaks (Ibid. at ¶ 29), failure to pay wages due at termination of employment (Ibid. at ¶ 35), failure to minimize excessive indoor heat (Ibid. at ¶ 39), and failure to reimburse expenses (Ibid. at ¶ 41).

Plaintiff, pursuant to California Labor Code § 2699.3, was required to notify the Labor and Workforce Development Agency (LWDA) and wait for notice whether LWDA would investigate the alleged violations. If no such notice is provided within 65 calendar days of the postmark date of the letter, Plaintiff may commence the civil action pursuant to § 2699. (California Labor Code § 2699.3(2)(A)). Plaintiff complied with said requirements and filed this action with the Court on October 9, 2020.

Defendants filed the instant Motion to Compel Arbitration and Dismiss Action on August 15, 2022. To date, the Court has not received opposition papers from Plaintiff. Opposition papers were due from Plaintiff on February 28, 2023.         

DISCUSSION

Applicable Law

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.) The party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties. (Code of Civ. Proc. § 1281.2.) This is usually done by presenting a copy of the signed, written agreement to the court.

“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.) The moving party must also establish the other party’s refusal to arbitrate the controversy. (Code of Civ. Proc. § 1281.2.) The filing of a lawsuit against the moving party for a controversy clearly within the scope of the arbitration agreement affirmatively establishes the other party’s refusal to arbitrate the controversy. (Hyundai Amco America, Inc. v. S3H, Inc. (2014) 232 Cal.App.4th 572, 577.)

Application to Facts

A motion to compel has three essential requirements: (1) establish the existence of a written arbitration agreement between the parties, (2) state the provisions of the written agreement that provides for arbitration, and (3) establish the opposing party’s refusal to arbitrate.

Here, Defendant meets all three requirements. First, Defendant submits a copy of the arbitration agreement electronically signed by Plaintiff. (Clark Dec., Exh. A). Second, the copy attached contains the provisions that provide for arbitration:

“Employee and BBSI ("the Company"), agree to utilize binding arbitration as the sole and exclusive means to resolve all disputes that may arise between them, including but not limited to disputes regarding termination of employment and compensation. Employee specifically waives and relinquishes his/her right to bring a claim against the Company, in a court of law, and this waiver shall be equally binding on any person who represents or seeks to represent Employee in a lawsuit against the Company in a court of law.” (Ibid.)

Finally, the lawsuit was initiated via the Complaint filed by Plaintiff against Defendant for controversies that are well within the scope of the arbitration agreement. (See Complaint ¶ 54(a) – 54(g) for violations regarding compensation and failure to provide proper rest periods).

Because Plaintiff brought her action under PAGA, the Court’s analysis must address whether any non-individual claim may go forward.

The legal standard for this issue has been recently decided by the Supreme Court of the United States in the case of Viking River Cruises v. Moriana (2022) 142 S. Ct. 1906 which abrogated Iskanian v. CLS Transportation Los Angeles, LLC (2014) 173 Cal.Rptr.3d 289. In Iskanian, an employee brought a putative class action against their employer for wage and hour violations. The Supreme Court of California held that (1) a waiver of the employee’s right to representative action under PAGA violated public policy; and (2) individual and non-individual claims are not divisible. According to Viking River Cruises, the Iskanian opinion correctly decided a PAGA waiver is unenforceable as to non-individual claims, without any FAA preemption, but arbitration can be compelled as to individual plaintiffs’ waived claims, and the remaining claims of representative actions should be dismissed, due to lack of standing upon plaintiffs’ removal from the action and into arbitration. (Viking River Cruises, supra at1924-25).

Here, Viking River mandates that the claims must be divisible. If not, this would either (a) force all claims to go through arbitration, including claims that a party did not agree to arbitrate, or (b) force all claims to go through the court system instead of an alternative avenue of dispute resolution as the parties had contracted.

Forcing all claims to go through arbitration disrupts the foundational principle of arbitration. “The most basic corollary of the principle that arbitration is a matter of consent is that “a party can be forced to arbitrate only those issues it specifically has agreed to submit to arbitration,” (Id. at 1923).

On the other hand, if all claims are forced through the courts, “The effect of Iskanian’s rule mandating this mechanism is to coerce parties into withholding PAGA claims from arbitration.” “As a result, Iskanian’s indivisibility rule effectively coerces parties to opt for a judicial forum rather than “forgo[ing] the procedural rigor and appellate review of the courts in order to realize the benefits of private dispute resolution…This result is incompatible with the FAA.” (Viking River, supra at 1924).   

Here, where the parties have specifically agreed to arbitrate their disputes between “Employee and BBSI”, Plaintiff’s individual claims fall within both the scope of the arbitration agreement and Viking’s holding. Therefore, Plaintiff’s individual claims must be arbitrated.

As for Plaintiff’s non-individual claims, there is nothing in the instant arbitration agreement that precludes Plaintiff from bringing them, But there is the issue of standing. “PAGA provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding. Under PAGA's standing requirement, a plaintiff can maintain non-individual PAGA claims in an action only by virtue of also maintaining an individual claim in that action. See Cal. Lab. Code Ann. §§ 2699(a), (c). When an employee's own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit.” (Id. at 1925). Plaintiff fails to oppose the motion and offer any arguments on the issue of standing.

Therefore, the non-individual claims within Plaintiff’s Complaint shall be dismissed for lack of standing.

Request for Judicial Notice

The Court grants the request for judicial notice of for the Joint Appendix in Viking River Cruises, Inc. v. Moriana, No. 20-1573, (June 15, 2022) pursuant to California Evidence Code § 452(d)(1).

CONCLUSION

Accordingly, Defendants’ Motion to Compel Arbitration and Dismiss Action is GRANTED. The request to compel arbitration is GRANTED as to Plaintiff’s individually asserted claims. The request for dismissal is GRANTED as to Plaintiff’s representative claims due to lack of standing.

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.