Judge: Maurice A. Leiter, Case: 22STCV26170, Date: 2023-03-10 Tentative Ruling
Case Number: 22STCV26170 Hearing Date: March 10, 2023 Dept: 54
Superior Court of California County of Los Angeles |
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Winston
Mar, |
Plaintiff, |
Case No.: |
22STCV26170 |
vs. |
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Tentative
Ruling |
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Lawrence
Perkins, et al., |
Defendants. |
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Hearing
Date: March 10, 2023
Department
54, Judge Maurice A. Leiter
Motion
to Compel Arbitration
Moving
Party: Defendants
SierraConstellation Partners, LLC and Lawrence Perkins
Responding
Party:
Plaintiff Winston Mar
T/R: DEFENDANTS’ MOTION TO COMPEL ARBITRATION IS DENIED.
DEFENDANTS TO NOTICE.
If the parties wish to submit on the tentative, please email
the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing
counsel (or self-represented party) before 8:00 am on the day of the hearing.
The Court considers the moving
papers, opposition, and reply.
BACKGROUND
On
August 12, 2022, Plaintiff Winston Mar filed a complaint against Defendants SierraConstellation
Partners, LLC and Lawrence Perkins, seeking a buyout of Plaintiff’s interest in
SCP under Corp. Code § 16405.
ANALYSIS
“On petition of a party to an arbitration agreement alleging the
existence of a written agreement to arbitrate a controversy and that a party
thereto refuses to arbitrate a controversy, the court shall order the
petitioner and the respondent to arbitrate the controversy if it determines
that an agreement to arbitrate the controversy exists….” (CCP § 1281.2.) The right to compel arbitration exists unless
the court finds that the right has been waived by a party’s conduct, other
grounds exist for revocation of the agreement, or where a pending court action
arising out of the same transaction creates the possibility of conflicting
rulings on a common issue of law or fact.
(CCP § 1281.2(a)-(c).) “The party
seeking arbitration bears the burden of proving the existence of an arbitration
agreement, and the party opposing arbitration bears the burden of proving any
defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle
Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)
Defendants move to compel
arbitration based on the arbitration agreement in the Employee Handbook. (Decl.
Waits, Exh. A.) Defendants assert that all employees are bound by the handbook
and arbitration agreement by virtue of continued employment with Defendants. The
agreement states, “WHETHER OR NOT I HAVE SIGNED A SEPARATE AGREEMENT TO
ARBITRATE, I UNDERSTAND THAT I HAVE AGREED THAT MY EMPLOYMENT WITH THE COMPANY
IS SUBJECT TO BINDING ARBITRATION…” (Id. at 68.)
After receiving the 2020
handbook, Plaintiff and Rebecca Waits, the Chief People Officer, had a
telephone conversation in which Plaintiff stated he would not sign the handbook
or arbitration agreement. (Decl. Waits ¶ 13.) Waits sent a follow-up email
stating Plaintiff is bound by the agreement by continuing to work for SCP.
Plaintiff responded, “Again, I am not signing this handbook. And will not be
bound by it. If you would like, please feel free to terminate me due to that.”
(Id., Exh. C.) Plaintiff remained employed at SCP for another 18 months. The
parties do not dispute these facts; the Court need not hold an evidentiary
hearing.
Defendants argue that the
parties have an “implied-in-fact” agreement to arbitrate because Plaintiff did
not quit working for Defendants after receiving the handbook. In support of
this argument, Defendants cite Harris v. TAP Worldwide, LLC (2016) 248
Cal.App.4th 373. The Court of Appeal in Harris found that the plaintiff
employee was bound by the arbitration agreement in the employee handbook by
acknowledging its receipt and beginning employment.
In opposition, Plaintiff
asserts that a mutual agreement to arbitrate does not exist. Plaintiff
expressly told Defendants he would not be bound by the employee handbook and
invited Defendants to terminate his employment if this was not agreeable to
them. Defendants did not terminate his employment.
As stated, Defendants have
the burden of establishing the existence of an arbitration agreement.
Defendants have not met that burden. Plaintiff clearly stated he did not agree
to arbitrate. He said Defendants could fire him for his refusal to be bound by
the employee handbook’s arbitration provision. Defendants did not fire him. Defendants
cite no authority holding that an employee handbook creates an implied-in-fact
contract despite the employee’s express statement he will not be bound by it.
Nor have Defendants shown that in the standoff presented here – the employer doesn’t
fire an employee who refuses to agree to arbitration, and the employee doesn’t
quit - the law deems the employee to have consented.
Defendants’ motion to compel
arbitration is DENIED.