Judge: Teresa A. Beaudet, Case: 23STCV03269, Date: 2024-01-09 Tentative Ruling
Case Number: 23STCV03269 Hearing Date: January 9, 2024 Dept: 50
HECTOR M. BARRAZA-BENITEZ,
individually, and on behalf of all other aggrieved employees, Plaintiff, vs. DMCG, INC., et al. Defendants. |
Case No.: |
23STCV03269 |
Hearing Date: |
January 9, 2024 |
|
Hearing
Time: 10:00 a.m. [TENTATIVE] ORDER
RE: DEFENDANTS DMCG,
INC.’S AND BAIL HOTLINE BAIL BONDS, INC.’S MOTION TO COMPEL ARBITRATION AND
STAY PROCEEDINGS |
Background
On February 14, 2023, Plaintiff Hector M. Barraza-Benitez, individually,
and on behalf of all other aggrieved employees (“Plaintiff”) filed the instant
PAGA Representative Action Complaint Pursuant to the Private Attorneys General
Act against Defendants DMCG, Inc. (“DMCG”) and Bail Hotline Bail Bonds, Inc. (“Bail
Hotline”) (jointly, “Defendants”). The
Complaint alleges claims under the Private Attorneys General Act.
Defendants now move for
an order compelling Plaintiff “to participate in arbitration of his
individual claims under the Private Attorney General Act (‘PAGA’) and stay the
representative PAGA claims pending the resolution of the claims at arbitration.” Plaintiff opposes.
Evidentiary
Objections
The Court rules on
Defendants’ evidentiary objections to the Declaration of Daniel J. Bass as
follows:
Objection No. 1: overruled
Objection No. 2:
overruled
The Court rules on
Defendants’ evidentiary objections to the Declaration of Hector M. Barraza-Benitez as follows:
Objection No. 1:
overruled
Objection No. 2:
overruled
Objection No. 3:
overruled
Objection No. 4:
overruled
Objection No. 5:
overruled
Objection No. 6:
overruled
Legal Standard
In a motion to compel
arbitration, the moving party must prove by a preponderance of evidence the existence
of the arbitration agreement and that the dispute is covered by the agreement.
The burden then shifts to the resisting party to prove by a preponderance of
evidence a ground for denial (e.g.,
fraud, unconscionability, etc.). ((Rosenthal
v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413-414.)
Generally, on a petition
to compel arbitration, the court must grant the petition 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.)
“California has a strong
public policy in favor of arbitration and any doubts regarding the
arbitrability of a dispute are resolved in favor of arbitration.” ((Coast Plaza Doctors Hospital v. Blue Cross of
California (2000) 83 Cal.App.4th
677, 686.) “This strong policy has
resulted in the general rule that arbitration should be upheld unless it can be
said with assurance that an arbitration clause is not susceptible to an
interpretation covering the asserted dispute.” ((Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring
arbitration agreements under the Federal Arbitration Act (“FAA”), which governs
all agreements to arbitrate in contracts “involving interstate commerce.” (9 U.S.C. § 2, et
seq.; (Higgins
v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)
Discussion
A. Existence of Arbitration Agreement
In the Complaint, Plaintiff alleges that he “was
employed as a bail agent at Defendants’ South Broadway location in Los Angeles
and Valley Boulevard location in El Monte.” (Compl., ¶ 19.) Defendants provide
evidence that Bail Hotline is a subsidiary of DMCG. (Maglanque
Decl., ¶ 2.) Defendants state that Plaintiff was employed by DMCG. (Maglanque Decl., ¶ 2.) Plaintiff was hired around June 27,
2019, as a bail assistant at one of DMCG’s Los Angeles offices (referred to
internally as the 77th Office). (Maglanque
Decl., ¶ 5.)
Defendants submit the Declaration of Sheryl Maglanque, the Human
Resources Manager of DMCG. (Maglanque Decl., ¶ 1.) Ms.
Maglanque states that “[o]n or about June 27, 2019, I was provided Plaintiffs
information by Gilbert McGuire, one of DMCG’ s Directors, and I called
Plaintiff on June 27, 2019. 1 verbally made the offer and when he accepted, I explained
that he would receive the Employment Packet via DocuSign. I went over
everything in the packet, including the Arbitration Agreement, asked if he had
any questions, and obtained his email address. I then emailed the Employment
Packet around 4:27 pm on June 27, 2019.” (Maglanque
Decl., ¶ 11.)
Ms. Maglanque states that “[f]rom the DocuSign’s certificate of
completion, it appears that Plaintiff reviewed and signed the various documents
between June 27 and June 28.” (Maglanque Decl., ¶ 12.)
She further states that “[a] true and correct copy of the Arbitration Agreement
that Plaintiff and I executed is attached as Exhibit B to Adreani Decl.” (Maglanque Decl., ¶ 12.) Exhibit “B” to the Declaration of
Michael B. Adreani is a document titled “Mediation and Arbitration Agreement.”
(Adreani Decl., ¶ 5, Ex. B.) The Mediation and Arbitration Agreement provides, inter
alia, as follows:
“The parties
agree that all references to the ‘Employer’ in this Agreement shall include and
all of its subsidiary and affiliated entities, including all former, current
and future officers, directors and employees of all such entities, in their
capacity as such or otherwise; all benefit plans and their sponsors,
fiduciaries, administrators, affiliates and agents, in their capacity as such
and otherwise; and all successors and assigns of any of them. Except as
otherwise provided in this Agreement, the Employer and the Employee hereby
consent to the resolution by binding arbitration of all claims or controversies
for which a federal or state court or other dispute resolution body otherwise
would be authorized to grant relief, whether or not arising out of, relating to
or associated with the Employee’s employment or wages with the Company, that
the Employee may have against the Company or that the Company may have against
the Employee.
Claims covered
by this Agreement include, but are not limited to, claims for wages or other
compensation due; claims for breach of any contract or covenant, express or
implied; tort claims; claims for discrimination or harassment on bases which
include but are not limited to race, sex, sexual orientation, religion,
national origin, age, marital status, disability or medical condition; claims
for benefits, except as excluded in paragraph 6; and claims for violation of
any federal, state or other governmental constitution, statute, ordinance,
regulation, or public policy including but not limited to any laws, codes, or
acts and their California equivalents. The purpose and effect of this Agreement
is to substitute arbitration as the forum for resolution of the Claims; all
responsibilities of the parties under the statutes applicable to the Claims
shall be enforced. We both understand and agree that we are entering into this
Agreement voluntarily, and that this Agreement provides for the waiver of our
respective rights to a trial by jury on the claims covered by this Agreement.”
(Adreani Decl., ¶ 5, Ex. B, § 2.)
As set forth above, Defendants state that Bail Hotline is a subsidiary
of DMCG. (Maglanque Decl., ¶ 2.) Defendants state that Plaintiff “was not hired
by, nor did he work for Bail Hotline. He was employed by DMCG.” (Maglanque
Decl., ¶ 2.) Defendants assert that “[t]o the extent Bail Hotline is consider
[sic] to be Plaintiff’s employer, it is a third-party beneficiary of the
Arbitration Agreement, as term ‘Employer’ includes subsidiaries of DMCG.” (Mot. at p. 1, fn. 2., citing Adreani Decl., ¶ 5, Ex. B, §
2.) Plaintiff does not dispute this point in the opposition.
In the opposition, Plaintiff does not appear to argue
that he did not sign the subject Mediation and Arbitration Agreement. Plaintiff also does not dispute that the Mediation and Arbitration Agreement covers the claims alleged against
Defendants in the Complaint. Therefore, the burden now shifts
to Plaintiff to prove a ground for denial.
B. Grounds to Deny
Arbitration: Unconscionability
Plaintiff asserts that “even if Plaintiff
signed the arbitration clause, the purported agreement is unconscionable.”
(Opp’n at p. 8:23-24.)
i. Procedural
Unconscionability
Procedural unconscionability concerns the
manner in which the contract was negotiated and the parties’ circumstances at
that time. It focuses on the factors of oppression or surprise. ((Kinney v. United Healthcare Servs. (1999) 70 Cal.App.4th 1322, 1329.) “Oppression generally takes the form of a
contract of adhesion, which, imposed and drafted by the party of superior
bargaining strength, relegates to the subscribing party only the opportunity to
adhere to the contract or reject it.” ((Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 84 [quotations
and citations omitted].) Surprise occurs “where
the allegedly unconscionable provision is hidden within a prolix printed form.”
((Pinnacle Museum Tower Assn. v. Pinnacle
Market Development, LLC (2012) 55
Cal.4th 223, 247.)
Plaintiff contends that the “arbitration
provision” is procedurally unconscionable.
Plaintiff asserts that “the documents Plaintiff supposedly signed are
given to prospective employees of Defendants on a take it or leave it basis
with no potential for negotiation. Indeed, Defendants’ own Declarant confirms
that the process of signing the documents occurs before an employee even begins
working for Defendants.” (Opp’n at p. 10:9-12.)
Plaintiff points to the Declaration of Sheryl Maglanque, in which she
states, inter alia, that “[o]nce a decision is made to hire [sic]
candidate, his or her information is then forwarded to the HR Department.”
(Maglanque Decl., ¶ 6.) Ms. Maglanque states that “I or another staff member
from the HR Department contacts the candidate on the telephone and an offer is
verbally made along with a tentative start date. The staff member explains the
positions, the pay, and all the documents that the candidate needs to sign. If
the candidate accepts the offer verbally, we will instruct them to complete and
send us an application if one had not been submitted prior to the interview. In
addition to the application, the candidate will receive an Employment Packet.
The Employment Packet consists of the Summary of Compensation and Benefits,
California Meal Breaks & Penalties, Non-Disclosure and Non-Compete
Agreement, Mediation and Arbitration Agreement (‘Arbitration Agreement’), and
Authorization to run a background check. The staff member explains each of
these documents to the candidate on the initial call.” (Maglanque Decl., ¶ 7.) Ms.
Maglanque states that “[d]uring that initial call, the staff member from the HR
Department instructs the candidate to read all the documents, inquires whether
the candidate requires additional time to review the documents, inquires
whether the candidate has any questions, and requests the candidate’s email
address. After the initial call concludes, the HR Department emails the
Employment Packet along with an application, if necessary, via DocuSign to the
candidate.” (Maglanque Decl., ¶ 8.) Ms. Maglanque indicates that “[o]nce DMCG
receives the application and Employment Packet from the candidate, I sign all
the necessary agreements and acknowledgments via DocuSign, and initiates [sic] the
background check. When the background check is cleared, we confirm the start
date with the candidate.” (Maglanque Decl., ¶ 9.)
Plaintiff also asserts that “there is no indication that Plaintiff was
free to reject any documents and work for Defendants.” (Opp’n at p. 10:14-15.) In
his supporting declaration, Plaintiff states that “to begin my work for
Defendants I was required to sign a package of documents sent to me
electronically. I have reviewed the declarations submitted by Defendants in
support of its Motion as well as the exhibits attached thereto. Though I do not
recall signing these documents specifically, I do remember being required to
electronically sign a packet of documents electronically to begin my work.
These documents were not explained to me either before being sent or when I
began work as Defendants’ declarations claim. Rather I was told to sign them to
start work and that my copies of them would be the electronic versions I
signed.” (Barraza-Benitez Decl., ¶ 5.) Plaintiff further states that “[f]rom
what I recall of the electronic signature process Defendants utilized I was not
able to pick and choose what I signed, but instead I was required to approve
signing each document in the packet of documents on an all or nothing basis.
Moreover, I was never given the opportunity to negotiate the terms of the
documents presented to me, I was simply required to sign them, as is, to work
for the Defendants.” (Barraza-Benitez Decl., ¶ 6.)
Defendants assert that the subject Mediation and Arbitration Agreement
is not procedurally unconscionable. They point to the Declaration of Sheryl Maglanque,
in which she states that “[d]uring that initial call, the staff member from the
HR Department instructs the candidate to read all the documents, inquires
whether the candidate requires additional time to review the documents,
inquires whether the candidate has any questions, and requests the candidate’s
email address.” (Maglanque Decl., ¶ 8.)
Defendants assert that “Plaintiff does not claim that he wanted to
negotiate the Arbitration Agreement or that he would have rejected the position
because of the Arbitration Agreement. In fact, he had a copy of the Arbitration
Agreement and received a few days to review the agreement at his leisure and
signed it a day after receiving the employment packet.” (Reply at p. 1:18-22.) Ms.
Maglanque states that “I called Plaintiff on June 27, 2019. 1 verbally made the
offer and when he accepted, I explained that he would receive the Employment
Packet via DocuSign.” (Maglanque Decl., ¶ 11.) Ms. Maglanque further states
that “[f]rom the DocuSign’s certificate of completion, it appears that
Plaintiff reviewed and signed the various documents between June 27 and June
28.” (Maglanque Decl., ¶ 12.)
The
Court also notes that “[w]hen … there is no other indication of oppression or
surprise, ‘the degree of procedural unconscionability of an adhesion agreement
is low, and the agreement will be enforceable unless the degree of substantive
unconscionability is high.’¿” (Serpa ¿v. California Surety Investigations, Inc.
(2013) 215 Cal.App.4th 695, 704¿¿¿.)¿¿Based on the foregoing, the Court
finds that there is a low level of procedural unconscionability.¿¿
ii.
Substantive Unconscionability
Plaintiff also asserts that the “arbitration
provision” is substantively unconscionable. “Substantive unconscionability pertains to the
fairness of an agreement’s actual terms and to assessments of whether they are
overly harsh or one-sided. A contract term is not substantively unconscionable
when it merely gives one side a greater benefit; rather, the term must be so
one-sided as to shock the conscience.” (Carmona v. Lincoln Millennium Car Wash, Inc., supra, 226
Cal.App.4th at p. 85 [internal quotations and citation omitted].)
Plaintiff cites to Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th
482, 485-486, where “Jennifer Playu Alberto, the
respondent, is a former employee of appellant Cambrian Homecare. When she was
hired, Alberto signed a written arbitration agreement. Alberto brought
wage-and-hour claims against Cambrian. Cambrian petitioned for arbitration. The
trial court denied the petition. The trial court found that even if the
parties had formed an arbitration agreement, the agreement had unconscionable
terms, terms that so permeated the agreement they could not be severed.” The
Court of Appeal affirmed.
“Cambrian hired Alberto on or about September
17, 2019. That same day, as part of her orientation, a Cambrian representative
gave her agreements to sign. Three of those agreements relate to resolution of
potential disputes: a ‘Dispute Resolution Process—Arbitration Agreement’
(Arbitration Agreement), a ‘Confidentiality Agreement,’ and a ‘Confidentiality
Agreement Addendum’ (Addendum).” ((Id. at p. 486.) The Court concluded
that “the Arbitration Agreement and the
Confidentiality Agreement should be read together. They were executed on the
same day. They were both separate aspects of a single primary
transaction—Alberto’s hiring. They both governed, ultimately, the same
issue—how to resolve disputes arising between Alberto and Cambrian
arising from Alberto’s employment. Failing to read them together
artificially segments the parties’ contractual relationship.” ((Id. at pp. 490-491.)
The Alberto Court concluded, inter alia, that “[h]ere, the trial court found
the Confidentiality Agreement’s injunction provisions made the parties’ agreement
to arbitrate insufficiently mutual. The Arbitration Agreement required Alberto
to arbitrate all of her claims against Cambrian. But the
Confidentiality Agreement allowed Cambrian to obtain—outside of arbitration—an ‘immediate’
injunction for Alberto’s breach of Cambrian’s confidentiality requirements…The trial court’s finding was
well supported by California law.” (Alberto v. Cambrian
Homecare, supra, 91
Cal.App.5th at p. 492.)
Plaintiff
asserts that here, “just as in Alberto, Defendants’
confidentiality agreement allows for Defendants to seek injunctive relief in a
court rather than arbitration.” (Opp’n at p. 12:4-5.) In his supporting
declaration, Plaintiff’s counsel states that “[w]hen Defendants produced
Plaintiff’s personnel file it included what appears to be the entirety of the
‘Employment Packet’ described by Defendants’ declarant Sheryl Maglanque. This
Employment packet includes a document entitled ‘Non-Disclosure and Non-Compete
Agreement’ and several other documents allegedly signed concurrently with
Defendants’ purported Arbitration Agreement. A true and correct copy of the
‘Non-Disclosure and Non-Compete Agreement’ produced by Defendants is attached
hereto as ‘Exhibit A.’” (Bass Decl., ¶ 4, Ex. A.) Section
8 of the subject Non-Disclosure and Non-Compete Agreement provides, inter
alia, that “[t]he Employee acknowledges that disclosure of any Confidential
Information or breach of any of the non-competitive covenants or agreements
contained herein will give rise to irreparable injury to Company or clients of
Company, inadequately compensable in damages. Accordingly, Company or, where
appropriate a client of Company, may seek and obtain injunctive relief against
the breach or threatened breach of the foregoing undertakings, in addition to
any other legal remedies which may be available.” (Bass Decl., ¶ 4, Ex. A, § 8.)
In the reply, Defendants assert that “[e]ven though the NDA only
provides the right to injunctive relief to Defendant and its clients, there is
no prohibition on Plaintiff seeking injunctive relief. Further, the NDA seeks
to protect Defendant and its client’s trade secrets, therefore, under the NDA,
only Defendant would need to seek injunctive relief.” (Reply at p. 4:15-18.) Defendants
also note that Section 7 of the Mediation and
Arbitration Agreement provides, inter alia, that “[t]his Agreement does
not apply to…claims for injunctive and/or other equitable relief for
intellectual property violations, unfair competition and/or the use and/or
unauthorized disclosure of trade secrets or confidential information…” (Adreani
Decl., ¶ 5, Ex. B, § 7.)
Plaintiff
notes that the Court of Appeal in Alberto also noted that “[t]he trial court found the Confidentiality Agreement’s
prohibition on discussing wages unconscionable. As we describe above, the
Confidentiality Agreement treated ‘compensation and salary data and other
employee information’ as a supposed ‘trade secret’ that Alberto could be
enjoined from discussing.” (Alberto
v. Cambrian Homecare, supra, 91 Cal.App.5th at p. 493.) The Court of
Appeal noted that “[t]he Labor Code provides that ‘No employer
may do any of the following:…(a) Require, as a condition of employment, that an
employee refrain from disclosing the amount of his or her wages…(b) Require an
employee to sign a waiver or other document that purports to deny the
employee the right to disclose the amount of his or her wages…(c) Discharge,
formally discipline, or otherwise discriminate against an employee who
discloses the amount of his or her wages.’ (Lab.
Code, § 232.) The Confidentiality Agreement on its face violated the Labor
Code. A facially illegal provision, in direct contravention of the Labor Code,
is unconscionable.” (Ibid.)
Plaintiff contends
that here, “just like in Alberto, the confidentiality
agreement uses sweeping definitions of ‘trade secrets’ to include even greater
categories of information that [sic] the ‘compensation and salary data and
other employee information’ in contravention of Labor
Code section 232.’” (Opp’n at p. 12:9-12.) Plaintiff notes that Section 1 of the Non-Disclosure and Non-Compete
Agreement here provides, inter alia, that “[e]mployee recognizes and
acknowledges that the systems which Company owns, plans or develops, whether
for its own use or for use by its clients, are confidential and are the
property of Company…All communications, including but not limited to any
meetings, conferences and all written correspondence or verbal communication
regarding any type of company strategic or operational plans are covered under this
agreement and deemed confidential.” (Bass Decl., ¶ 4, Ex. A, § 1.) But Plaintiff does not appear to point to any
provision in the Non-Disclosure and Non-Compete Agreement containing a prohibition on discussing wages.
Further, in Alberto,
“[t]he Arbitration Agreement provided that ‘no
form of class, collective, or representative action’ would be maintained
without the parties’ mutual consent. Citing Iskanian, the trial court found this provision
unconscionable because it required Alberto to waive her PAGA claims.” (Alberto v. Cambrian
Homecare, supra, 91
Cal.App.5th at p. 494.) The Court of Appeal found that “[b]oth before and after Viking
River Cruises, blanket waivers of
PAGA claims are unconscionable. Therefore, the trial court’s ruling on this
issue was correct.” (Id. at p. 495.) Here, however, Plaintiff does not point to any
provision in the subject documents containing a waiver of PAGA claims.
Plaintiff also asserts that “the venue selected in the arbitration
clause is unreasonable and highly inconvenient for Plaintiff.” (Opp’n at p.
13:18-19.) The Court notes that Section 4 of the
Mediation and Arbitration Agreement provides that “[a]ll arbitrations covered
by this Agreement shall be adjudicated in accordance with the state or federal
law that would be applied by an Arbitrator sitting at a venue local to
Riverside, California chosen pursuant to Employment Rules for Arbitration set
by the American Arbitration Association.” (Adreani Decl., ¶ 5, Ex. B, § 4.) Plaintiff states in his supporting declaration
that “I live and work in the County of Los Angeles. All of the work I performed
for Defendants was in their offices and surrounding courthouses in Los Angeles
County. If I am required to arbitrate in Riverside, California it will cost me
additional inconvenience, time and expense that I would not be required to
endure with litigating in the Los Angeles Superior Court.” (Barraza-Benitez
Decl., ¶ 10.)
In the reply, Defendants counter that “Plaintiff [sic] argument that
arbitrating in Riverside County is a burden for him is also without merit.
Riverside County adjoins Los Angeles County, and the distance between the El
Monte office, where Plaintiff worked, and the City of Riverside is
approximately forty miles.” (Reply at p. 3:6-8.) In his supporting declaration,
Plaintiff states that he “worked completely alone at the El Monte office from
about 10 a.m. to 7 or 8 p.m.” (Barraza-Benitez Decl., ¶ 8.) Defendants also
state that they are “agreeable to Los Angeles County as the venue for the
arbitration.” (Reply at p. 3:12-13.)
Based
on the foregoing, the Court finds that Plaintiff has not demonstrated a high
level of substantive unconscionability. In light
of the finding of only a low level of procedural unconscionability, the
Court finds that Plaintiff has not met his burden of demonstrating that the subject Mediation and Arbitration Agreement
is unenforceable due to unconscionability.
C. “Non-Individual
PAGA Claims”
As set forth above, Defendants move for an
order compelling Plaintiff to “to participate in arbitration of his
individual claims under the Private Attorney General Act…and stay the
representative PAGA claims pending the resolution of the claims at
arbitration.” (Notice of Motion at p. ii:7-9.)
In Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th
1104, 1113-1114, cited by Defendants, the California Supreme Court noted as
follows:
“In Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. ___ [213 L. Ed. 2d 179, 142 S.Ct. 1906] (Viking River), the United States Supreme
Court considered a predispute employment contract with an arbitration provision
specifying that ‘in any arbitral proceeding, the parties could not bring
any dispute as a class, collective, or representative PAGA action. It also
contained a severability clause specifying that if the waiver was found
invalid, any class, collective, representative, or PAGA action would
presumptively be litigated in court. But under that severability clause,
if any ‘portion’ of the waiver remained valid, it would be ‘enforced in
arbitration.’ (Id. at p. ___ [142 S.Ct. at p. 1916].) In
light of our state law rule prohibiting wholesale waiver of PAGA claims (Iskanian, supra, 59 Cal.4th at p. 383), the high court construed the
severability clause to reflect the parties’ agreement to arbitrate any alleged
Labor Code violations personally sustained by a PAGA plaintiff—so-called ‘individual’
claims—and held that the Federal Arbitration Act (FAA) (9
U.S.C. § 1 et seq.) compels enforcement of this agreement. (Viking River, at p. ___ [142 S.Ct. at pp. 1922–1925].) In so holding, the
high court declared that the FAA ‘preempted’ a separate state law rule that ‘PAGA
actions cannot be divided into individual and non-individual claims’ where the
parties have agreed to arbitrate individual claims. (Viking River, at p. ___ [142 S.Ct. at p. 1913].) For consistency, we use the
terms ‘individual’ and ‘non-individual’ claims in accordance with the high
court’s usage in Viking River.”
The Adolph Court found that “[t]he question here is whether an aggrieved employee
who has been compelled to arbitrate claims under PAGA that are ‘premised on
Labor Code violations actually sustained by’ the plaintiff maintains statutory
standing to pursue ‘PAGA claims arising out of events involving other employees’
in court. We hold that the answer is yes. To have PAGA standing, a
plaintiff must be an ‘aggrieved employee’—that is, (1) ‘someone ‘who was
employed by the alleged violator’ and (2) ‘against whom one or more of the
alleged violations was committed.’ Where a plaintiff has brought a PAGA action
comprising individual and non-individual claims, an order compelling
arbitration of the individual claims does not strip the plaintiff of standing
as an aggrieved employee to litigate claims on behalf of other employees under
PAGA.” ((Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at p. 1114
[internal quotations omitted].)
The Adolph Court further noted
that “[n]othing in PAGA or any other
relevant statute suggests that arbitrating individual claims effects a
severance. When a case includes arbitrable and nonarbitrable issues, the issues
may be adjudicated in different forums while remaining part of the
same action. Code of Civil Procedure section
1281.4 states that upon ‘order[ing] arbitration of a controversy which
is an issue involved in an action,’ the court should ‘stay the action.’ It
further provides that ‘[i]f the issue which is the controversy subject to
arbitration is severable, the stay may be with respect to that issue only.’ Section 1281.4 does not contemplate that the compelled
arbitration of an issue in controversy in the action is a separate action. The
statute makes clear that the cause remains one action, parts of which may be
stayed pending completion of the arbitration.” ((Adolph v. Uber
Technologies, Inc. (2023) 14
Cal.5th 1104, 1124-1125.)
The Court finds that a
stay of the “non-individual” PAGA claims is warranted, particularly to avoid
inconsistent rulings. Thus, the Court grants
Defendants’ request to stay Plaintiff’s non-individual PAGA claims pending completion
of arbitration of Plaintiff’s individual PAGA claims.
Conclusion
For the foregoing reasons, Defendants’ motion to compel
arbitration is granted as to Plaintiff’s individual PAGA claims. Defendants’
motion is denied as to Plaintiff’s non-individual PAGA claims.
The action is stayed pending completion of arbitration of Plaintiff’s
individual PAGA claims.
The Court sets an arbitration completion status conference
on January 9, 2025, at 10:00 a.m. in Dept. 50. The parties are ordered to file
a joint report regarding the status of the arbitration five court days prior to
the status conference, with a courtesy copy delivered directly to Department
50.
Defendants are ordered to provide notice of this Order.
DATED:
________________________________
Hon. Teresa A.
Beaudet
Judge, Los
Angeles Superior Court