Judge: Theresa M. Traber, Case: 24STCV19048, Date: 2025-02-19 Tentative Ruling
Case Number: 24STCV19048 Hearing Date: February 19, 2025 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department
47
HEARING DATE: February 19, 2025 TRIAL DATE: Not set.
CASE: Guloglyan v. USA Express Legal & Investigative Services, Inc.
CASE NO.: 24STCV19048
MOTION
TO COMPEL ARBITRATION
MOVING PARTY: Defendant
USA Express Legal & Investigative Services, Inc.
RESPONDING PARTY(S): Plaintiff Arman Guloglyan, individually and on behalf of
the other aggrieved employees pursuant to California Private Attorneys General
Act
STATEMENT OF
MATERIAL FACTS AND/OR PROCEEDINGS:
On February 31, 2024, Plaintiff Arman Guloglyan,
individually and on behalf of the other aggrieved employees pursuant to
California Private Attorneys General Act filed a complaint for damages and
enforcement under the Private Attorneys General Act, California Labor Code
section 2698, et seq. Plaintiff alleges the following:
(1) Violation of California Labor Code §§ 510 and 1198
(Unpaid Overtime);
(2) Violation of California Labor Code §§ 226.7 and 512(a)
(Failure to Provide Meal Breaks);
(3) Violation of California Labor Code § 226.7 Failure to
Provide Rest Breaks);
(4) Violation of California Labor Code §§ 1194, 1197, and
1197.1 (Unpaid Minimum Wages);
(5) Violation of California Labor Code § 201 (Failure to Pay
Wages Upon Termination);
(6) Violation of California Labor Code § 204 (Wages Not
Timely Paid During
Employment);
(7) Violation of California Labor Code § 226(a)
(Non-Compliant Wage Statements);
(8) Violation of California Labor Code § 1174(d) (Failure to
Keep Requisite Payroll
Records);
(9) Violation of California Labor Code §§ 2800 and 2802
(Unreimbursed Business
Expenses);
(10) Violation of California Labor Code § 6310 (Unsafe
Workplace);
(11) Retaliation in Violation of Labor Code § 1102.5;
(12) Retaliation in Violation of Labor Code § 98.6;
(13) Wrongful Termination in Violation of Public Policy;
(14) Violation of California Business & Professions Code
§§ 17200, et seq. (Unfair
Business Practices);
(15) Violation of California Labor Code § 2698, Et Seq.
(Private Attorneys General Act of 2004)
On January 3, 2025, Defendant filed the instant
motion to compel individual arbitration and stay. On February 4, 2025,
Plaintiff filed a notice of non-opposition.
TENTATIVE
RULING:
Defendant’s Motion to Compel Arbitration is GRANTED as to
the individual claims and the remaining claims are stayed.
The Court sets a status conference regarding progress in the
arbitration proceeding for February 18, 2026 at 8:30 a.m.
DISCUSSION:
Motion
to Compel Arbitration
Legal
Standard
Code of Civil Procedure section 1281.2 authorizes a court to
order parties to arbitrate a controversy if it finds they have made a prior
agreement to do so. An action to compel¿arbitration under the California
Arbitration Act¿is, in essence, an action to compel specific performance of a
contractual agreement to arbitrate. (Meyer v. Carnow¿(1986) 185
Cal.App.3d 169, 174.) A petition to compel arbitration must allege both (1) a
“written agreement to arbitrate” the controversy, and (2) that a party to that
agreement “refuses to arbitrate” the controversy. (Code Civ. Proc., § 1281.2.) Because the
obligation to arbitrate arises from contract, the court may compel arbitration
only if the specific dispute in question is one in which the parties have
agreed to arbitrate. (Weeks v. Crow (1980) 113 Cal.App.3d 350,
352.)
The party seeking to compel arbitration bears the burden of
proving the existence of a valid arbitration agreement by the preponderance of
the evidence. (Engalla v. Permanente
Medical Group, Inc (1997) 15 Cal.4th 951, 972 (Engalla).) A petition to compel arbitration must allege
both a “written agreement to arbitrate” the controversy, and that a party to
that agreement “refuses to arbitrate” the controversy. (Code Civ. Proc. §
1281.2.) A petition to compel arbitration is in essence a suit in equity to
compel specific performance of a contract. (Avery v. Integrated Healthcare
Holdings (2013) 218 Cal.App.4th 50, 71.)
As with any other specific performance claim, “a party seeking to
enforce an arbitration agreement must show the agreement’s terms are
sufficiently definite to enable the court to know what it is to enforce.” (Ibid., internal citations omitted.)
“Only the valid and binding agreement of the parties, including all material
terms well-defined and clearly expressed, may be ordered specifically performed.”
(Ibid.)
Once the moving party establishes the existence of an
arbitration agreement, it then becomes the resisting party’s burden, in
opposing the motion, to prove by a preponderance of the evidence any fact
necessary to her opposition. (Engalla, supra, at p. 972) 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. (Ibid.; see also Condee v. Longwood Management Corp.
(2001) 88 Cal.App.4th 215, 218-219.)
Existence of Arbitration Agreement
As the moving party, Defendant bears the initial burden to
establish the existence of an arbitration agreement. Defendant advances the
declaration of Gina Kazakian who authenticates a copy of an arbitration
agreement signed by Plaintiff when he began her employment with Defendant. (Kazakian
Decl. ¶7, Ex. B.)
Defendant must also establish Plaintiff has refused to abide
by the agreement. Defendant also advances the declaration of its counsel, Matthew
T. Theriault, who testifies Defendant has demanded the parties arbitrate their
dispute, and after some back and forth Plaintiff declined. (Theriault Decl.
¶3.)
Plaintiff does not oppose.
Defendant has established the existence of an arbitration
agreement and Plaintiff’s refusal to arbitrate their dispute. The burden
therefore shifts to Plaintiff to establish some reason why the court should not
enforce the parties’ agreement.
Enforceability of the Arbitration Agreement
1. The
agreement is not procedurally unconscionable and satisfies the Armendariz
factors, and Defendant has not waived its right to enforce the agreement.
Defendant argues that the parties’ agreement is neither
procedurally unconscionable nor substantively unconscionable. Plaintiff does
not oppose based on procedural or substantive unconscionability. Plaintiff
bears the burden to show the agreement is unenforceable on any particular
ground; Defendant’s persuasive and uncontroverted argument prevails on these
three points.
2.
The FAA applies to the parties’ arbitration agreement.
The enforcement of the parties’ agreement depends on the
application of the Federal Arbitration Act (FAA) to their agreement.
“The FAA applies to any ‘contract evidencing a transaction
involving commerce’ that contains an arbitration provision. ‘[T]he phrase “
‘involving commerce’ ” in the FAA is the functional equivalent of the term “
‘affecting commerce,’ ” which is a term of art that ordinarily signals the
broadest permissible exercise of Congress's commerce clause power.’ ”(Carbajal
v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238, citations omitted.)
However, “ ‘although Congress's power to regulate commerce
is broad, it does have limits... . [A] relatively trivial impact on interstate
commerce cannot be used as an excuse for broad regulation of state or private
activities.’ ” (Ibid.)
“[A] petitioner seeking an order to compel arbitration [and
relying on the FAA] must show that the subject matter of the agreement
involves interstate commerce.” (Lane v. Francis Capital Management LLC
(2014) 224 Cal.App.4th 676, 687, italics added.) In the context of an
employment agreement, the defendant must show that there is an “interstate
nature to his employment contract”, not merely that his employer by itself
engages in interstate commerce. (See ibid.; accord Giuliano v. Inland
Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276 [federal law applied
based on employer’s interstate business activities as well as employee’s
business trips outside California and his negotiation of business loans from
out-of-state lenders].)
Defendant asserts that the Agreement indisputably covers
Plaintiff’s wage and hour, retaliation and wrongful termination claims: “any
claims and controversies either party may have against the other involving
conduct alleged to be in violation of local, state or federal statutory or
common law arising out of or relating to the application process, the
employment relationship and/or the termination of the employment relationship
by private, final and binding arbitration under the Federal Arbitration Act.”
(Kazakian Decl., Ex. A); accord Circuit City Stores, Inc. v. Adams (2001) 532
U.S. 105, 119 [held: employment contracts are not exempted from the FAA].)
The circumstances in which the FAA does not apply to
employment disputes are a vanishing few. (See Crestwood Behavioral Health,
Inc. v. Lacy (2021) 70 Cal.App.5th 560, 581 [“[t]he FAA ... covers all
‘[e]mployment contracts, except for those covering workers engaged in
transportation’ ”], quoting E.E.O.C. v. Waffle House, Inc. (2002) 534
U.S. 279, 289.) In addition, the parties’ own agreement appears to contain a
provision subjecting it to the FAA, albeit somewhat ambiguously. (Mot., 5:12
[“procedure” for the arbitration “governed by the Federal Arbitration Act.”])
Precedent applies the FAA to nearly all employment contracts
unless they fall into certain explicit carve-outs. Plaintiff also fails to
oppose on this ground. The Court finds that the FAA does apply to the parties’
arbitration agreement.
3.
Defendant’s “individual” PAGA claims must be sent to arbitration.
California law does not permit an employee to preemptively
waive her right to bring a collective, that is, a “non-individual” action,
under the PAGA, as part of an arbitration agreement or otherwise. (Iskanian
v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 382-383 (Iskanian);
Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1114.) Thus,
where an arbitration agreement requires an employee to waive “non-individual”
claims in arbitration, those claims cannot be sent to arbitration; they must be
litigated. (Ibid.)
Prior to June 2022, California law also did not permit
“individual” and “non-individual” claims under the PAGA to be disaggregated
from one another, with the former sent to arbitration and the latter litigated.
(Ibid.) So where an employee purportedly waived the right to pursue
“non-individual” claims in arbitration, the arbitration agreement could not be
enforced as to any PAGA claims at all. (Ibid.)
However, “[w]hen it applies, the FAA preempts any state law
rule that ‘ “stand[s] as an obstacle to the accomplishment of the FAA's
objectives.” ’ ” (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227,
238; AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 343.)
Applying that principle to PAGA actions, the United States Supreme Court held
in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 (Viking
River), that where the FAA applies, it preempts California’s prior rule
that prevented the disaggregation of “individual” and “non-individual” claims
under the PAGA.
Thus, where the FAA applies to an arbitration agreement, the
agreement must, as a matter of federal law, be enforced as to “individual” PAGA
claims. (Viking River, supra, at pp. 1904-1905.)
The FAA applies to Plaintiff’s claims here, so the court
must order Plaintiff’s “individual” PAGA claims to arbitration.
4. The arbitration agreement may not be
enforced as to Plaintiff’s “non-individual” PAGA claims, and Plaintiff retains
standing to pursue those claims in litigation.
Civil penalties can be recovered in an action brought by an aggrieved
employee “on behalf of the employee and other current or former
employees.” (Lab. Code, § 2699, subd. (a).) “Under PAGA’s standing
requirement, a plaintiff can maintain non-individual PAGA claims in an action
only by virtue of also maintaining an individual claim in that action.
See Cal. Lab. Code Ann. §§ 2699(a), (c).” (Viking River Cruises, Inc.
v. Moriana (2022) 596 U.S. 639, 663.)
Our Supreme Court has determined that a PAGA plaintiff
retains standing to pursue “non-individual” claims even where her individual
claims have been referred to arbitration or settled. (Adolph v. Uber
Technologies, Inc. (2023) 14 Cal.5th 1104, 1126; Kim v. Reins (2020)
9 Cal.5th 73, 84-85.)
The Court will stay Plaintiff’s representative PAGA claims
during arbitration of Plaintiff’s individual PAGA claims. (See Adolph
v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1126.)
The Court
sets a status conference regarding progress in the arbitration proceeding for
February 18, 2026 at 8:30 a.m.
Moving party to give notice, unless waived.
IT IS SO ORDERED.
Dated: February 19,
2025 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
Any party may submit on the
tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by
no later than 4:00 p.m. the day before the hearing. All interested
parties must be copied on the email. It should be noted that if you
submit on a tentative ruling the court will still conduct a hearing if any
party appears. By submitting on the tentative you have, in essence, waived your
right to be present at the hearing, and you should be aware that the court may
not adopt the tentative, and may issue an order which modifies the tentative
ruling in whole or in part.