Judge: Laura A. Seigle, Case: 23STCV17943, Date: 2024-04-11 Tentative Ruling
Case Number: 23STCV17943 Hearing Date: April 11, 2024 Dept: 17
[TENTATIVE] ORDER RE MOTION TO COMPEL ARBITRATION
On July 31, 2023 Plaintiff Brenda
Hernandez Alvarenga filed a putative wage and hour class action against Defendant
ASGA Inc. stating claims for (1) failure to pay overtime wages, (2) failure to
pay minimum wages, (3) failure to provide meal breaks, (4) failure to provide
rest breaks, (5) failure to maintain records and provide accurate itemized wage
statements, (6) failure to pay wages on termination or resignation, (7) failure
to reimburse business expenses, (8) failure to allow inspection of employment
records, and (9) unfair competition in violation of the Unfair Competition Law,
Business & Professions Code, sections 17200 et seq (UCL). ASGA moves to
compel arbitration of Plaintiff’s individual claims, dismiss her class claims,
and stay the case pending arbitration.
A. Judicial Notice
Plaintiff requests judicial notice
be taken of (1) the American Arbitration Association (AAA) Supplementary Rules
for Class Arbitration (Ex. 1), (2) the American Heritage Dictionary definition
of "bilateral" (Ex. 2), and (3) the American Heritage Dictionary
definition of "between" (Ex. 3).
Defendant requests judicial notice be taken of the AAA Employment
Arbitration Rules & Procedures effective November 1, 2009. The request for judicial notice is granted as
to the AAA Employment Rules and AAA Supplementary Rules but denied as to the
dictionary definitions because they are relevant only to Plaintiff’s arguments
that classwide arbitration is permitted.
Those arguments are not reached below because the permissibility of
classwide arbitration is delegated to the arbitrator, as discussed below.
B. Arbitration Agreement
Code of Civil Procedure section 1281
states, “A written agreement to submit to arbitration an existing controversy
or a controversy thereafter existing is valid, enforceable, and irrevocable,
save upon such grounds as exist for the revocation of any contract.” Section 1281.2 provides that upon petition of
a party to an arbitration agreement alleging the existence of a written
agreement to arbitrate and a party’s refusal to submit to arbitration, the
court shall order the parties to arbitrate the controversy if it determines
that an agreement exists, unless it determines that the right to arbitrate has
been waived, that grounds exist for revocation, or that a party to the
agreement is also party to a pending litigation arising out of the same facts
and there exists a possibility of conflicting rulings on a common issue of fact
or law.”
When a petition to compel
arbitration is “filed and accompanied by prima facie evidence of a written
agreement to arbitrate the controversy, the court itself determine[s] whether
the agreement exists and, if any defense to its enforcement is raised, whether
it is enforceable.” (Rosenthal v.
Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) “The moving party bears the burden of proving
[the agreement’s] existence by a preponderance of the evidence.” (Gamboa v. Northeast Community Clinic
(2021) 72 Cal.App.5th 158, 165-166 [Gamboa].)
“The moving party ‘can meet its
initial burden by attaching . . . a copy of the arbitration agreement
purporting to bear the [opposing party's] signature’” or “by setting forth the
agreement's provisions in the motion.” (Ibid.) Defendant carried this burden by attaching an
arbitration agreement purportedly bearing Plaintiff’s handwritten
signature. (Reynolds Decl., Ex. A.)
“If the moving party meets its
initial prima facie burden and the opposing party disputes the agreement, then
in the second step, the opposing party bears the burden of producing evidence
to challenge the authenticity of the agreement.” (Gamboa, supra, 72 Cal.App.5th at
165.) This burden can be carried “in
several ways,” e.g., by “declar[ing] under penalty of perjury that the party
never saw or does not remember seeing the agreement, or that the party never
signed or does not remember signing the agreement.” (Ibid.)
Defendant submits the declaration
of Corinne Reynolds that she is "responsible for overseeing and
facilitating the applicant onboarding for Defendant's new hires" and
describes Defendant's onboarding policy.
(Reynolds Decl., ¶ 2.)
Defendant's practice during Plaintiff's employment was to
"provide[] a hardcopy of the onboarding documents to its new hires"
and allow employees "to take the packet with them and bring back the
signed documents." (Id. at ¶
4.) Plaintiff was provided the
arbitration agreement and voluntarily signed it on February 7, 2022. (Id. at ¶¶ 5-6.) Although the arbitration agreement bears the
name "Brenda Gonzalez," Reynolds declares Plaintiff notified
Defendant of her name change to Brenda Hernandez Alvarenga during her
employment and after signing the arbitration agreement. (Id. at ¶ 3, Ex. B).
Plaintiff does not dispute the
authenticity of her signature or otherwise challenge the existence of the
agreement. Moreover, Plaintiff does not
dispute that the individual claims are within the scope of the arbitration
agreement. Nor does Plaintiff contend
the agreement is unconscionable or dispute Defendant’s evidence on that issue.
Plaintiff raises the issue of
whether the FAA applies, arguing it does not.
Defendant did not argue and did not show that the FAA applies here.
C. Labor Code Section 229
Plaintiff argues that Labor Code
section 229 makes her claims non-arbitrable.
That section states, except in cases involving collective bargaining
agreements, any “[a]ctions to enforce the provisions of this article [sections
200-244] for the collection of due and unpaid wages claimed by an individual
may be maintained without regard to the existence of any private agreement to
arbitrate.” (Opposition at p. 1.)
Plaintiff's first, second, seventh,
eighth, and ninth causes of action are expressly not brought under Labor Code
sections 200 to 244. The first cause of
action alleges violations of Labor Code sections 510, 511, 558, and 1194.3, and
Wage Order 4. (Complaint at p. 12.) The second cause of action alleges violations
of Labor Code sections 1194, 1197, 1197.1, 1198, and 119, and Wage Order
4. (Complaint at p. 14.) The seventh cause of action alleges violation
of Labor Code section 2802. (Complaint
at p. 22.) The eighth cause of action
alleges violations of Labor Code section 1198.5 and Wage Order No. 4. (Complain at p. 23.) The ninth cause of action alleges violations
of Business & Professions Code section 17200. (Complaint at p. 25.)
Plaintiff alleges the third,
fourth, fifth, and sixth causes of action under Labor Code sections 200 to 244. The third cause of action alleges violations
of Labor Code sections 226.7 and 512 and Wage Order No. 4. (Complaint at p. 16.) The fourth cause of action alleges violations
of Labor Code section 226.7 and Wage Order No. 4. (Complaint at p. 19.) The fifth cause of action alleges violation
of Labor Code section 226. (Complaint at
p. 20.) The sixth cause of action
alleges violation of Labor Code sections 201, 202, and 203. (Complaint at p. 21.) But not all of these causes of action seek
“collection of due and unpaid wages.”
The third and fourth causes of
action under section 226.7 are for failure to provide timely meal and rest periods
and to pay for the missed meal and rest periods. (Complaint, ¶¶ 77, 81, 89.) However, “a section 226.7 claim is not an
action brought for nonpayment of wages; it is an action brought for
nonprovision of meal or rest breaks.” (Kirby
v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1256-57; see also Lane
v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 684 [“action
under section 226.7 “is not, in fact, an action for the ‘collection of due and
unpaid wages,’ but one for a failure to provide mandated meal or rest breaks”].)
The fifth cause of action seeks
penalties for failures to provide accurate wage statements and maintain records. (Complaint, ¶ 96.) A claim for failure to provide itemized wage
statements is not a cause of action seeking to collect due and unpaid
wages. (Lane, supra, 224
Cal.App.4th at p. 684.)
The sixth cause of action seeks
penalties for failure to timely pay wages, known as “waiting time penalties.” (Complaint, ¶ 106; Lane, supra, 224
Cal.App.4th at p. 680.) A cause of
action for waiting time penalties is not an action seeking to collect due and
unpaid wages. (Id. at p.
684.)
Because none of the claims are
brought “to enforce the provisions of [sections 200-244] for the collection of
due and unpaid wages,” they are not subject to section 229’s prohibition
against arbitration.
D. Class Arbitration Availability
Next, Plaintiff argues the
arbitrator rather than the court must decide whether the parties’ agreement
permits class arbitration. (Opposition
at pp. 2-3.) There is “no universal rule”
allocating the decision on the availability of classwide arbitration to either
arbitrators or courts. (Sandquist v.
Lebo Automotive, Inc. (2016) 1 Cal.5th 233, 241.) “Rather, who decides is in the first instance
a matter of agreement, with the parties' agreement subject to interpretation
under state contract law.” (Ibid.) When an agreement prepared by the employer comprehensively
requires arbitration of “any claim, dispute, and/or controversy . . which would
otherwise require or allow resort to any court or other governmental dispute
resolution forum, between [me/myself] and the Company,” that agreement allocates
“the decision on the availability of class arbitration to the arbitrator,
rather than reserving it for a court.” (Id.
at pp. 245-246, 248.)
The court in Nguyen v. Applied
Medical Resources Corp. (2016) 4 Cal.App.5th 232, applied the reasoning of Sandquist
in addressing a provision requiring arbitration of “all disputes and claims
arising out of or relating to the submission of this application” and “all
disputes . . . which might arise out of or relate to my employment with the
company.” (Id. at pp.
259-260.) The court concluded that this
arbitration provision was similar to that in Sandquist and therefore,
“the decision regarding whether class arbitration is available was one that
should have been made by the arbitrator in the first instance.” (Id. at pp. 260-261; see also Muller
v. Roy Miller Freight Lines, LLC (2019) [agreement that “arbitrator must
resolve ‘all disputes’” means “the arbitrator must resolve issues of class
arbitrability”].)
Here the arbitration agreement
states, “To the fullest extent allowed by law, any controversy, claim or
dispute between Employee and the Company . . . relating to or arising out of
Employee’s employment . . . will be submitted to final and binding arbitration
. . .” (Defendant’s Ex. A at ¶ 2.) This language is similar to the comprehensive
provisions in Sandquist and Nguyen that allocated to the
arbitrator the issue of whether the arbitration agreement allows class arbitration.
The parties focus on the AAA rules,
which AAA rules apply here, and whether the AAA rules state that the arbitrator
decides whether class arbitration can occur.
Given the caselaw cited above, there is no need to decide these
questions about AAA rules. Under the
broad arbitration provision in the parties’ agreement, the decision about whether
the agreement permits class arbitration is for the arbitrator.
E. Stay
Defendant requests the court
“dismiss all claims” because “all of Plaintiff’s individual claims are subject
to arbitration.” Once “a court of competent jurisdiction . . . has ordered
arbitration of a controversy which is an issue involved in an action or
proceeding pending before a court of this State, the court in which such action
or proceeding is pending shall, upon motion of a party to such action or
proceeding, stay the action or proceeding until an arbitration is had in
accordance with the order to arbitrate or until such earlier time as the court
specifies.” (Code Civ. Proc., §
1281.4.) Pursuant to section 1281.4, the
court will stay this action pending the arbitration.
Defendant’s Motion to Compel
Arbitration is GRANTED. The action is STAYED
pending arbitration. A post-arbitration
status conference is set for September 11, 2024 at 9:00 a.m. in Spring Street
Courthouse, Department 17.