Judge Robert B. Broadbelt, Case Number: 23STCV16325, Date: 2024-03-18 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 23STCV16325, Date: 2024-03-18 Tentative Ruling

Tentative rulings are sometimes, but not always, posted. The purpose of posting a tentative ruling is to to help focus the argument. The posting of a tentative ruling is not an invitation for the filing of additional papers shortly before the hearing.

MOVING PARTIES: Defendant CitiStaff Solutions Inc. (joined by defendant Junction Transfer & Warehousing, LLC on September 11, 2023)

The court considered the moving, joinder, opposition, and reply papers filed in connection with this motion.

Defendant CitiStaff Solutions Inc. (“CitiStaff”), joined by defendant Junction Transfer & Warehousing, LLC (“Junction”) (collectively, “Defendants”) move the court for an order (1) compelling plaintiff Ulises Gonzalez (“Plaintiff”) to submit the claims alleged in his Complaint to binding arbitration, and (2) dismissing or, alternatively, staying this action pending completion of arbitration.

As a threshold matter, the parties dispute whether the arbitration agreements are enforceable pursuant to the Federal Arbitration Act (“FAA”) (9 U.S.C. § 1 et seq.). In its moving papers, defendant CitiStaff (1) contends that the FAA applies, and (2) has introduced evidence establishing that it is involved in interstate commerce to support its position. (Slater Decl., ¶¶ 2 [CitiStaff provides temporary workers to companies in California, Washington, and Texas, and its customers are engaged in various industries that manufacture goods that are distributed and shipped to other states], 3 [defendant Junction Collaborative Transports, to which Plaintiff was assigned, is a trucking and logistics company involved in transport and shipping of goods in and out of California]; Cerdas Decl., ¶¶ 2-3.) In opposition, Plaintiff asserts that he belongs to a class of workers that is subject to a statutory exemption to the FAA.

The court finds that Plaintiff has shown that he belongs to a “class of workers engaged in foreign or interstate commerce” and therefore has shown that the arbitration agreements at issue in Defendants’ motion and joinder are not enforceable under the FAA. (9 U.S.C. § 1.)

“Federal law applies to arbitration provisions in contracts involving interstate commerce.” (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247; 9 U.S.C. § 2.) However, “[s]ection 1 of the FAA exempts from coverage of the FAA ‘contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.’ [Citations.] This ‘ “any other class of workers engaged in foreign or interstate commerce” ’ has been defined to mean ‘transportation workers.’” (Garrido v. Air Liquide Industrial U.S. LP (2015) 241 Cal.App.4th 833, 839 [internal citations omitted]; 9 U.S.C. § 1 [“nothing herein shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce”].) Further, “any class of workers directly involved in transporting goods across state or international borders falls within [section] 1’s exemption.” (Southwest Airlines Co. v. Saxon (2022) 596 U.S. 450, 457.) “Unlike section 2’s reference to ‘involving commerce,’ which ‘indicates Congress’ intent to regulate to the outer limits of its authority under the Commerce Clause’ and thus is afforded an ‘expansive reading,’ section 1’s reference to ‘engaged in commerce’ is ‘narrower,’ and therefore ‘understood to have a more limited reach,’ requiring ‘a narrow construction’ and a ‘precise reading.’” (Muller v. Roy Miller Freight Lines, LLC (2019) 34 Cal.App.5th 1056, 1062; Southwest Airlines Co., supra, 596 U.S. at p. 458 [“transportation workers must be actively ‘engaged in transportation’ of those goods across borders via the channels of foreign or interstate commerce’”].)

Plaintiff has submitted his declaration, in which he states that (1) he was rehired by CitiStaff in July 2022; (2) he was assigned to work for joining defendant Junction, which then assigned Plaintiff to work at its Junction Collaborative Transports facility in Long Beach; and (3) while he worked for Junction at the Junction Collaborative Transports facility, his “primary duty was to operate machinery to move containers loaded with goods and [to] prep[are] them so that they were ready to be picked up by truck drivers tasked with their delivery.” (Gonzalez Decl., ¶¶ 2, 7.)

The court finds that this evidence shows that, in moving and preparing containers loaded with goods to be later picked up by truck drivers, Plaintiff (1) works with and prepares containers of goods to be picked up by truck drivers for delivery,[1] and therefore (2) belongs to a class of workers that play “a direct and necessary role in the free flow of goods across borders” and are “actively engaged in transportation of such goods.” (Ortiz v. Randstad Inhouse Services, LLC (9th Cir. Mar. 12, 2024) 2024 WL 1061287 at *6 [internal quotation marks omitted]; Ibid. [finding that the plaintiff “fulfilled an admittedly small but nevertheless ‘direct and necessary’ role in the interstate commerce of goods” by “ensur[ing] that goods would reach their final destination by processing and storing them while they awaited further interstate transport”]; Southwest Airlines Co., supra, 596 U.S. at p. 457 [“any class of workers directly involved in transporting goods across state or international borders falls within § 1’s exemption”].)

Thus, the court finds that Plaintiff qualifies for the transportation worker exemption set forth in section 1 of the FAA, and that Defendants therefore cannot enforce the arbitration agreements against Plaintiff pursuant thereto.

The court therefore evaluates CitiStaff’s motion (and the joinder filed by defendant Junction) under California law. (Muller, supra, 34 Cal.App.5th at pp. 1070-1071 [finding that the plaintiff-employee was a transportation worker exempt from FAA coverage and stating that, “[b]ecause the FAA is inapplicable, [the] analysis is exclusively guided by California law”]; Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 763 [because the parties agreed that the plaintiff was a transportation worker within the meaning of section 1 of the FAA and, therefore, the FAA did not apply, the court “analyze[d] the issues presented under the [California Arbitration Act] and California law”].)

“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 the court finds that the right to compel arbitration has been waived by the petitioner or that grounds exist for rescission of the agreement.¿ (Code Civ. Proc., §¿1281.2.)¿¿¿

“‘ “The party seeking to compel arbitration bears the burden of proving the existence of an arbitration agreement, while the party opposing the petition bears the burden of establishing a defense to the agreement’s enforcement.” ’”¿ (Beco v. Fast Auto Loans (2022) 86 Cal.App.5th 292, 302.)¿ To determine the existence of an agreement, the court uses “a three-step burden-shifting process.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755.) “The arbitration proponent must first recite verbatim, or provide a copy of, the alleged agreement. [Citations.] A movant can bear this initial burden ‘by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature.’” (Ibid. [internal citations omitted].) “If the movant bears its initial burden, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement’s existence . . . .” (Ibid.) If the opposing party meets its burden to “submit sufficient evidence to create a factual dispute” as to the existence of the agreement, the burden shifts back to the arbitration proponent, who retains the ultimate burden of proving its existence by a preponderance of the evidence. (Ibid.; Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165-166.)

First, the court finds that CitiStaff has met its burden of producing prima facie evidence of a written agreement to arbitrate between Plaintiff, on the one hand, and CitiStaff on the other hand, by submitting two arbitration agreements purporting to bear Plaintiff’s signature.

CitiStaff has submitted the following arbitration agreements: (1) the Arbitration Agreement signed by Plaintiff and an authorized representative of CitiStaff on November 28, 2018 (the “2018 Arbitration Agreement”), and (2) the Arbitration Agreement signed by Plaintiff and an authorized representative of CitiStaff on July 5, 2022 (the “2022 Arbitration Agreement”) (collectively, the “Arbitration Agreements”). (Slater Decl., Exs. 1 [2018 Arbitration Agreement in Spanish], 2 [translated copy of 2018 Arbitration Agreement], 3 [2022 Arbitration Agreement].) Both agreements include an agreement to arbitrate between (1) CitiStaff, as employer, (2) CitiStaff’s clients, officers, employees, or agents, as employer, and (3) Plaintiff, as employee. (Slater Decl., Exs. 1-2, p. 1 [2018 Arbitration Agreement], Ex. 3, p. 1 [2022 Arbitration Agreement].)

Specifically, the 2018 Arbitration Agreement provides that, in consideration of employment or continued employment with CitiStaff, the parties “agree[d] to participate exclusively in mandatory binding arbitration for all disputes, claims or controversies (‘claims’) that may arise between them, including their current and former agents, owners, officers, directors, or employees, arising from the employment relationship between the Employee and the Employer or its termination.” (Slater Decl., Exs. 1, 2, p. 1, ¶ 3.) The covered claims included claims brought pursuant to the California Fair Employment and Housing Act and for wrongful discharge. (Id., ¶ 4.) Similarly, the 2022 Arbitration Agreement provides that the parties “agree to exclusively engage in a final binding Arbitration for any and all disputes, claims, or controversies (‘Claims’) they may have against each other, employer’s customer, including their current and former agents, owners, officers, directors, or employees, arising from the employment relationship between Employee and Employer or the termination thereof.” (Slater Decl, Ex. 3, p. 1, ¶ 3.) The covered claims specifically include those brought pursuant to the California Fair Employment and Housing Act and for wrongful discharge. (Id., ¶ 4.)

Second, the court finds that CitiStaff has shown that the Arbitration Agreements encompass the claims alleged by Plaintiff in his Complaint because (1) as set forth above, both agreements apply to claims arising from the employment relationship between CitiStaff and Plaintiff, including those brought pursuant to the California Fair Employment and Housing Act and for wrongful discharge, and (2) Plaintiff’s causes of action (i) arise from his employment with CitiStaff (and Junction) and (ii) are alleged pursuant to the California Fair Employment and Housing Act (the first through fifth causes of action) and for wrongful termination (the sixth cause of action). (Compl., ¶¶ 8, 22.)

Thus, the court finds that CitiStaff has met its burden to produce prima facie evidence of two agreements to arbitrate the controversy alleged in Plaintiff’s Complaint.

Third, the court finds that joining defendant Junction has met its burden to show that it may enforce the Arbitration Agreements against Plaintiff (1) pursuant to the language of the Arbitration Agreements since (i) the Arbitration Agreements assert that they were made by and between the employee (i.e., Plaintiff), CitiStaff, and CitiStaff’s clients (or customers) and agents, and (ii) Plaintiff was assigned to work with Junction at its facility in Long Beach, California, such that Junction is a client or agent of CitiStaff, and (2) pursuant to the agency exception, because Plaintiff has alleged that Junction and CitiStaff were agents of the other and joint employers. (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236-1239 [exceptions to rule that one must be a party to an arbitration agreement to invoke it]; Slater Decl., Exs. 1-2, p. 1, ¶ 1 [2018 Arbitration Agreement], 3 p. 1, ¶ 1 [2022 Arbitration Agreement]; Cerdas Decl., ¶ 5; Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 788 [defendant may enforce the arbitration agreement “‘when a plaintiff alleges a defendant acted as an agent of a party to an arbitration agreement”]; Compl., ¶¶ 13 [alleging agency], 10 [alleging that Defendants were joint employers], 8.)

Fourth, the court finds that Plaintiff has not met his burden to identify a factual dispute as to the existence of the Arbitration Agreements.

Plaintiff does not dispute that he signed the 2018 Arbitration Agreement. (Gonzalez Decl., ¶ 2; Opp., p. 2:11-15.) Plaintiff also does not appear to dispute that he signed the 2022 Arbitration Agreement, asserting that (1) he was presented with documents by CitiStaff, which he signed, but (2) he does not recall seeing the 2022 Arbitration Agreement and is unable to read it because it is completely in English. (Gonzalez Decl., ¶¶ 3 [“I signed [the documents] because I believed them to be a prerequisite to my employment”], 4-5.) Instead, it appears that Plaintiff is relying on this evidence to argue that the 2022 Arbitration Agreement is unconscionable. (Opp., p. 6:16-22 [arguing that the 2022 Arbitration Agreement is procedurally unconscionable because, inter alia, he could not understand it].) Plaintiff has not argued that his inability to read the 2022 Arbitration Agreement renders it invalid for any other reason (e.g., that there exists no mutual assent).

To the extent that Plaintiff contends that the 2022 Arbitration Agreement is not authentic based on this evidence, the court finds that Plaintiff’s declaration is insufficient to establish a factual dispute as to the authenticity of the 2022 Arbitration Agreement since he has “explicitly acknowledge[d]” that he signed documents presented to him upon his rehire by CitiStaff in his declaration and appears to concede, in his opposition, that he signed the 2022 Arbitration Agreement. (Iyere, supra, 87 Cal.App.5th at p. 756 [noting that the plaintiffs’ declarations expressly acknowledged signing a stack of documents and did not deny that the stack included the arbitration agreement]; Gonzalez Decl., ¶ 3; Opp., p. 3:3-5.)

Thus, the court finds that Defendants have shown that (1) there exist two arbitration agreements to arbitrate the controversy alleged in Plaintiff’s Complaint, and (2) Defendants may enforce the Arbitration Agreements against Plaintiff either as a signatory thereto (CitiStaff) or pursuant to an exception as a nonsignatory (Junction).

“‘[A]greements to arbitrate [may] be invalidated by “generally applicable contract defenses, such as fraud, duress, or unconscionability.” ’” (Beco, supra, 86 Cal.App.5th at p. 302.) “The burden of proving unconscionability rests upon the party asserting it.”¿ (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126 (Kho).)¿ “Unconscionability entails an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.” (Iyere, supra, 87 Cal.App.5th at p. 759 [internal quotations omitted].) It “‘has both a “procedural” and a “substantive” element,’ the former focusing on ‘oppression’ or ‘surprise’ due to unequal bargaining power, the latter on ‘overly harsh’ or ‘one-sided’ results.”¿ (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 [citations omitted].)¿ “As a matter of general contract law, California courts require both procedural and substantive unconscionability to invalidate a contract.”¿ (Torrecillas v. Fitness International, LLC (2020) 52 Cal.App.5th 485, 492 (Torrecillas).)¿ Courts “apply a sliding scale, meaning if one of these elements is present to only a lesser degree, then more evidence of the other element is required to establish overall unconscionability.¿ In other words, if there is little of one, there must be a lot of the other.”¿ (Ibid.)¿¿¿¿

The court finds that Plaintiff has not met his burden to prove that the Arbitration Agreements are unconscionable. As set forth above, to invalidate a contract, unconscionability requires a showing of “both procedural and substantive unconscionability . . . .” (Torrecillas, supra, 52 Cal.App.5th at p. 492 [emphasis added].) In his opposition, Plaintiff has addressed only procedural unconscionability, and has not submitted evidence or argument to establish substantive unconscionability. (Opp., pp. 5:1-6:28.) Thus, the court finds that Plaintiff has not met his burden to show that the Arbitration Agreements are unconscionable and therefore unenforceable. (Torrecillas, supra, 52 Cal.App.5th at p. 492; Kho, supra, 8 Cal.5th at p. 126.)

For the reasons set forth above, the court finds that (1) CitiStaff met its burden of proving that there exist two valid agreements to arbitrate the controversy alleged in Plaintiff’s Complaint, (2) Junction has met its burden to prove that it may enforce the Arbitration Agreements against Plaintiff, and (3) Plaintiff has not met his burden to show that the Arbitration Agreements are not authentic or are invalid or unenforceable. The court therefore grants Defendants’ motion to compel arbitration.[2]

The court also grants Defendants’ motion to stay this action pending completion of arbitration. (Code Civ. Proc., § 1281.4.)

The court grants (1) defendant CitiStaff Solutions, Inc.’s motion to compel arbitration, and (2) defendant Junction Transfer & Warehousing, LLC’s joinder to motion to compel arbitration.

The court orders (1) plaintiff Ulises Gonzalez and defendants CitiStaff Solutions, Inc. and Junction Transfer & Warehousing, LLC to arbitrate the claims alleged in plaintiff Ulises Gonzalez’s Complaint, and (2) this action is stayed against defendants CitiStaff Solutions, Inc. and Junction Transfer & Warehousing, LLC until arbitration is completed.

The court sets an Order to Show Cause re completion of arbitration as to defendants CitiStaff Solutions, Inc. and Junction Transfer & Warehousing, LLC for hearing on October 22, 2024, at 8:30 a.m., in Department 53.

The court orders defendant CitiStaff Solutions, Inc. to give notice of this ruling.

[1] CitiStaff’s evidence establishes that Junction Collaborative Transports is involved in the “shipping of goods in and out of California.” (Slater Decl., ¶ 3.)

[2] The court notes that it appears that CitiStaff requests that the court order Plaintiff to submit his claims against all named defendants to arbitration. (Mot., pp. 12:1-27 [asserting that nonmoving defendant Junction Collaborative Transports is entitled to move to compel arbitration pursuant to the Arbitration Agreements], 14:2-5 [stating that, because “all of Plaintiff’s claims against all Defendants are subject to arbitration,” CitiStaff requests that “the parties” be ordered to arbitration]; Reply, p. 10:10-12, 10:20-22 [CitiStaff requests that the court compel Plaintiff “to submit his claims against all Defendants” to arbitration] [emphasis added].) CitiStaff does not have standing to move the court for an order compelling Plaintiff to submit his claims to arbitration against nonmoving defendants.

ulises gonzalez ; Plaintiff, vs. citistaff solutions , et al.; Defendants.	Case No.:	23STCV16325

	Hearing Date:	March 18, 2024

	Time:	10:00 a.m.

	[Tentative] Order RE: defendant’s motion to compel arbitration