Judge: Thomas D. Long, Case: 21STCV37647, Date: 2023-04-18 Tentative Ruling

Case Number: 21STCV37647    Hearing Date: April 18, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On October 22, 2021, Plaintiff Hector Lopez, as an “aggrieved employee,” filed this action against Defendant Sunrise Foods LLC, asserting a single cause of action for civil penalties under the Private Attorneys General Act (“PAGA”) due to Defendant’s violations of the Labor Code.

On January 11, 2023, Defendant filed a motion to compel arbitration and dismiss the action.  No oppositions were filed.

DISCUSSION

When seeking to compel arbitration of a plaintiff’s claims, the defendant must allege the existence of an agreement to arbitrate.  (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.)  The burden then shifts to the plaintiff to prove the falsity of the agreement.  (Ibid.)  After the Court determines that an agreement to arbitrate exists, it then considers objections to its enforceability.  (Ibid.)  The Court must grant a petition to compel arbitration unless the defendant has waived the right to compel arbitration or if there are grounds to revoke the arbitration agreement.  (Ibid.; Code Civ. Proc., § 1281.2.)

A.        Defendant Shows the Existence of an Arbitration Agreement That Applies to Plaintiff’s Claims.

Defendant contends that in March 2020, Plaintiff signed an arbitration agreement in connection with his on-boarding process for employment.  (Motion at p. 5; Sood Decl. ¶ 11.)  Defendant provides a copy of the signed Addendum to the Employee Handbook, which contains the Arbitration Agreement.  (Sood Decl., Ex. A [“Arbitration Agreement”].)

In the Arbitration Agreement, the parties agreed to arbitrate “[a]ny controversy, dispute or claim between any employee and [Defendant].”  (Arbitration Agreement ¶ 1.1.)  This includes, but is not limited to, “claims for wages and other claims [for] compensation and/or reimbursement . . . labor claims for unpaid wages, overtime, missed rest period[s] or missed meal periods, wage penalties, and claims for violation of any of the federal state, or other government law, statute, regulation, or ordinance . . . .”  (Arbitration Agreement ¶ 1.2.)  This covers Plaintiff’s claims.

B.        The Arbitration Agreement Satisfies All Armendariz Factors.

Arbitration agreements for FEHA claims must (1) provide for neutral arbitrators, (2) provide for more than minimal discovery, (3) require a written award, (4) provide for all of the types of relief that would otherwise be available in court, and (5) not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum.  (Armendariz, supra, 24 Cal.4th at p. 102.)  These requirements may also apply to claims under the Labor Code.  (See Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, 254.)

The Arbitration Agreement provides for selection of an arbitrator by mutual agreement.  (Arbitration Agreement ¶ 2.1.)  The arbitrator will apply applicable California or federal law and the California Evidence Code.  (Arbitration Agreement ¶ 2.3.)  “The parties shall be entitled to conduct all discovery to which they would have been entitled” in court, and the arbitrator “shall have the power to limit such discovery pursuant to motions and protective orders under the same rules and limitations” as in court.  (Arbitration Agreement ¶ 2.3.)  The arbitrator will issue a written opinion and award that includes factual findings and the reasons for the decision, and they shall award only the remedies in law or equity that are allowed by law.  (Arbitration Agreement ¶ 2.5.)  The company will bear the costs of the arbitrator and all other arbitration costs that would not be incurred in court.  (Arbitration Agreement ¶ 2.7.)  Each party will bear their own costs and attorney fees, unless otherwise awarded according to state or federal law.  (Arbitration Agreement ¶ 2.7.)

Accordingly, the Arbitration Agreement satisfies Armendariz.

C.        Plaintiff’s Individual Claim Must Be Arbitrated, But Plaintiff’s Representative Claim Must Be Litigated, Not Dismissed.

Defendant has shown that the Arbitration Agreement requires Plaintiff to arbitrate his individual claim.  Plaintiff did not file an opposition, so he did not show any grounds for rescission of the Arbitration Agreement.  Accordingly, the motion is granted for Plaintiff’s individual claim.  (See Code Civ. Proc., § 1281.2.)

“PAGA provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding.  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).  When an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit.”  (Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906, 1925 (Viking River Cruises).)

However, in Viking River Cruises, the Supreme Court also recognized that this is ultimately an issue of state law.  The Court of Appeal recently “conclude[d] that a plaintiff is not stripped of standing to pursue non-individual PAGA claims simply because his or her individual PAGA claim is compelled to arbitration.”  (Million Seifu v. Lyft, Inc. (Cal. Ct. App., Mar. 30, 2023, No. B301774) 2023 WL 2705285, at p. *1 (Seifu).)  Like the plaintiff in Seifu, Plaintiff alleges that he was employed by Defendant and that one or more alleged Labor Code violations were committed against him (e.g., Complaint ¶¶ 2, 8, 22-50), and thus he is an “aggrieved” employee within the meaning of PAGA with standing to assert PAGA claims on behalf of himself and other employees.  (See Seifu, supra, 2023 WL 2705285, at p. *6; see also Nickson v. Shemran, Inc. (Cal. Ct. App., Apr. 7, 2023, No. D080914) 2023 WL 2820860, at *7.)

The California Supreme Court is also set to decide the issue in Adolph v. Uber Technologies, Case No. S274671 (Adolph).  The California Supreme Court granted review on July 20, 2022, and on August 1, 2022, it limited the issue to be briefed as: “Whether an aggrieved employee who has been compelled to arbitrate claims under the Private Attorneys General Act (PAGA) that are ‘premised on Labor Code violations actually sustained by’ the aggrieved employee [citations] maintains statutory standing to pursue ‘PAGA claims arising out of events involving other employees’ [citation] in court or in any other forum the parties agree is arbitrable.”  The case is fully briefed, but oral argument has not yet been set.

Accordingly, Defendant’s request to dismiss the representative PAGA claim is denied.  (See Motion at pp. 12-14.)  This denial is without prejudice to the filing of a new motion following the opinion in Adolph, if the California Supreme Court decides the issue differently.

Instead, the Court will stay Plaintiff’s representative claim pending completion of arbitration of Plaintiff’s individual claim.  (See Gregg v. Uber Technologies, Inc. (Cal. Ct. App., Mar. 24, 2023, No. B302925) 2023 WL 2624590, at pp. *10-11.)

CONCLUSION

The motion to compel arbitration is GRANTED IN PART and DENIED IN PART.

The motion is GRANTED as to arbitrating Plaintiff’s individual PAGA claim.

The motion is DENIED as to dismissing Plaintiff’s representative PAGA claim.

The entire action is STAYED pending the conclusion of the arbitration proceedings.

A Status Conference Re: Arbitration is scheduled for October 20, 2023 at 8:30 AM in Department 48 at Stanley Mosk Courthouse.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit.  Parties intending to appear are encouraged to appear remotely and should be prepared to comply with Dept. 48’s new requirement that those attending court in person wear a surgical or N95 or KN95 mask.

      Dated this 18th day of April 2023