Judge: Peter Wilson, Case: 2022-01282080, Date: 2023-07-27 Tentative Ruling
Defendant Americor Funding, LLC seeks to compel arbitration of Plaintiff’s individual claims, including his individual PAGA claims, and dismiss his non-individual PAGA claims and class claims. In the alternative, Defendant seeks to compel arbitration of Plaintiff’s individual claims, including his individual PAGA claims, dismissing the class claims, and staying the action and remaining non-individual PAGA claims until completion of arbitration.
For the reasons which follow, the motion is DENIED.
Defendant has the initial burden of demonstrating the existence of an arbitration agreement between the parties. (Rosenthal v. Great Wester Fin. Securities Corp. (1996) 14 Cal. 394, 413; Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) Defendant presents evidence that in connection with his hiring on April 23, 2020, Plaintiff electronically signed a 3-page document entitled “Mutual Agreement to Arbitrate Claims” (Arbitration Agreement) that covers the issues in this lawsuit. ROA 29, Watkins Decl., ¶¶6, 9, 10 and Ex. A, first paragraph. Thus, Defendant has satisfied its initial burden.
Plaintiff does not dispute signing the Arbitration Agreement but contends that it is unenforceable because it was superseded twice: first by the “Applicant Statement and Agreement” (Applicant Statement) and second by the Employment Agreement. ROA 39, Opp., p. 1; ROA 29, Watkins Decl., ¶ 12 and Ex. D.
The Applicant Statement appears to be part of the Employment Application and also includes a Dispute Resolution Agreement (different from the Mutual Agreement to Arbitrate Claims relied upon by Defendant). ROA 29, Watkins Decl., ¶12 and Ex. D.
The Applicant Statement and Dispute Resolution Agreement were electronically signed by Plaintiff on April 26, 2020. The Applicant Statement provides:
I agree that, if hired, my employment is terminable at-will, is for no specific duration, and my employment may be terminated by either the Company or me at any time, with or without cause or notice. This Agreement is the entire agreement between the Company and me regarding dispute resolution, the length of my employment if hired, and the reasons for termination of employment, and this Agreement supersedes any and all prior agreements regarding these issues. … (Emphasis added).
The Dispute Resolution Agreement requires binding arbitration “to resolve all disputes that might arise out of or be related in any way to my application for employment or employment by the Company.” ROA 29, Ex. D, p. 43, ¶1.
The Employment Agreement was signed by Plaintiff on April 23, 2020, but by its express terms was effective April 27, 2020. ROA 29, Ex. D, pp. 47, 60. The Employment Agreement provides in relevant part:
51. If there is a previous employment agreement between the parties to this Agreement, the parties agree that this Agreement will replace that previous employment agreement.
52. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or written. As of the effective date of this Agreement, this Agreement supersedes all other agreements between the parties. The parties to this Agreement stipulate that neither of them has made any representations with respect to the subject matter of this Agreement except such representations as are specifically set forth in this Agreement. Each of the parties acknowledges that it has relied on its own judgment in entering into this Agreement. (Emphasis added.)
ROA 29, Ex. D, pp. 59-60.
Plaintiff contends that the Arbitration Agreement and Applicant Statement are superseded by the Employment Agreement. The Court agrees.
“It is a well settled principle of contract law that a new agreement between the same parties on the same subject matter supersedes the old agreement.” (Gabourel v. Luxottica of Am. (C.D. Cal. 2023 No. 222CV00471FWSMA) 2023 WL 3050987, at *8 [citations omitted].) The terms of a final, integrated contract may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement. (Grey v. Am. Mgmt. Servs. (2012) 204 Cal.App.4th 803, 807 (Grey); Code Civ. Proc. § 1856(a).) “When the parties to a written contract have agreed to it as an ‘integration’ — a complete and final embodiment of the terms of an agreement — parol evidence cannot be used to add to or vary its terms. … The crucial issue in determining whether there has been an integration is whether the parties intended their writing to serve as the exclusive embodiment of their agreement.” (Masterson v. Sine (1968) 69 Cal.2d 222, 225.)
In Grey, plaintiff signed an Issue Resolution Agreement (IRA) when he applied for employment with defendant and an employment agreement when he was hired. The IRA contained an arbitration provision and the employment agreement also contained an arbitration provision but with a narrower scope than the IRA and an integration clause that stated: “This Agreement is the entire agreement between the parties in connection with the Employee’s employment with [AMS], and supersedes all prior and contemporaneous discussions and understandings.” (204 Cal.App.4th at 805.) Subsequently, plaintiff filed a complaint for harassment and discrimination in superior court against defendant and defendant moved to compel arbitration based on the IRA. Plaintiff argued the employment agreement superseded the IRA. (Id. at 806.)
The Appellate Court agreed with plaintiff, finding that the integration clause was the final expression of the parties’ agreement with respect to plaintiff’s employment and supersedes the IRA. (Grey, supra, 204 Cal.App.4th at 807.) In reaching this conclusion, the Grey court pointed to the language in the integration clause that stated it was the “entire agreement” and supersedes all understandings, which the Appellate Court interpreted to include all prior agreements. (Id. at 807-808. See also, Jarboe v. Hanlees Auto Group (2020) 53 Cal.App.5th 539, 551-552 [subsequent employment agreement superseded application since integration clause in employment agreement stated: “This agreement is the entire agreement between the Company and the employee … and this agreement takes the place of all prior and contemporaneous agreements …” and also contained an exhaustive arbitration provision]; Granite Rock Co. v. Teamsters Union Local No. 890 (N.D.Cal. Nov. 20, 2012, No. C 12-02974 MEJ) 2012 WL 5877494, 2012 WL 5877494, *4 [the court found a second collective bargaining agreement, which contained a grievance procedure and integration clause, superseded an arbitration provision in an earlier collective bargaining agreement]; Cesca Therapeutics Inc. v. Syngen, Inc. (E.D.Cal. Oct. 7, 2015, No. 2:14-cv-02085-GEB-KJN) 2015 WL 5916695, *3 [subsequent terminating agreement containing an integration clause “expressly indicated a desire to forego arbitration” because it contained a provision requiring any action to be “instituted in a state or federal court in Sacramento County, California.”]; Thelen Reid Brown Raysman & Steiner LLP v. Marland (9th Cir. 2009) 319 Fed. Appx. 676, 679 [arbitration provision in a prior agreement did not apply because the parties’ second agreement provided it “replace[d] … any and all other agreements…”, which “indicated a clear intent to forego the previous arbitration provision”].)
Here, the integration clause in the Employment Agreement states it is the “entire agreement” between the parties, “there are no further items, either oral or written” and that as of the effective date, the Employment Agreement “supersedes all other agreements between the parties”. This integration clause is broader than the one in Grey because it is not limited to Plaintiff’s employment but expressly supersedes “all agreements,” as in Thelen Reid. Although the integration clause does not reference contemporaneous agreements like Grey and Jarboe, the language “there are no further items, either oral or written” and “other agreements” has a similar meaning and includes prior or contemporaneous agreements. Therefore, the Court finds that the integration clause was the final expression of the parties’ agreement.
The integration clause and the provision in the Employment Agreement that makes arbitration voluntary after participating in mediation (ROA 29, Ex. D, Employment Agreement, ¶44), indicates the intent to forego arbitration.
Defendant relies on Cione v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625 to support its argument that the Arbitration Agreement was not superseded by the Employment Agreement. ROA 41, Reply, at pp. 3-4. Cione is distinguishable.
In Cione, the parties to the arbitration agreement entered into a subsequent agreement that was silent as to the selected forum for dispute resolution. Thus, the Cione court found that the obligation to arbitrate is not superseded even if the subsequent agreement is integrated. (Cione v. Foresters Equity Servs., Inc., supra, 58 Cal.App.4th at 637-639 [“Absent any showing that his written employment agreement ... was either expressly or implicitly inconsistent with his arbitration obligation under [the prior agreement], [plaintiff] may not rely on the written employment agreement's silence about dispute resolution to establish that such agreement superseded his obligation to arbitrate.”)
Here, unlike the subsequent agreement in Cione, the Employment Agreement is not silent as to the forum for disputes. ROA 29, Ex. D, Employment Agreement, ¶44. The integration clause states that neither of the parties “has made any representations with respect to the subject matter of this Agreement except such representations as are specifically set forth in this Agreement.” ROA 29, Ex. D, Employment Agreement, ¶52. Since the Employment Agreement contains a provision on disputes, including the forum for disputes, which conflicts with the mandatory arbitration required in the Arbitration Agreement, the Employment Agreement is not silent on this issue and was intended to supersede the Arbitration Agreement. The Employment Agreement also contains attorney fees and costs provisions entirely inconsistent with the Arbitration Agreement. Finally regarding Cione, the contractual language there did not, as here, expressly reference that all prior agreements between the parties, of whatever kind, were superseded.
Defendant also argues that the Arbitration Agreement and Employment Agreement govern different aspects of Plaintiff’s employment with Defendant. ROA 41, Reply, p. 4. This argument is contrary to the express terms of the integration clause in the Employment Agreement. As discussed, the integration clause states the Employment Agreement is the “entire agreement” between the parties and supersedes “all other” agreements. There is no attempt to parse out certain aspects of the employment relationship between the parties.
The Motion is DENIED.
The Court sets a status conference on October 27, 2023 at 9 a.m. and the parties are ordered to file a joint status report not later than October 20, 2023.
Defendant is ordered to give notice.