Judge: Melvin D. Sandvig, Case: 21CHCV00900, Date: 2023-01-20 Tentative Ruling

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Case Number: 21CHCV00900    Hearing Date: January 20, 2023    Dept: F47

Dept. F47

Date: 1/20/23

Case #21CHCV00900

 

MOTION TO COMPEL ARBITRATION

 

Motion filed on 7/29/22.

 

MOVING PARTY: Defendants Brightview Landscapes, LLC and Brightview Landscape Services, Inc.

RESPONDING PARTY: Plaintiff Ryan Soto

NOTICE: ok

 

RELIEF REQUESTED: An order compelling Plaintiff Ryan Soto to arbitrate his individual PAGA claim and for an order dismissing Plaintiff’s non-individual PAGA claim.  Additionally, Defendants Brightview Landscapes, LLC and Brightview Landscape Services, Inc. move for an order staying this action until the issue of whether arbitration is compelled is determined.

 

RULING: The motion is granted, in part, and denied, in part, as set forth below. 

 

SUMMARY OF FACTS & PROCEDURAL HISTORY

 

This action arises out of Plaintiff Ryan Soto’s employment by Defendants Brightview Landscapes, LLC and Brightview Landscape Services, Inc. from approximately 10/29/19 to 4/6/20.  (Complaint ¶21; McConville Declaration in Support of Defendants’ Motion to Stay  (McConville MTS Decl.) attached to Defendants’ Notice of Lodgment (DNOL) as Ex.C, ¶3). 

 

As part of his hiring and onboarding process, Plaintiff received Defendants’ Arbitration Agreement.  (DNOL, Ex.C - McConville MTS Decl. ¶5). 

 

The Arbitration Agreement defines the “CLAIMS COVERED BY THE AGREEMENT” as:

 

“…any and all existing or future disputes or claims between Employee and Employer, that arise out of or relate to Employee’s recruitment, employment, or separation from employment with Employer, including claims involving any current or former officer, director, shareholder, agent or employee of Employer, whether the disputes or claims arise under common law, or in tort, contract, or pursuant to a statute, regulation, or ordinance now in existence or which may in the future be enacted or recognized, including, but not limited to, the following claims: …

 

· claims for non-payment or incorrect payment of wages, commissions, bonuses, severance, and employee fringe benefits, stock options and the like, whether such claims be pursuant to alleged express or implied contract or obligation, equity, and any federal, state, or municipal laws concerning wages, compensation or employee benefits, claims of failure to pay wages for all hours worked, failure to pay overtime, failure to pay wages due on termination, failure to provide accurate, itemized wage statements, entitlement to waiting time penalties and/or any other claims involving employee compensation issues.”

 

(DNOL, Ex.A, p.1)

 

Plaintiff signed the Arbitration Agreement on 10/29/19.  (DNOL, Ex.C - McConville MTS Decl. ¶5; DNOL, Ex.A - Arbitration Agreement.  With regard to representative actions, the Arbitration Agreement provides, in relevant part:

 

“CLASS, COLLECTIVE OR REPRESENTATIVE ACTION WAIVER

 

To the maximum extent permitted by law, no covered claims may be brought or maintained on a class, collective or representative action basis either in Court or in arbitration, notwithstanding the rules of the arbitral body. To the maximum extent permitted by law, the Parties expressly waive any right with respect to any covered claims to submit, initiate, or participate as a plaintiff, claimant or member in a class action, collective action, or representative action regardless of whether the action is filed in arbitration or in court.

 

Any issue concerning the validity of this class action, collective action or representative action waiver, and whether an action may proceed as a class, collective or representative action must be decided by a Court and an arbitrator shall not have authority to consider the issue of the validity of this waiver or whether the action may proceed as a class, collective or representative action. If for any reason this class, collective or representative action waiver is found to be unenforceable, the class, collective or representative claim may only be heard in court and may not be arbitrated. No arbitration award or decision will have any preclusive effect as to issues or claims in any dispute with anyone who is not a named party to the arbitration.”

 

(DNOL, Ex.A, p.2 (bolding in original, underlining added)).

 

“GOVERNING LAW

 

The parties agree that Employer is engaged in transactions involving interstate commerce. We understand and agree that this is an agreement to arbitrate under the Federal Arbitration Act. To the extent not inconsistent with the Federal Arbitration Act, this Agreement and its interpretation, validity, construction, enforcement and performance, as well as disputes and/or claims arising under this Agreement, shall be governed by the law of the state where Employee works or worked at the time the arbitrable dispute or claim arose.”

 

(DNOL, Ex. A, p.3).

 

“KNOWING AND VOLUNTARY AGREEMENT

 

WE UNDERSTAND AND AGREE THAT WE HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY OF OUR OWN CHOOSING BEFORE SIGNING THIS AGREEMENT, AND WE HAVE HAD AN OPPORTUNITY TO DO SO. WE AGREE THAT WE HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND THAT BY SIGNING IT, WE ARE WAIVING ALL RIGHTS TO A TRIAL OR HEARING BEFORE A JUDGE, A JURY OF ANY AND ALL DISPUTES AND CLAIMS SUBJECT TO ARBITRATION UNDER THIS AGREEMENT.”

 

(DNOL, Ex.A, p.5).

 

On 11/24/21, Plaintiff Ryan Soto, individually, and on behalf of other aggrieved employees pursuant to the California Private Attorneys General Act  (Plaintiff) filed this action against Defendants Brightview Landscapes, LLC and Brightview Landscape Services, Inc. (Defendants) for Civil Enforcement Under the Private Attorneys General Act (PAGA), California Labor Code 2698, et seq.

 

On 6/21/22, shortly after the United States Supreme Court decision in Viking River Cruises, Inc. (2022) 142 S.Ct. 1906, Defendants requested that Plaintiff agree to submit his individual PAGA claims to binding arbitration and dismiss the non-individual PAGA claims.  (Levine Decl. ¶2; DNOL, Ex.D).  Plaintiff did not agree.  (Levine Decl. ¶2).  Therefore, on 7/29/22, Defendants filed and served the instant motion seeking an order compelling Plaintiff to arbitrate his individual PAGA claims and for an order dismissing Plaintiff’s non-individual PAGA claims.  Additionally, Defendants move for an order staying this action until the issue of whether arbitration is compelled is determined.

 

ANALYSIS

 

Plaintiff’s objections numbers 1-4) to the declaration of Darlene McConville are overruled.  Plaintiff’s objections (numbers 1-3) to Defendants’ Notice of Lodgment are overruled.

 

The Federal Arbitration Act (FAA) applies where: (1) the contract evidences a transaction in interstate commerce; or (2) where the parties expressly agree that the FAA governs arbitration agreement disputes under the contract.  Cronus Investments, Inc. (2005) 35 C4th 376, 383-384; Rodriguez (2006) 136 CA4th 1110, 1122.  Here, the Arbitration Agreement expressly provides that the parties “understand and agree that this is an agreement to arbitrate under the Federal Arbitration Act.”  (DNOL, Ex.A, p.3 “GOVERNING LAW”).  As such, Plaintiff’s contention that the FAA does not apply to this case is without merit.

 

In determining whether to compel arbitration, the Court must determine: (1) whether there is an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute. Howsam (2002) 537 U.S. 79, 84. 

 

A party moving to compel arbitration need only provide the Court with a copy of the Arbitration Agreement.  See Condee (2001) 88 CA4th 215, 218-219; CRC 3.1300.  Here, Defendants have provided a copy of the Arbitration Agreement to the Court and, contrary to the assertions of Plaintiff, Defendants have also authenticated same through the declaration of Darlene McConville attached to Defendants’ Motion to Stay.  (See DNOL, Ex.A, Ex.C).  The facts that  the Arbitration Agreement does not identify Defendants by name and contains a clerical error by mistakenly identifying Plaintiff as the “employer” do not invalidate the Arbitration.  (See DNOL, Ex.A,  p.1).  The evidence shows that the two offers of employment received by Plaintiff provided that signing the Arbitration Agreement was a condition of employment.  (See McConville Reply Decl. ¶¶3-5, Ex.1-2).  Plaintiff’s continued employment with Defendants with knowledge of such condition precludes Plaintiff’s repudiation of the Arbitration Agreement after the fact.  See Diaz (2019) 34 CA5th 126, 130-131; Craig (2000) 84 CA4th 416, 420-422.  Further, Plaintiff has not submitted a declaration claiming that he did not receive, understand or sign the Arbitration Agreement.  As such, a preponderance of the evidence establishes that it was the mutual intent of Plaintiff and Defendants to enter the subject arbitration agreement.  See Rosenthal (1996) 14 C4th 394, 413; Condee, supra; Rebolledo (2014) 228 CA4th 900, 912-913.    

 

Based on the foregoing, the Court finds that there was an agreement to arbitrate between the parties which is governed by the FAA.

 

The contract language quoted above shows that the Arbitration Agreement covers the dispute in this action as the Arbitration Agreement expressly covers wage disputes and representative claims which by Plaintiff’s own definition includes Plaintiff’s PAGA claims in this action.  (See Complaint ¶1; DNOL, Ex.A, pp.1-4, 6). 

 

There is no evidence that the Arbitration Agreement is substantively or procedurally unconscionable.  The only argument Plaintiff makes regarding the unconscionability of the Arbitration Agreement relates to the application of the holding in Viking River Cruises, Inc. (2022) 142 S.Ct. 1906.  (See Opposition, p.1:9-12, p.9:15-p.10:9).  However, this Court finds that the United States Supreme Court’s holding in Viking River  requires the arbitration of Plaintiff’s individual PAGA claims. 

 

Contrary past California precedent, in Viking River the United States Supreme Court held that the representative nature of a PAGA action does not preclude dividing a PAGA action into a plaintiff’s “individual” PAGA claims (i.e., those claims for civil penalties based on Labor Code violations allegedly personally suffered by the plaintiff) and “non-individual” PAGA claims (those claims for civil penalties based on Labor Code violations allegedly suffered by other allegedly aggrieved employees) where a plaintiff has agreed to arbitrate his individual claims.  See Viking River, supra at 1918, 1922-1923. 

 

Here, the Arbitration Agreement waived Plaintiff’s right to bring a representative action, such as the PAGA claims in this action, “to the maximum extent provided by law.”  (DNOL, Ex.A, p.2).  As such, the Arbitration Agreement waiver provision does not constitute a wholesale waiver of PAGA claims which is still prohibited under Iskanian.  See Viking River, supra at 1916-1917, 1925; Iskanian (2014) 59 C4th 348, 387.  Additionally, the Arbitration Agreement in this case includes a severability provision which carves out class and collective actions, but not representative actions such as PAGA claims.  (DNOL, Ex.A, pp.4-5).  Therefore, Plaintiff’s individual PAGA claims are subject to arbitration.

 

In Viking River, the United States Supreme Court held that a plaintiff loses standing to assert a non-individual PAGA claim once his own individual claims are compelled to arbitration.  See Viking River, supra at 1925.  However, the decision also stated that this standing issue is ultimately one of state law.  In Adolph v. Uber Technologies, Inc. (Case No. S-274671), the  California Supreme Court has granted review of such standing issue.  Defendants have failed to adequately support their claim that they will suffer “significant prejudice” if the stay is granted.  Defendants merely conclude that “a stay will mean that hypothetical penalties will accrue at an astronomical rate and bear no rational relationship to the alleged harm suffered.”  (See Reply, p.10:16-17).  Defendants are receiving the benefit of the Arbitration Agreement as between the parties to such agreement (i.e., Plaintiff and Defendants).    

 

As such, the Court finds that it would be most prudent to stay, rather than dismiss, the representative PAGA claims in this action pending the California Supreme Court’s decision in Adolph.

 

CONCLUSION

 

Based on the foregoing, Plaintiff’s individual PAGA claims are ordered to arbitration.  The request to dismiss, Plaintiff’s non-individual PAGA claims is denied.  However, this action is stayed as to such claims pending a decision by the California Supreme Court in Adolph.  Based on the foregoing, Defendants’ request to stay this action until the issue of whether arbitration is compelled is determined is moot.