Judge Michael P. Linfield, Case 22STCV33698 2023-05-16 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV33698, Date: 2023-05-16 Tentative Ruling

Case Number: 22STCV33698 Hearing Date: May 16, 2023 Dept: 34

SUBJECT: Petition to Compel Arbitration of Plaintiff’s Fifth Cause of Action and Stay the Remainder of the Litigation

Moving Party: Defendants Guy F. Atkinson Construction, LLC and Clark Construction Group – California, LP

Resp. Party: Plaintiff Benjamin Resendez

Defendants Guy F. Atkinson Construction, LLC and Clark Construction Group – California, LP’s Petition to Compel Arbitration of Plaintiff’s Fifth Cause of Action and Stay the Remainder of the Litigation is GRANTED.

The Court schedules as status conference re arbitration for June 18, 2024. The parties are to file a Joint Status Conference Report 5 court days prior to the status conference hearing.

BACKGROUND:

On October 17, 2022, Plaintiff filed his Complaint against Defendants Guy F. Atkinson Construction, LLC and Clark Construction Group – California, LP on causes of action arising from Plaintiff’s employment with Defendants.

On November 18, 2022, Defendants filed their Answer.

On April 24, 2023, Defendants filed their Petition to Compel Arbitration of Plaintiff’s Fifth Cause of Action and Stay the Remainder of the Litigation. In support of their Petition, Defendants concurrently filed: (1) Memorandum of Points and Authorities (“Memorandum”); (2) Declaration of Maggie Lechleitner; (3) Declaration of Raye Gould; (4) Declaration of Briana Labriola; and (5) Proposed Order.

On May 3, 2023, Plaintiff filed his Opposition.

On May 9, 2023, Defendants filed their Reply and their Request for Judicial Notice.

ANALYSIS:

I. Judicial Notice

Defendants request that the Court take judicial notice of the two orders and a transcript from the case of Resendez v. Guy F. Atkinson Construction, LLC, Case No. 22STCV32705 in Dept. 10 of the Los Angeles Superior Court, Judge Highberger presiding.

“A written trial court ruling in another case has no precedential value.” (Budrow v. Dave & Buster’s of California (2009) 171 Cal.App.4th 875, 885; Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 761; In re Molz (2005) 127 Cal.App.4th 836, 845; Santa Ana Medical Hospital Center v. Belshé (1997) 56 Cal.App.4th 819, 831.)

The Court DENIES judicial notice of these items

II. Legal Standard

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.)

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“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that 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 [unless it makes certain determinations].” (Code Civ. Proc., § 1281.2.)¿¿¿¿¿¿

“Under both federal and state law, arbitration agreements are valid and enforceable, unless they are revocable for reasons under state law that would render any contract revocable. . . . Reasons that would render any contract revocable under state law include fraud, duress, and unconscionability.” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239, citations omitted.)

“The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence the existence of an arbitration agreement.¿The party opposing the petition bears the burden of establishing a defense to the agreement's enforcement by a preponderance of the evidence.¿In determining whether there is a duty to arbitrate, the trial court must, at least to some extent, examine and construe the agreement.” (Id.)

III. Discussion

A. The Parties’ Arguments

Defendants move the Court to: (1) order arbitration of Plaintiff’s fifth cause of action; and (2) stay the remainder of the claims pending completion of the arbitration. (Memorandum, p. 10:17–20.)

Defendants argue: (1) federal law requires enforcement of the agreement to arbitrate; (2) an agreement to arbitrate exists and it encompasses Plaintiff’s fifth cause of action; (3) the agreement is not unconscionable; (4) Defendant Guy F. Atkinson Construction, LLC has not waived its right to compel arbitration; and (5) that Plaintiff’s remaining claims should be stayed pending arbitration. (Memorandum, pp. 3:20–21, 5:8–9, 7:4, 9:1, 9:21.)

Plaintiff opposes the Petition, arguing: (1) that there is no clear and unmistakable waiver; (2) that Plaintiff’s non-wage and hour whistleblower claim is not covered by the agreement; and (3) that compelling one of seven causes of action to arbitration is inefficient, duplicative, and a waste of resources. (Opposition, pp. 2:21, 4:18–19, 7:4–5.)

Defendants reiterate their arguments in their Reply, as well as arguing that the Collective Bargaining Agreement’s (“CBA’s”) arbitration provision explicitly includes Plaintiff’s fifth cause of action, which also makes the wage and hour argument irrelevant. (Reply, pp. 3:13–14, 7:23–24.)

B. Cause of Action at Issue

The fifth cause of action is for whistleblower retaliation pursuant to Labor Code section 1102.5, subdivisions (b) and (f). (Complaint, ¶¶ 64–70.)

“An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information, or because the employer believes that the employee disclosed or may disclose information, to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance, or for providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.” (Lab. Code, § 1102.5, subd. (b).)

“In addition to other penalties, an employer that is a corporation or limited liability company is liable for a civil penalty not exceeding ten thousand dollars ($10,000) for each violation of this section.” (Lab. Code, § 1102.5, subd. (f).)

C. The Arbitration Provision

Plaintiff was a union laborer during his employment with Defendants. As part of his union contract, Plaintiff was covered by a CBA. The CBA contains an extensive set of arbitration provisions. (There are at least two different arbitration provisions in the CBA, including one for contractual issues and another for statutory disputes. [See Decl. Lechleitner, Exh. A, pp. 15, 23–25, 58–60.])

The following are the relevant portions of the relevant arbitration provision:

APPENDIX C

GRIEVANCE OF DISPUTES

. . .

A. Arbitration of Employment Related Claims.

Any dispute, complaint or grievance alleging a violation of the Master Labor Agreement shall be processed through the Procedure for Settlement of Grievance and Disputes in Article VI, and the Local Union and Union shall retain sole and exclusive ability to bring such a grievance to arbitration pursuant such Article. In addition, any dispute, complaint or grievance concerning a violation of, or arising under, Industrial Welfare Commission Wage Order 16 (“Wage Order 16”) which is subject to the Procedure for Settlement of Grievance and Disputes in Article VI by operation of Wage Order 16 and exemptions contained therein for employees covered by collective bargaining agreements shall remain subject only to Article VI and not this Appendix C. Disputes, complaints or grievances within the scope of this paragraph shall be referred to as “Contractual Disputes”.

In addition to Contractual Disputes that may be brought by the Union or Local Union as described above, all employee disputes concerning violations of, or arising under Wage Order 16 (except as noted in the immediately preceding paragraph), the California Labor Code Sections identified in California Labor Code section 2699.5 as amended, the California Private Attorneys General Act (Labor Code section 2698, et seq.), and federal, state and local law concerning wage-hour requirements, wage payment and meal or rest periods, including claims arising under the Fair Labor Standards Act (hereinafter “Statutory Dispute” or “Statutory Disputes”) shall be subject to and must be processed by the employee pursuant to the procedures set forth in this Appendix C as the sole and exclusive remedy. To ensure disputes are subject to this grievance procedure in accordance with the intended scope of coverage set forth herein, Statutory Disputes also include any contract, tort or common law claim concerning the matters addressed in the foregoing laws (other than a claim of violation of the Master Labor Agreement which are deemed Contractual Disputes). This Appendix C shall not apply to claims before the National Labor Relations Board, the Employee Equal Opportunity Commission, the Department of Fair Employment and Housing, and the California Division of Workers’ Compensation.

B. Procedure for Arbitration of Disputes.

No Statutory Dispute subject to this Appendix C shall be recognized unless called to the attention of and, in the event it is not resolved, confirmed in writing by the individual employee to the individual Contractor and the Local Union within the later of (i) the time set forth in the Procedure for Settlement of Grievance and Disputes in Article VI or (ii) the time provided for under applicable statute.

Grievances and arbitrations of all Statutory Disputes shall be brought by the individual employee in an individual capacity only and not as a grievant or class member in any purported class or representative grievance or arbitration proceeding. The Arbitrator shall have the authority to consolidate individual grievances for hearing, but shall not have the authority to fashion a proceeding as a class or collective action or to award relief to a group or class of employees in one grievance or arbitration proceeding.

If the individual employee dispute is a Statutory Dispute subject to this Appendix C, the grievance shall not be heard by the Joint Adjustment Board, but shall proceed directly to an independent Arbitrator. In such cases, the procedures for selection of an Arbitrator contained in Article VI shall not apply; instead, the individual employee and the Contractor shall proceed to arbitration pursuant and subject to the American Arbitration Association National Rules for Employment Disputes. The Contractor shall pay all fees and costs related to the services of the American Arbitration Association and the services of the Arbitrator; however, the Arbitrator may reallocate such fees and costs in the arbitration award, giving due consideration to the individual employee’s ability to pay. Each party shall pay for its own costs, expenses, and attorneys’ fees, if any. However, if any party prevails on a statutory claim which affords the prevailing party costs or attorneys’ fees, or if there is a written agreement providing for an award of costs or attorneys’ fees, the Arbitrator may award costs and reasonable attorneys’ fees to the prevailing party. Any issue regarding the payment of fees of costs, and any disputes about the manner of proceeding shall be decided by the Arbitrator selected. The Local Union or Union shall not be a party to such, and shall bear no costs or fees of the arbitration.

The Arbitrator shall have full authority to fashion such remedies and award relief consistent with limitations under federal and state law, and precedent established thereunder, whether by way of damages or the award of attorneys’ fees and other costs, orders to cease and desist, or any and all other reasonable remedies designed to correct any violation which the Arbitrator may have found to have existed, including such remedies as provided under applicable state or federal law or regulation. The decision of the Arbitrator is final and binding upon the parties and is enforceable in a court of competent jurisdiction.

(Decl. Lechleitner, Exh. A, pp. 58–60.)

D. Discussion

a. The Fifth Cause of Action for Whistleblower Retaliation Must be Arbitrated

Although it is somewhat hidden, the arbitration provision in the CBA covers the cause of action for whistleblower retaliation pursuant to Labor Code section 1102.5.

The arbitration provision states “In addition to Contractual Disputes that may be brought by the Union or Local Union as described above, all employee disputes concerning violations of, or arising under Wage Order 16 (except as noted in the immediately preceding paragraph), the California Labor Code Sections identified in California Labor Code section 2699.5 as amended, . . . .”

According to Labor Code section 2699.5:

“The provisions of subdivision (a) of Section 2699.3 apply to any alleged violation of the following provisions: subdivision (k) of Section 96, Sections 98.6, 201, 201.3, 201.5, 201.7, 202, 203, 203.1, 203.5, 204, 204a, 204b, 204.1, 204.2, 205, 205.5, 206, 206.5, 208, 209, and 212, subdivision (d) of Section 213, Sections 221, 222, 222.5, 223, and 224, paragraphs (1) to (5), inclusive, (7), and (9) of subdivision (a) of Section 226, Sections 226.7, 227, 227.3, 230, 230.1, 230.2, 230.3, 230.4, 230.7, 230.8, and 231, subdivision (c) of Section 232, subdivision (c) of Section 232.5, Sections 233, 234, 351, 353, and 403, subdivision (b) of Section 404, Sections 432.2, 432.5, 432.7, 435, 450, 510, 511, 512, 513, 551, 552, 601, 602, 603, 604, 750, 751.8, 800, 850, 851, 851.5, 852, 921, 922, 923, 970, 973, 976, 1021, 1021.5, 1025, 1026, 1101, 1102, 1102.5, and 1153, subdivisions (c) and (d) of Section 1174, Sections 1194, 1197, 1197.1, 1197.5, and 1198, subdivision (b) of Section 1198.3, Sections 1199, 1199.5, 1290, 1292, 1293, 1293.1, 1294, 1294.1, 1294.5, 1296, 1297, 1298, 1301, 1308, 1308.1, 1308.7, 1309, 1309.5, 1391, 1391.1, 1391.2, 1392, 1683, and 1695, subdivision (a) of Section 1695.5, Sections 1695.55, 1695.6, 1695.7, 1695.8, 1695.9, 1696, 1696.5, 1696.6, 1697.1, 1700.25, 1700.26, 1700.31, 1700.32, 1700.40, and 1700.47, Sections 1735, 1771, 1774, 1776, 1777.5, 1811, 1815, 2651, and 2673, subdivision (a) of Section 2673.1, Sections 2695.2, 2800, 2801, 2802, 2806, and 2810, subdivision (b) of Section 2929, and Sections 3073.6, 6310, 6311, and 6399.7.” (Labor Code §2699.5.)

Although hidden in the middle of the paragraph, this section identifies Labor Code §1102.5 as one of the Labor Codes that are covered by arbitration.

Therefore, the arbitration provision in the CBA covers this cause of action.

However, the Court notes that the arbitration agreement is substantively unconscionable in at least one respect. The agreement allows the arbitrator to require the Plaintiff to pay the arbitration costs and fees. (See Arbitration Agreement: “the Arbitrator may reallocate such fees and costs in the arbitration award, giving due consideration to the individual employee’s ability to pay.”) Such an award of fees is in the sole discretion of the arbitrator. (See Arbitration Agreement: “Any issue regarding the payment of fees of costs, and any disputes about the manner of proceeding shall be decided by the Arbitrator selected.”) During oral argument, Defendant agreed that this clause could be severed from the agreement. The Court does so.

The Court GRANTS the petition to compel arbitration as to the fifth cause of action, with the exception of severing the ability of the arbitrator to award costs or fees against Plaintiff.

b. The Case is Stayed as to the Other Causes of Action

Defendants argue that under the FAA, the remaining claims must be stayed pending arbitration. Plaintiff argues that judicial economy would not be served by staying the case.

Defendants’ legal argument is correct. The Court will stay the remaining causes of action. However, as the Court stated during oral argument, Plaintiff is the master of his complaint. If Plaintiff decides to dismiss his fifth cause of action, the arbitration becomes moot, and Plaintiff could proceed to trial on March 25, 2024 on the remaining causes of action. Should Plaintiff choose to do so, Plaintiff may return to Court with a motion dismissing his fifth cause of action and asking the Court to lift the stay.

IV. Conclusion

The Court schedules as status conference re arbitration for June 18, 2024. The parties are to file a Joint Status Conference Report 5 court days prior to the status conference hearing.