Judge Teresa A. Beaudet, Case Number: 24STCV09309, Date: 2024-12-03 Tentative Ruling

JOSEPH ROSLAN,

Plaintiff,

vs.

ALLEGIANCE GOLD, LLC, et al.

Defendants.

Case No.:

24STCV09309

Hearing Date:

December 3, 2024

Hearing Time: 2:00 p.m.

[TENTATIVE] ORDER RE:

DEFENDANT ALLEGIANCE GOLD, LLC’S MOTION TO COMPEL INDIVIDUAL ARBITRATION AND TO STAY THE NON-INDIVIDUAL PRIVATE ATTORNEYS GENERAL ACT CLAIM PENDING ARBITRATION

On April 12, 2024, Plaintiff Joseph Roslan (“Plaintiff”) filed this action against Defendant Allegiance Gold, LLC (“Defendant”). On May 13, 2024, Plaintiff filed the operative First Amended Complaint (“FAC”), alleging causes of action for (1) wrongful termination in violation of public policy, (2) retaliation for harassment and/or discrimination complaints in violation of Government Code section 12940(h), (3) failure to prevent harassment in violation of Government Code section 2940(k), (4) retaliation in violation of Labor Code section 1102.5,

(5) failure to pay minimum wage, (6) failure to pay overtime wages, (7) failure to provide meal periods, (8) failure to authorize and permit rest periods, (9) failure to furnish compliant wage statements, (10) failure to pay all wages owed upon termination, and (11) “PAGA representative action for penalties pursuant to Labor Code section 2698.”

Defendant now moves for an order “enforcing the arbitration agreement entered into by [Plaintiff], compelling Plaintiff to arbitrate his individual claims and to sever and stay his non-individual representative Private Attorneys General Act (‘PAGA’) claim.” Plaintiff opposes.

As an initial matter, the Court notes that on November 18, 2024, Plaintiff filed a request for dismissal of “Causes of Action #1-10 only,” without prejudice. Dismissal was entered on November 19, 2024. Thus, the Court finds that the instant motion is moot as to the first through tenth causes of action of the FAC. As noted by Plaintiff in the opposition, the only remaining cause of action alleged is the eleventh cause of action for “PAGA representative action for penalties pursuant to Labor Code section 2698.”

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. section 2, et seq.; (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)

In the FAC, Plaintiff alleges that “[o]n or about February 2, 2023, Defendant hired Plaintiff Joseph Roslan as an employee in the job position of Opener/Associate Account Executive to work at the worksite.” (FAC, ¶ 16.)

Defendant submits the Declaration of Mark Naaman, who is the “Principal of Allegiance Gold, LLC.” (Naaman Decl., ¶ 3.) Mr. Naaman states that Plaintiff “was hired by Allegiance as an Opener.” (Naaman Decl., ¶ 4.) Mr. Naaman further states that “[o]n or about September 11, 2023, Allegiance retained TriNet HR III, Inc. (‘TriNet’) as its Professional Employment Organization…As part of this arrangement, all employees of Allegiance, including Plaintiff, were presented with TriNet’s Terms and Conditions Agreement…which includes the Dispute Resolution Protocol…” (Naaman Decl., ¶ 5.)

Defendant also submits the Declaration of Elizabeth Weiss, who is the “Manager, Technology Operations Center for TriNet USA, Inc...” (Weiss Decl., ¶ 2.) “TriNet HR III, Inc. is a licensed Professional Employer Organization (“PEO”), which provides PEO services to named defendant, Allegiance.” (Weiss Decl., ¶ 2.) “TriNet HR III, Inc., fulfill[s] general administrative needs for their clients (here Allegiance), including payroll processing and providing access to certain personnel information, documents, and notices for their clients’ employees, which TriNet refers to as worksite employees (“WSEs”). (Weiss Decl., ¶ 3.)

Ms. Weiss states that she is “currently involved in the maintenance of the TriNet Platform and the online processes by which individuals are provided with TriNet’s Terms and Conditions Agreement (‘TCA’), which contains TriNet’s Dispute Resolution Protocol (‘DRP’).”

(Weiss Decl., ¶ 5.) Ms. Weiss states that she has “reviewed TriNet’s data regarding the TriNet Platform, including data related to the individual TriNet Platform account created for Mr. Roslan, which is maintained by TriNet in the ordinary course of business. Based on [her] review of the data, the operative TCA, which includes TriNet’s DRP, was presented to Mr. Roslan via his individual TriNet Platform account on October 2, 2023.” (Weiss Decl., ¶ 10.) Ms. Weiss states that “[a] true and correct copy of the TCA referred to immediately above is attached hereto and incorporated herein as Exhibit ‘A.’” (Weiss Decl., ¶ 10.)

Ms. Weiss further states that “[a]ttached as Exhibit ‘B’ is a true and correct copy of a screenshot of Plaintiff’s online platform account, which shows he accepted the TCA and DRP on October 2, 2023. The ‘Y’ in the ‘Accepted’ column (shown in Exhibit ‘B’) in his online platform account demonstrates that on October 2, 2023, Plaintiff accepted the operative TCA, including the DRP, by electronic acceptance through his online TriNet Platform account using his unique Login ID and password.” (Weiss Decl., ¶ 14, Ex. B.) Ms. Weiss states that “[t]he screenshot attached as Exhibit ‘B’ is an accurate display of the information from the TriNet Platform showing Plaintiff’s employee identification number, which was 00001739211; his name (Roslan, Joseph Richard); Plaintiff’s work e-mail address and personal e-mail address, which were ag37@allegiancegold.com and josephroslan@gmail.com, respectively; Allegiance’s company identification number with TriNet, which is 23BU; the date when Plaintiff clicked the ‘Accept’ button to accept the then-effective TCA/DRP (labeled ‘EFFDT,’ which means effective date); and ‘Y’ in the ‘accepted’ column, and ‘N’ in the ‘CLS ACT WAIVR’ column denoting that Plaintiff did not opt out of the Class Action Waiver.” (Weiss Decl., ¶ 14, Ex. B.)

As set forth above, Exhibit “A” to Ms. Weiss’s declaration is the “Trinet Terms and Conditions Agreement (TCA)” (herein, the “TCA”). (Weiss Decl., ¶ 10, Ex. A.) Section 8 of the TCA is titled “Dispute Resolution Protocol (‘DRP’) and Mandatory Arbitration of Claims.” (Weiss Decl., ¶ 10, Ex. A, p. 5.) Section 8 of the TCA provides, inter alia, as follows:

“Subject to and without superseding the specific terms in subsections (a) through (f) below, the DRP expressly requires that arbitration will be used instead of going before a court (for a judge or jury trial) and that NO JURY TRIAL WILL BE PERMITTED (unless applicable law does not allow enforcement of a pre-dispute jury trial waiver in the particular circumstances presented) for any dispute arising out of or relating to your co-employment with TriNet and/or arising out of or relating to your employment with your company, and for any dispute with an employee, officer, or director of TriNet or of a TriNet client.” (Weiss Decl., ¶ 10, Ex. A, p. 5, emphasis omitted.)

In addition, Section 8(a) of the TCA provides, inter alia, that “[s]ubject to the limitations in subsection (b), this DRP covers any dispute arising out of or relating to your co-employment with TriNet, including your TriNet co-employer, and/or arising out of or relating to your employment with your company, as well as any dispute with an employee, officer, or director of TriNet or of a TriNet client (all of whom, in addition to TriNet clients, are intended to be beneficiaries of this DRP) (‘covered dispute’), including, but not limited to, all claims whether arising in tort or contract and whether arising under statute or common law including, but not limited to, any claim of breach of contract, discrimination or harassment of any kind…” (Weiss Decl., ¶ 10, Ex. A, p. 5.)

In the motion, Defendant asserts that “Plaintiff’s FAC is based upon his employment with Allegiance. Plaintiff alleges that Allegiance retaliated against him, failed to prevent same, wrongfully terminated him, and various wage-and-hour claims on behalf of himself and others. (See FAC generally.) Thus, it is undisputed that every alleged wrongful act of Allegiance arose directly out of, or is related to, Plaintiff’s employment with Allegiance, and he must be bound by the Agreement.” (Mot. at p. 6:14-18.)

In the opposition, Plaintiff states that he “does not concede that he signed an arbitration agreement in connection with his employment with Defendant, but Plaintiff has chosen not to challenge the existence of the agreement.” (Opp’n at p. 3:4-5.) However, Plaintiff asserts that

his “representative-only PAGA action cannot be compelled to arbitration.” (Opp’n at p. 3:20.) Moreover, as an initial matter, Plaintiff asserts that the subject TCA contains a provision at Section 8(d) “precluding Plaintiff from taking legal action in a representative capacity…which is unenforceable as to PAGA.” (Opp’n at p. 3:6-8.) Section 8(d) of the TCA provides, inter alia, as follows:

“There will be no right or authority for any dispute to be brought, heard, or arbitrated as a class, collective, representative, or private attorney general action, or as a member in any purported class, collective, representative, or private attorney general proceeding, including, without limitation, uncertified class actions (‘Class Action Waiver’); provided, however, that you may opt out of the Class Action Waiver by checking this box ¿ before you acknowledge this TCA below. Disputes regarding the validity and enforceability of the Class Action Waiver may be resolved only by a civil court of competent jurisdiction and not by an arbitrator. In any case in which (1) the dispute is filed as a class, collective, representative, or private attorney general action, and (2) a civil court of competent jurisdiction finds all or part of the Class Action Waiver unenforceable, the class, collective, representative, and/or private attorney general action must be litigated in a civil court of competent jurisdiction, but the portion of the Class Action Waiver that is enforceable shall be enforced in arbitration…” (Weiss Decl., ¶ 10, Ex. A, p. 7, emphasis omitted, underline added.)

Both parties cite to Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1117, where the California Supreme Court noted that “[i]n Iskanian, we held that a predispute categorical waiver of the right to bring a PAGA action is unenforceable…a rule that Viking River left undisturbed…We explained that such waivers violate California public policy and Civil Code sections 1668 and 3513.” As set forth above, Section 8(d) of the TCA contains a waiver of the right to bring a PAGA action. The Court finds that such waiver is unenforceable. (Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at p. 1117.) As set forth above, Section 8(d) of the TCA provides that “[i]n any case in which (1) the dispute is filed as a class, collective, representative, or private attorney general action, and (2) a civil court of competent jurisdiction finds all or part of the Class Action Waiver unenforceable, the class, collective, representative, and/or private attorney general action must be litigated in a civil court of competent jurisdiction, but the portion of the Class Action Waiver that is enforceable shall be enforced in arbitration…” (Weiss Decl., ¶ 10, Ex. A, p. 7.) Thus, the Court agrees with Plaintiff that his “representative” PAGA claim cannot be compelled to arbitration and “must be litigated in a civil court of competent jurisdiction.” (Weiss Decl., ¶ 10, Ex. A, p. 7.) Defendant appears to concede this point, stating in the motion that “Plaintiff’s non-individual PAGA claim is one part of an action that does not contain arbitrable claims…” (Mot at p. 13:15-16.)

That leaves the question of whether Plaintiff is also asserting an “individual claim” under PAGA. Plaintiff asserts that he “brings his PAGA claim on a representative basis only (not on an ‘individual’ basis),” and that “Defendant’s motion should be denied because there is no individual claim to compel to arbitration…” (Opp’n at p. 2:11-12; 4:5-6, emphasis omitted.)

Plaintiff cites to Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, 536, where the Court of Appeal held that “an employee who does not bring an individual claim against her employer may nevertheless bring a PAGA action for herself and other employees of the company.” But in Balderas, the Court of Appeal noted that “Lizbeth Balderas was a Fresh Start employee. In June 2022, she filed a complaint for civil penalties under PAGA against Fresh Start. She alleged, ‘Ms. Balderas is not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, including herself and other aggrieved employees.’” ((Id. at p. 536.) Plaintiff, by contrast, does not point to any such allegations in the FAC stating that he is “not suing in [his] individual capacity.” (Ibid.) In fact, Plaintiff’s PAGA cause of action alleges, inter alia, that “Defendant has committed numerous violations of the Labor Code against Plaintiff…” (FAC, ¶ 133, emphasis added.) Plaintiff also alleges that “[p]ursuant to PAGA, Plaintiff seeks civil penalties due to Plaintiff, other aggrieved employees, and the State of California according to proof…” (FAC, ¶ 139, emphasis added.) Plaintiff concludes in the opposition that he “did not bring an individual PAGA claim” (Opp’n at p. 6:11-12) but does not appear to explain why this is purportedly the case.

In the opposition, Plaintiff also argues that he is an “exempt worker engaged in interstate commerce,” such that “he is exempt from the FAA and Defendant’s motion should be denied.” (Opp’n at p. 7:3-4.) Plaintiff cites to 9 U.S.C. section 1, which provides as follows:

“‘Maritime transactions’, as herein defined, means charter parties, bills of lading of water carriers, agreements relating to wharfage, supplies furnished vessels or repairs to vessels, collisions, or any other matters in foreign commerce which, if the subject of controversy, would be embraced within admiralty jurisdiction; ‘commerce’, as herein defined, means commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation, but nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

Plaintiff contends that he “worked in sales for Defendant, a national and global precious metals dealer, handling the sale of goods across state and national borders with customers and vendors located in various states and countries…Thus, Plaintiff qualifies as an exempt worker engaged in interstate commerce…” (Opp’n at p. 7:1-4.) Plaintiff cites to paragraph 6 of Defendant’s Declaration of Mark Naaman, which indicates, inter alia, that “Allegiance provides strategic diversification and investment in physical precious metals…While it is located in California, it facilitates sales from clients all over the country and the world, not just from clients in California.” (Naaman Decl., ¶ 6.) Defendant did not file any reply in support of the motion, and thus does not address Plaintiff’s assertion that he is an “exempt worker under the FAA.” (Opp’n at p. 6:14.) However, as a threshold matter, the foregoing argument concerns the Federal Arbitration Act. Plaintiff does not address Defendant’s assertion that “California law also requires arbitration of Plaintiff’s claims.” (Mot. at p. 9:10.) Defendant cites to Code of Civil Procedure section 1281.2, which provides, inter alia, that “[o]n 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…” In Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97, cited by Defendant, the California Supreme Court noted that “California law, like federal law, favors enforcement of valid arbitration agreements.”

Based on the foregoing, the Court finds that Defendant has shown that Plaintiff’s individual PAGA claim should be compelled to arbitration. As discussed, Plaintiff “does not contest the existence of an arbitration agreement” here. (Opp’n at p. 4:15-16.) As discussed, Section 8 of subject TCA provides, inter alia, that “[s]ubject to and without superseding the specific terms in subsections (a) through (f) below, the DRP expressly requires that arbitration will be used instead of going before a court,” and that “this DRP covers any dispute arising out of or relating to your co-employment with TriNet, including your TriNet co-employer, and/or arising out of or relating to your employment with your company, as well as any dispute with an employee, officer, or director of TriNet or of a TriNet client (all of whom, in addition to TriNet clients, are intended to be beneficiaries of this DRP)…including, but not limited to, all claims whether arising in tort or contract and whether arising under statute or common law…”

Lastly, Defendant requests that Plaintiff’s “non-individual representative PAGA action be stayed pending resolution of individual arbitration.” (Mot. at p. 3:8-9.) In Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at page 1114, cited by Defendant, the California Supreme Court noted 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.” (Internal quotations and citations 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.” (Id. at pp. 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 Defendant’s request to stay Plaintiff’s non-individual PAGA claims pending completion of arbitration of Plaintiff’s individual PAGA claims.

Based on the foregoing, Defendant’s motion to compel arbitration is granted as to Plaintiff’s individual PAGA claims. Defendant’s 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 December 3, 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.

Superior Court of California

County of Los Angeles

Department 50