Judge: Michael J. Strickroth, Case: 2022-01295070, Date: 2023-08-07 Tentative Ruling

Motion to Compel Arbitration

Defendant 24 Hour Fitness USA, LLC’s is CONTINUED to August 28, 2023, at 1:45 p.m. in Dept. C15.

It is undisputed the Federal Arbitration Act (“FAA”) applies to the instant motion, as the Dispute Resolution Agreement expressly states “This Agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and evidences a transaction involving commerce.” (Ex. A, ¶ 1 of Declaration of Tabraz Rashid.) Per Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, the parties to an agreement may incorporate the FAA into its terms. Id. at 346-348. Moreover, the undisputed Declaration of Tabraz Rashid establishes 24 Hour Fitness is headquartered in Carlsbad, California and is a leading fitness industry pioneer with nearly four million members that span in 11 states. 24 Hour Fitness owns and operates approximately 300 clubs throughout 11 states.” (Rashid Decl., ¶ 2.) The FAA has been found to apply where one of the parties engages in business throughout the United States. Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 57; Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 282.

The Federal Arbitration Act requires the existence of a valid arbitration agreement, before arbitration can be compelled. (See 9 U.S.C. §2). “[I]t is a cardinal principle that arbitration under the FAA ‘is a matter of consent, not coercion.’” Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236. “Thus, ‘a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.’” (Ibid.) “If a party to a civil action asks the court to compel arbitration of the pending claim, the court must determine in a summary proceeding whether an ‘agreement to arbitrate the controversy exist.’” Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 754. “Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence.” Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal.4th 394, 413.

Here, Defendant provides sufficient evidence the parties impliedly agreed to arbitrate all disputes which could arise out of Plaintiff’s employment. Craig v. Brown & Root, (2000) 84 Cal. App. 4th 416, 420. Plaintiff agreed to arbitrate all disputes by reviewing and acknowledging the Dispute Resolution Agreement, failing to opt-out, and continuing her employment with Defendant after acknowledgment. Ex. A to the Declaration of Tabraz Rashid, HR Shared Services Senior Specialist is a document entitled “Dispute Resolution Agreement.” Ex. B. to the Declaration of Tabraz Rashid is a copy of the Policy Acknowledgement Status Report for Plaintiff establishing Plaintiff reviewed and acknowledged the Dispute Resolution Agreement. Rashid’s Declaration sufficiently authenticates the exhibits and process by which Plaintiff acknowledged the Dispute Resolution Agreement and Opt-Out Policy. Evidence Code § 1400. Plaintiff does not provide evidence she did not review and acknowledge the Dispute Resolution Agreement, or that she opted out of the Dispute Resolution Agreement. Plaintiff’s argument she did not electronically sign or consent to an electronic signature is not persuasive because the Dispute Resolution Agreement did not call for a signature.

Once the moving party establishes an agreement to arbitrate, the FAA requires enforcement of an arbitration agreement “save upon such grounds as exist at law or in equity for the revocation of any contract…” 9 U.S.C. §2. Here, Plaintiff does not argue there are defenses to enforcement of the agreement to arbitrate. Thus, the Court finds the arbitration agreement is enforceable against Defendant 24 Hour Fitness USA, LLC.

Defendant argues Plaintiff should be ordered to arbitrate the claims against the individual defendants. A nonsignatory may enforce an arbitration agreement where the claims against the nonsignatory are based on an underlying contract which includes the arbitration provision.  Marenco v. DirecTV LLC (2015) 233 Cal.App.4th 1409; JSM Tuscany LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1240.

However, this rule applies when the nonsignatory has moved to compel arbitration. Here, it is unclear whether the nonsignatory defendants have even been served with the Summons and Complaint. They did not bring or have notice of the instant motion. The parties are ordered to appear ready to discuss how to move forward regarding the individual defendants in this matter. The parties are ordered to file briefs 9 court days before the hearing regarding whether the court has jurisdiction to compel arbitration against the defendants. 

Alternatively, if the individuals have been served or are about to be served, they can submit a declaration that they are joining in the request to compel arbitration. Should the individuals oppose the motion, they will be given proper notice and opportunity to be heard.

Based on the foregoing, Defendant 24 Hour Fitness USA, LLC’s is CONTINUED to August 28, 2023, at 1:45 p.m. in Dept. C15.

Defendant to give notice.

Case Management Conference

The Case Management Conference is continued as well to 8/28/2023 at 1:45 PM in Department C15.  Defendant 24 Hour Fitness to give notice.