Judge: Peter A. Hernandez, Case: 24STCV11482, Date: 2024-10-24 Tentative Ruling

Case Number: 24STCV11482    Hearing Date: October 24, 2024    Dept: 34

Defendants Hathaway Dinwiddie Construction Company and Hathaway Dinwiddie Construction Group’s Motion to Compel Arbitration is DENIED.

Background

On May 7, 2024, Plaintiff Armando Almejo (“Plaintiff”) filed a complaint against Defendants Hathaway Dinwiddie Construction Company, Hathaway Dinwiddie Construction Group, Celedonio Jauregui, Abel Cueva, and Does 1-100 arising from Plaintiff’s employment with Defendants Hathaway Dinwiddie Construction Company and Hathaway Dinwiddie Construction Group (“Entity Defendants”) alleging causes of action for:

1.               Discrimination in Violation of FEHA;

2.               Hostile Work Environment Harassment in Violation of FEHA;

3.               Retaliation in Violation of FEHA;

4.               Failure To Prevent Discrimination, Harassment, and Retaliation in Violation of FEHA;

5.               Failure To Provide Reasonable Accommodation in Violation of FEHA;

6.               Failure To Engage In Interactive Process in Violation of FEHA;

7.               Whistleblower Retaliation (Violation of Labor Code § 1102.5);

8.               Wrongful Termination in Violation of Public Policy;

9.               Interference With CFRA Leave; AND

10.            Intentional Infliction of Emotional Distress.

On June 13, 2024, Entity Defendants filed an answer to Plaintiff’s complaint.

On July 11, 2024, Entity Defendants filed this Motion to Compel Arbitration. On July 26, 2024, Plaintiff filed an opposition to Entity Defendant's motion. On August 1, 2024, Entity Defendants filed a reply to Plaintiff’s opposition.

On July 24, 2024, Defendant Celedonio Jauregui filed an answer to Plaintiff’s complaint.

Legal Standard

“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 determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for rescission of the agreement.” (Code Civ. Proc., § 1281.2, subds. (a) and (b).)

The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence. (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 761.) The burden then shifts to the opposing party to prove by a preponderance of the evidence a defense to enforcement (e.g., fraud, unconscionability, etc.) (Ibid.) “In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.)

“If 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).

Existence of an Arbitration Agreement

            Entity Defendants move the court for orders compelling arbitration of Plaintiff’s claims and staying all further judicial proceedings in this action pending completion of arbitration.

Entity Defendants argue that Plaintiff was employed between 2018 to 2022 pursuant to the terms and conditions of a collective bargaining agreement between Entity Defendants and Plaintiff’s collective bargaining representative, the Southern California District Council of Laborers (“Laborers Union”). (Motion, at p. 6.) Entity Defendants contend that Plaintiff’s employment was subject to the Master Labor Agreement which preceded the updated 2022-2026 Master Labor Agreement (“MLA”). Entity Defendants provide a copy of Appendix C of the 2022-2026 MLA which includes arbitration procedures that cover Plaintiff’s claims. (Id., at pp. 6-8; Kozinski Decl. ¶ 7, Exh. C.) The arbitration agreement provides, in relevant part, as follows:

  Any dispute, complaint or grievance alleging a violation of the Master Labor Agreement shall be processed through the Procedure for Settlement of Grievances 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 to 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 claims or 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, all derivative claims under California Business and Professions Code section 17200, et seq., all associated penalties, and federal, state and local laws 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, not the Local Union or Union, 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 claims concerning the matters addressed in the foregoing laws (other than a claim of violation of the Master Labor Agreement that are deemed Contractual Disputes). This Appendix C shall not apply to claims before the National Labor Relations Board, the Equal Employment Opportunity Commission, the Department of Fair Employment and Housing, and the California Division of Workers' Compensation.

In addition to the claims listed above, the parties have also agreed to provide for final and binding arbitration of any and all claims that could be asserted under all local, state and federal anti-discrimination laws, including but not limited to the California Fair Employment and Housing Act, Title VII of the Civil Rights Act 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and the California Family Rights Act. All claims for discrimination, harassment or retaliation in employment on the basis of race, age, sex, gender, religion, national origin, alienage, marital status, sexual orientation, disability or any other basis that is protected under any of those laws, as well as all related or similar claims (including but not limited to those for wrongful termination in violation of public policy, intentional infliction of emotional distress, violation of 42 U.S.C. section 1981, and retaliation in violation of Labor Code section 1102.5), shall be resolved exclusively under and in accordance with the procedure for settlement of grievances and disputes set forth in this Appendix C to the Agreement and not in a court of law. The agreement to arbitrate such claims shall also include those asserted against any of the Employer’s employees, officers or owners. The agreement to arbitrate claims described in this paragraph is subject to any applicable rights provided in 9 U.S.C. sections 401-402.

(Kozinski Decl., ¶ 7, Exh. C, Appendix C, at pp. 62-63 [emphasis added].)

            In opposition, Plaintiff argues that Plaintiff did not enter into a contract to arbitrate nor that an enforceable arbitration agreement exists since the arbitration provisions in the 2022-2026 MLA were adopted after Plaintiff was terminated. (Opp., at p. 2.) Plaintiff alleges that Plaintiff was terminated on May 16, 2022, six weeks before the 2022-2026 MLA went into effect on July 1, 2022. (Id.; Almejo Decl., ¶ 4.) Additionally, Plaintiff argues that Plaintiff did not receive, see, agree, or sign the 2022-2026 MLA. (Opp., at pp. 2-3; Almejo Decl., ¶ 5.)

            In reply, Entity Defendants argue that Plaintiff was required to be a member of the Laborers Union, which was a signatory to the 2022-2026 MLA, as a condition of Plaintiff’s employment. (Reply, at p. 2.) Entity Defendants contend that it is immaterial that Plaintiff had received and reviewed the arbitration agreement since it was entered into by Plaintiff’s collective bargaining representative making Plaintiff subject to the MLA. (Id., at pp. 2-3.) Entity Defendants also argue that arbitration agreements may be applied retroactively to pending claims even if Plaintiff was no longer an employee when the agreement went into effect. (Id., at p. 3.) Entity Defendants point to Salgado v. Carrows Restaurants, Inc. (2019) 33 Cal.App.5th 356 (“Salgado”), and Oswald v. Murray Plumbing & Heating Corp. (2022) 82 Cal.App.5th 938, 942 (“Oswald”) for their retroactivity argument. (Id., at p. 3.)

            An “arbitration agreement may be applied retroactively to transactions which occurred prior to execution of the arbitration agreement.’ [Citations.]” (Salgado v. Carrows Restaurants, Inc., supra, (2019) 33 Cal.App.5th 361.) For example, “[a] contracting party may agree to an arbitration clause that applies retroactively to a pending lawsuit, affecting claims that arose while the plaintiff worked for the defendant but before the arbitration clause was signed, if the clause explicitly applies to all claims relating to the employment. [Citations.]” (Oswald, supra, 82 Cal.App.5th 944.)  

            The court finds Oswald distinguishable from the circumstances presented here. In Oswald, the union at issue signed a 2021 MOU that provided for arbitration of claims like those alleged by the plaintiff in that case, where the MOU was retroactively applicable to 2017, and where the plaintiff’s claims arose from incidents that took place in 2019 and 2020. (Oswald, supra, 82 Cal.App.5th at p. 944; see id. at pp. 944-945 [“The same reasoning [that a contracting party may agree to an arbitration clause that applies retroactively if the clause explicitly applies to all claims relating to the employment] applies here, where the contracting party (Oswald’s union) agreed to retroactively modify and clarify an existing arbitration clause”].)

            Here, the 2022-2026 MLA was effective as of July 1, 2022. (Motion, at pp. 6-8; Kozinski Decl. ¶ 7, Exh. C.) However, the 2022-2026 MLA does not show a retroactivity clause or indicate that pre-July 1, 2022 claims were covered by the 2022-2026 MLA. Oswald is thus inapposite. 

            The court also finds that Salgado is not helpful to a finding in favor of an order to arbitrate. The court recognizes that Salgado instructs that an agreement to arbitrate a dispute does not need to pre-date the actions giving rise to the dispute, citing authorities that have held that parties that have agreed to arbitrate all claims between the parties necessarily agreed to arbitrate claims pre-dating the arbitration agreement. (Salgado, supra, 33 Cal.App.5th at pp. 361-362.) While Salgado made no determination as to the arbitrability in that case, the plaintiff in Salgado sued her employer (Carrows) and, after filing suit, signed an arbitration agreement covering “all claims arising out of her employment with Defendants, and all causes of action alleged in her Complaint ar[o]se out of such employment.” (Id. at pp. 358-359, 362.)

            Here, Plaintiff’s Laborers Union entered into the 2022-2026 MLA, which provides that the union members agreed to arbitrate their claims. (Motion, at pp. 6-8; Kozinski Decl. ¶ 7, Exh. C.) The general concept of Salgado thus appears to apply to the union members. However, Plaintiff was allegedly terminated on May 16, 2022, as Plaintiff contends, or on April 8, 2022, as seen in the Verification of Last Day of Employment signed by Plaintiff in Exhibit A of Kozinski’s declaration. (Almejo Decl., ¶ 4; Kozinski Decl. ¶ 3, Exh. A.) In either instance, Plaintiff was no longer an employee of Entity Defendants at the time the 2022-2026 MLA went into effect on July 1, 2022.

            Per the Oswald discussion above, the 2022-2026 MLA was not retroactively applicable prior to July 1, 2022. Under these circumstances, the court is not clear as to the authority that permits a union to enter a collective bargaining agreement that, by virtue of its execution, permits the arbitrability of all its former members’ claims whose employment was terminated prior to the execution of the agreement.

            The party seeking arbitration has the “burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence[.]” (Ruiz, supra, 232 Cal.App.4th at p. 842.) Simply, the court finds that Entity Defendants have not shown that Salgado should be applicable to the circumstances before the court because it is not clear that the Laborers Union’s entry into the 2022-2026 MLA leads to an automatic application of the MLA’s terms to members who left the union, voluntarily or not, prior to the execution of the 2022-2026 MLA. 

            As such, the court finds no merit to Entity Defendants’ arguments that since Plaintiff was required to be a member of the Laborers Union which was signatory to the 2022-2026 MLA as a condition of his employment with Entity Defendants, the MLA specifically requires the arbitration of claims made by union members, such as Plaintiff, regardless of when they were made. (Reply, at p. 2.)

            The fact that the 2022-2026 MLA was entered into by Plaintiff’s Laborer Union does not mean that the MLA was applicable to members of the union whose status as union members was terminated prior to the execution of the MLA, or where Plaintiff does not appear to have been a member of the union at issue when the MLA went into effect, and with no indication to the contrary by Entity Defendants. In fact, Entity Defendants moving papers state that “[a]s a member of the Laborers Union, Plaintiff would have been employed under the terms and conditions of the 2022-2026 Master Labor Agreement had his employment continued past June 30, 2022.” (Motion, at p. 6-7 [emphasis added].)

            Moreover, though the court recognizes the wide scope of the 2022-2026 MLA’s grievances provision, the court finds that, per the Salgado discussion above, it is not clear that the Laborers Union’s clear agreement to arbitrate should apply to the union’s past members, whose employment ended prior to the execution of the MLA.

            The court thus finds that the 2022-2026 MLA does not provide grounds to compel arbitration against Plaintiff.

            As this agreement is the only basis for arbitration against Plaintiff, Entity Defendant’s motion is DENIED.

Conclusion

Defendants Hathaway Dinwiddie Construction Company and Hathaway Dinwiddie Construction Group’s Motion to Compel Arbitration is DENIED.