Background   

Case No. KC069709 (Negron)

On October 13, 2017, Plaintiff Robert Negron, on behalf of himself and all “aggrieved employees” pursuant to Labor Code § 2698 et seq., filed a “Representative Action Complaint for Penalties Pursuant to Labor Code § 2699(f) for Violations of Labor Code §§ 201-203, 226(a), 226.7, 510, 512 and 1194” against Defendants Pama Management, Inc., (“Pama”), I E Rental Homes, Inc. (“I E Rental”) and Does 1-10.

On May 10, 2019, Case Nos. KC069709 and BC723619 were deemed related; Case No. KC069709 was deemed the lead case. On July 12, 2019, Case Nos. KC069709 and BC710273 were deemed related; Case No. KC069709 was deemed the lead case. On March 18, 2021, Case Nos. BC723619, KC069709, BC710273, and 20STCV30797 were deemed related; Case No. KC069709 was deemed the lead case.

On June 13, 2022, a “Stipulation and Order to Consolidate Actions” was filed, wherein Case Nos. KC069709 (Negron), BC710273 (Payan) and 20STCV30797 (Navarro) were consolidated for purposes of pretrial discovery, law and motion and trial.

On December 15, 2022, Case Nos. BC723619, BC710273 and 20STCV30797 were consolidated into Case No. KC069709; Case No. KC069709 was designated as the lead case.

Case No. BC710273 (Payan)

On June 15, 2018, Plaintiff Johana Payan, on behalf of herself and all others similarly aggrieved, filed a Representative Action Complaint asserting causes of action against Pama, Group X Rosemead Properties, LP, Nijjar Realty Inc. and Does 1-100 for:

1.                  Civil Penalties Under Labor Code §§ 226.3 and 2699

2.                  Violation of Labor Code § 558

3.                  Violation of Labor Code § 1197.1

On March 18, 2021, Case Nos. BC723619, KC069709, BC710273, and 20STCV30797 were deemed related; Case No. KC069709 was deemed the lead case.

On June 13, 2022, Case Nos. KC069709, BC710273 and 20STCV30797 were consolidated; Case No. KC069709 was designated as the lead case.

Case No. BC723619 (Deprizito)

On October 1, 2018, Plaintiffs Desiree Deprizito and Jesse Gonzalez, on behalf of themselves and all other aggrieved employees, filed a “Complaint for Recovery of Civil Penalties Pursuant to the California Private Attorney General Act,” asserting causes of action against Pama, I E Rental Homes, Inc., Swaranjit S. Nijjar, Daljit Kler, Michael Preet Nijjar, Sanjeet Nijjar, Sabraj Nijjar, Everet Miller (collectively, “Defendants”) and Does 1-10 for:

1.                  Labor Code Section 210

2.                  Labor Code Section 256

3.                  Labor Code Section 558

4.                  Labor Code Section 1197.1

5.                  Labor Code Section 226.3

6.                  Labor Code 2699(f) for Meal Period Violations

7.                  Labor Code Sections 2699(f) for Rest Period Violations

8.                  Labor Code 2699(f) for Violations of Labor Code Section 226(a)

9.                  Labor Code 2699(f) for Violations of Labor Code Section 2802

On March 18, 2019, Defendants’ defaults were entered. On July 8, 2019, Pama filed a “Notice of Conditional Settlement of Entire Action.”

On January 31, 2020, the court granted Negron’s motion for leave to intervene. On July 29, 2020, Negron, on behalf of himself and all current and former aggrieved employees pursuant to the Labor Code Private Attorneys General Act of 2004, Labor Code § 2698 et seq. filed his “Representative Action Complaint for Penalties Pursuant to Labor Code § 2699(f) for Violations of Labor Code §§ 201-203, 226(a), 226.7, 510, 512 and 1194” against Defendants.

On February 4, 2021, the court granted Pama’s motion to enforce settlement. On February 17, 2021, the “Order Granting Approval of PAGA Settlement” was filed and the case was dismissed, with prejudice.

On March 18, 2021, Case Nos. BC723619, KC069709, BC710273, and 20STCV30797 were deemed related; Case No. KC069709 was deemed the lead case.

Case No. 20STCV30797 (Navarro)

On February 8, 2021, Plaintiff Jesus Navarro, on behalf of himself and others similarly situated, filed a First Amended Complaint for Representative Action for Penalties Under Private Attorneys General Act, Labor Code § 2698 for:

1.                  Failure to Pay Minimum Wages

2.                  Failure to Pay Wages and Overtime Under Labor Code § 510

3.                  Meal Period Liability Under Labor Code §§ 226.7, 512

4.                  Rest-Break Liability Under Labor Code § 226.7

5.                  Violation of Labor Code §§ 226(a) and 1174

6.                  Violation of Labor Code §§ 203 and 204

7.                  Failure to Reimburse Expenses § 2802

8.                  Violation of Business & Professions Code § 17200 et seq.

On March 18, 2021, Case Nos. BC723619, KC069709, BC710273, and 20STCV30797 were deemed related; Case No. KC069709 was deemed the lead case.

On June 13, 2022, Case Nos. KC069709, BC710273 and 20STCV30797 were consolidated; Case No. KC069709 was designated as the lead case.

Legal Standard

Under California and federal law, public policy favors arbitration as an efficient and less expensive means of resolving private disputes. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 8-9; AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.) Accordingly, whether an agreement is governed by the California Arbitration Act (“CAA”) or the Federal Arbitration Act (“FAA”), courts resolve doubts about an arbitration agreement’s scope in favor of arbitration.  (Moncharsh, at 9; Comedy Club, Inc. v. Improv West Assocs. (9th Cir. 2009) 553 F.3d 1277, 1284; see also Engalla v. Permanente Med. Grp., Inc. (1997) 15 Cal.4th 951, 971-972 [“California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability and a requirement that an arbitration agreement must be enforced on the basis of state law standards that apply to contracts in general”].) “[U]nder both the FAA and California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (Higgins v. Sup. Ct. (2006) 140 Cal.App.4th 1238, 1247 [quotation marks and citation omitted].)

 

Generally, on a motion to compel arbitration, the court must grant the motion unless it finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (Code Civ. Proc., § 1281.2; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)

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.) (Id.) “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, supra, 15 Cal.4^th at 972.)

Discussion

Pama, IE Rental, Mobile, Group X and Nijjar (hereinafter collectively, “Defendants”) move the court for an order compelling arbitration of Negron’s, Payan’s and Navarro’s individual PAGA claims against them.

Request for Judicial Notice

The court rules on Defendants’ Request for Judicial Notice as follows: Granted as to Exhibit K (i.e., “Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association”).

Merits

1.         Negron

At the outset, the court notes that Negron does not oppose the instant motion “to the extent that it seeks to arbitrate this matter” and “agrees with Defendants that this matter should be sent to arbitration based on the Parties’ Residential Apartment Manager Employment Agreement (the “Employment Agreement”) and Arbitration Agreement -- Addendum to Employment Agreement (the “Arbitration Agreement”) (together, the ‘Agreements’).” (Opp., 1:2-9). 

Negron, however, does oppose the motion on the basis that the arbitrator, not the court, should determine the issue of arbitrability, i.e., whether the Agreements allow for the parties to arbitrate Negron’s individual PAGA claims (Id., 1:10-12 and 1:27-2:1); in doing so, Negron makes reference to the parties’ Employment Agreement, which provides in relevant part:

            RESIDENTIAL APARTMENT MANAGER EMPLOYMENT

AGREEMENT

 

This Employment Agreement . . . is entered into between PAMA
MANAGEMENT COMPANY . . . and Robert Negron (hereinafter

‘Employee’). . .

 

8.         ARBITRATION OF DISPUTE: Any dispute, claim or grievance arising

out of relating of [sic] Employee’s employment, or out of the interpretation or

applicability of this Agreement, shall be submitted to binding arbitration

pursuant to the Employment Arbitration Rules of the American Arbitration

Association. The parties hereby specifically agree to arbitrate any and all

claims arising out of Employee’s employment under this Agreement or the

termination thereof, including any and all statutory claims based on all

applicable federal and state anti-discrimination, wage payment, and other

employment laws. The parties agree to accept the Arbitrator’s award as final

and binding as to any matters properly submitted to arbitration under

Agreement.”

 

(Wilson Decl., ¶ 7, Exh. A, p. 3, ¶ 8 [emphasis added].)

“California law is consistent with federal law on the question of who decides disputes over arbitrability.” (Dream Theater, Inc. v. Dream Theater (2004) 124 Cal.App.4th 547, 553.) “Where ordinary contracts are at issue, it is up to the parties to determine whether a particular matter is primarily for arbitrators or for courts to decide . . . courts presume that the parties intend courts, not arbitrators, to decide . . . disputes about ‘arbitrability.’” (BG Group, PLC v. Republic of Argentina (2014) 572 U.S. 25, 34.) With that said, “parties can agree to arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.” (Rent-A-Center, Inc. v. Jackson (2010) 561 U.S. 63, 68-69.) “[W]hen the parties have clearly and unmistakably agreed to delegate questions regarding the validity of the arbitration clause to the arbitrator[,]. . . [s]uch delegation clauses are generally enforceable according to their terms.” (Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096, 1108.)

“There are two prerequisites for a delegation clause to be effective. First, the language of the clause must be clear and unmistakable. Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability.” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 242.) The “clear and unmistakable” test requires a “heightened standard of proof.” (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 787.)

Here, Paragraph 8 of the Employment Agreement states unambiguously that the arbitrator is to have exclusive authority to resolve any dispute, claim or grievance arising out of or relating to “the interpretation or applicability of this Agreement.”

Additionally, while not addressed by the parties, “[a]n arbitration provision's reference to, or incorporation of, arbitration rules that give the arbitrator the power or responsibility to decide issues of arbitrability may constitute clear and unmistakable evidence the parties intended the arbitrator to decide those issues.” (Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 892.) Paragraph 8 specifies that arbitration is to be in accordance with the Employment Arbitration Rules of the American Arbitration Association (“AAA”). The AAA Employment Arbitration Rules provide that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.” (Leech Decl., ¶ 3, Exh. K.)

Lastly, Defendants do not argue that the above language is revocable under any contract defense, including “fraud, duress, or unconscionability.”

The court, then, will stay Negron pending the arbitrator’s determination of the scope of his or her jurisdiction to decide the parties’ dispute.  

2.         Navarro

Here, Defendants attach copies of the “Residential Apartment Manager Employment Agreement” with PAMA, the “Arbitration Agreement -- Addendum to Employment Agreement” with PAMA, the “Residential Apartment Manager Employment Agreement” with Mobile and the “Arbitration Agreement -- Addendum to Employment Agreement” with Mobile executed by Navarro as Exhibits E-H, respectively, to the declaration of Defendants’ Human Resources Manager Sherri Wilson (“Wilson”). Again, the aforementioned Employment Agreements both provide in relevant part:

            RESIDENTIAL APARTMENT MANAGER EMPLOYMENT

AGREEMENT

 

This Employment Agreement . . . is entered into between PAMA
MANAGEMENT COMPANY [/MOBILE MANAGEMENT SERVICES INC.]

 . . . and Jesus A. Navarro (hereinafter ‘Employee’). . .

 

8.         ARBITRATION OF DISPUTE: Any dispute, claim or grievance arising

out of relating of [sic] Employee’s employment, or out of the interpretation or

applicability of this Agreement, shall be submitted to binding arbitration

pursuant to the Employment Arbitration Rules of the American Arbitration

Association. The parties hereby specifically agree to arbitrate any and all

claims arising out of Employee’s employment under this Agreement or the

termination thereof, including any and all statutory claims based on all

applicable federal and state anti-discrimination, wage payment, and other

employment laws. The parties agree to accept the Arbitrator’s award as final

and binding as to any matters properly submitted to arbitration under

Agreement.”

 

(Wilson Decl., ¶¶ 17 and 19, Exhs. E and G, p. 3, ¶ 8 [emphasis added].)

Navarro does not oppose the motion on the basis that he did not execute the aforementioned documents; rather, he opposes the motion on the basis that he did not agree to arbitrate his representative claims.

First, Defendants are seeking to compel Navarro’s individual PAGA claims only to arbitration. Second. this is an arbitrability argument. “[A] court must look to the precise nature of the claim that the party resisting arbitration is making. If it is claiming that it never agreed to the arbitration clause at all—e.g., if it is claiming forgery or fraud in the factum—then the court must consider that claim. On the other hand, if it is not denying that it agreed to the arbitration clause, but instead it is claiming some other defense to enforcement of the arbitration clause—e.g., illegality or fraud in the inducement—then the court must enforce the “arbitrability” portion of the arbitration clause by compelling the parties to submit that defense to arbitration.” (Bruni v. Didion (2008) 160 Cal.App.4th 1272, 1287.)

The court will likewise stay Navarro pending the arbitrator’s determination of the scope of his or her jurisdiction to decide the parties’ dispute.  

3.                  Payan

Again, Defendants attach copies of the “Residential Apartment Manager Employment Agreement” with PAMA and the “Arbitration Agreement -- Addendum to Employment Agreement” with PAMA, Exhibits C and D, respectively, to the Wilson. The aforementioned Employment Agreement provides in relevant part:

RESIDENTIAL APARTMENT MANAGER EMPLOYMENT

AGREEMENT

This Employment Agreement . . . is entered into between PAMA
MANAGEMENT COMPANY [/MOBILE MANAGEMENT SERVICES INC.]

 . . . and Jesus A. Navarro (hereinafter ‘Employee’). . .

 

8.         ARBITRATION OF DISPUTE: Any dispute, claim or grievance arising

out of or relating of Employee’s employment, or out of the interpretation or

applicability of this Agreement, shall be submitted to binding arbitration

pursuant to the Employment Arbitration Rules of the American Arbitration

Association. The parties hereby specifically agree to arbitrate any and all

claims arising out of Employee’s employment under this Agreement or the

termination thereof, including any and all statutory claims based on all

applicable federal and state anti-discrimination, wage payment, and other

employment laws. The parties agree to accept the Arbitrator’s award as final

and binding as to any matters properly submitted to arbitration under

Agreement.”

 

(Wilson Decl., ¶ 11, Exh. C, p. 3, ¶ 8 [emphasis added].)

The court determines that the above language presents an arbitrability question and will stay Payan pending the arbitrator’s determination of the scope of his or her jurisdiction to decide the parties’ dispute.