Judge: William D. Claster, Case: 22-01244163, Date: 2023-09-01 Tentative Ruling
Defendant Fresh Grill, LLC's Notice of Motion and Motion to (1) Lift the Court's Stay; (2) Enforce Stipulation; and (3) Consolidate Arbitration Proceedings ROA 78
Before the Court are substantially identical motions in Sanchez v. Priority Workforce, No. 21-01237766, and Valencia v. Priority Workforce, No. 22-01244163. The Court will address both motions in a single order.
These cases are overlapping wage-and-hour class actions. In both cases, defendants Priority Workforce, Inc. and Fresh Grill, LLC stipulated with the respective plaintiffs, Quetzally Sanchez and Maria Valencia, to dismiss their class claims, arbitrate their claims on an individual basis, and stay proceedings. Sanchez and Valencia responded by filing four separate demands for arbitration: each plaintiff filed a FEHA demand and a wage-and-hour demand. Each wage-and-hour demand simply attaches the operative class complaint in that plaintiff’s case. Fresh Grill, joined by Priority Workforce, seeks the following relief:
For the reasons set forth below, the Court rules as follows:
V. Propriety of Lifting Stay
While Fresh Grill does not identify any authority that would permit the Court to lift the stay for purposes of deciding this motion, neither Sanchez nor Valencia argues the motion should be denied on this basis. Accordingly, the Court concludes it is appropriate to lift the stay and decide this motion.
VI. Enforcing Stipulation to Individually Arbitrate
In both cases, the plaintiffs agreed to dismiss their class claims and proceed in arbitration on an individual basis. Sanchez and Valencia then began wage-and-hour arbitrations by filing demands attaching their operative FACs—pleadings that contain class claims. Fresh Grill asks that the Court enforce the stipulated order to individually arbitrate these claims. The Court has authority to do so. (See CCP § 128(4).)
After the motions were filed, Sanchez and Valencia, through counsel, told the arbitrator they intended to proceed on an individual basis. (Jackson Decl. (Sanchez ROA 93 and Valencia ROA 84), Ex. A.) Based on this representation, there appears to be nothing left for the Court to do, so the request is denied as moot. Should Sanchez and Valencia nonetheless attempt to proceed on a class basis, the judicial estoppel consequences of this representation will be a matter for the arbitrator to decide.
VII. Consolidation Under CCP § 1281.3
CCP § 1281.3 provides, in relevant part:
A party to an arbitration agreement may petition the court to consolidate separate arbitration proceedings, and the court may order consolidation of separate arbitration proceedings when:
(1) Separate arbitration agreements or proceedings exist between the same parties; or one party is a party to a separate arbitration agreement or proceeding with a third party; and
(2) The disputes arise from the same transactions or series of related transactions; and
(3) There is common issue or issues of law or fact creating the possibility of conflicting rulings by more than one arbitrator or panel of arbitrators.
The first factor is undisputed. The parties have stipulated to arbitrate their disputes, and Sanchez and Valencia each commenced two separate arbitration proceedings involving the same parties.
As to the second factor, the disputes only arise from the same transactions or related transactions at the highest level of generality: Sanchez and Valencia’s employment. The disputes themselves are unrelated.
For the wage-and-hour claims, Sanchez and Valencia both allege off-the-clock work and late, short, missed, or on-premises breaks that resulted in derivative violations. Sanchez also alleges failure to reimburse work-related clothing purchases. For the FEHA claims, Sanchez alleges that she was injured at work, requested a disability accommodation, and was retaliated against for seeking accommodation—in particular, Defendants intentionally delayed her paychecks in retaliation. Valencia similarly alleges she was injured at work. But she says that even though her doctor cleared her to return, she continued to experience pain. When she complained about this to human resources, human resources told her to go back to work because her doctor had cleared her rather than listening to her complaints. While still in pain, she suffered a second injury at work, fracturing both her knee and her shoulder.
The wage-and-hour and FEHA claims have nothing to do with each other in their particulars. Only by saying “they arise from Sanchez and Valencia’s employment” do they have anything in common. Furthermore, employee plaintiffs routinely file separate FEHA and wage-and-hour lawsuits that proceed without formal consolidation. Sanchez and Valencia’s strategy is hardly unheard of.
As to the third factor, the Court does not believe there are common issues of law or fact that create the possibility of conflicting rulings from arbitrators. For Sanchez, Fresh Grill notes in the opening papers the delayed paycheck issue in the FEHA matter, and points out that failure to pay wages timely is a claim in the wage-and-hour matter. But the failure to pay wages timely claim in the wage-and-hour matter is derivative of the other wage-and-hour violations. On the other hand, the FEHA matter alleges the intentional failure to pay Sanchez in a timely manner as retaliation. A finding that Defendants didn’t commit substantive wage-and-hour violations resulting in derivative LC § 204 violations won’t affect anything in the FEHA matter, nor will a finding that Defendants didn’t intentionally delay Sanchez’s paycheck in retaliation affect a claim for LC § 204 violations derivative of substantive wage and-hour violations.
For Valencia, Fresh Grill notes no specific common issues that risk conflicting rulings in the opening papers. It simply makes the vague allegation that “Plaintiff chose to articulate different theories in separate complaints in an attempt to . . . hedge her bets by creating opportunity for inconsistent findings of law or fact.” (Valencia ROA 72 at p. 8.)
In the reply papers in both cases, Fresh Grill raises another potential for conflicting rulings: whether Sanchez or Valencia is indeed an employee of Fresh Grill, a necessary finding for wage-and-hour or employment discrimination claims. Since it appears undisputed that Priority Workforce was the direct employer who detailed employees to work at Fresh Grill, this isn’t an idle concern. But at the same time, it doesn’t appear to be a live issue in the case. Neither of Fresh Grill’s answers to the respective complaints raises non-employment of Sanchez or Valencia as an affirmative defense. None of the status conference statements filed in either case suggests that Fresh Grill intends to argue Sanchez or Valencia weren’t its employees. Absent any indication that Fresh Grill will in fact argue it wasn’t a joint employer of Sanchez or Valencia, the Court finds there is no realistic possibility of conflicting rulings on this point.
Because two of the three § 1281.3 factors are not satisfied, the request to consolidate the arbitrations is denied.
VIII. Additional Comments
Notwithstanding the foregoing analysis, the Court is sympathetic to Fresh Grill’s argument that the parties’ resources, and judicial/arbitral economy, would best be served by having two arbitrations instead of four. Although there is no order to do so, the Court strongly recommends that Plaintiffs and their counsel reconsider their opposition to consolidation. Again, because consolidation can only be ordered under § 1281.3 when all three statutory factors are satisfied, there is no basis for the Court to order consolidation in the “interest of justice” or a similar standard.
That said, the Court’s ruling is limited to consolidation under § 1281.3. The Court has not been asked to decide any other potential basis for consolidation that might be permitted by the applicable arbitration rules or otherwise raised before the arbitrator.