Case Number: BC709915 Hearing Date: December 28, 2018 Dept: 56
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES – CENTRAL DISTRICT
ADELA SOTELO,
Plaintiff,
vs.
DMS FACILITY SERVICES INC., et al.,
Defendants.
CASE NO.: BC709915
[TENTATIVE] ORDER RE: MOTION TO COMPEL ARBITRATION
8:30 a.m.
December 28, 2018
Dept. 56
This is an action arising from Plaintiff’s employment as a janitor for Defendants. On June 13, 2018, Plaintiff filed the operative Complaint alleging causes of action for (1) failure to pay wages, (2) failure to pay minimum wages, (3) failure to pay overtime compensation, (4) failure to provide meal and rest periods, (5) failure to provide itemized wage and hour statements, (6) PAGA, (7) failure to permit inspection of personnel and payroll records, (8) unfair competition, and (9) conversion.
Defendants DMS Facility Services, Inc. and DMS Facility Services, LLC seek to compel arbitration based on an arbitration agreement executed by Plaintiff purportedly encompassing the Complaint’s claims. (See Lopez Decl., Exhibit A.)
Plaintiff opposes the Motion on the grounds that (1) Defendants have failed to establish the existence of any arbitration agreement, (2) the agreement was procured via fraud in the execution, (3) the arbitration agreement does not encompass Plaintiff’s statutory claims, (4) the agreement is unconscionable, and (5) Plaintiff’s Labor Code and PAGA claims are not arbitrable.
Plaintiff first argues that Defendants have not offered an admissible arbitration agreement; rather, Plaintiff argues there is no foundation for the agreement and that the agreement is hearsay because Defendants do not demonstrate the agreement is a business record. The Court disagrees. The subject arbitration agreement is properly authenticated. (Carillo Decl. ¶¶ 3-5; Lopez Decl. ¶¶ 4-6.)
Plaintiff next argues that the agreement is void due to fraud in the execution; specifically, Plaintiff contends Defendants concealed the nature of the subject agreement. The Court rejects this argument. The title for the agreement—“ASSIGNED EMPLOYEE ACKNOWLEDGEMENTS”—is not contrary to an arbitration provision. Plaintiff’s arguments that the arbitration provision was not apparent and that Plaintiff was presented with the agreement as a condition of her employment are arguments relevant to procedural unconscionability and not fraud. Further, Plaintiff did not request the agreement in Spanish (Lopez Decl. ¶ 5), such that her failure to review the agreement is negligence on her part. (Rosenthal v. Great W. Fin. Sec. Corp. (1996) 14 Cal.4th 394, 423.)
Plaintiff argues her Labor Code claims are not subject to arbitration. Lab. Code § 229 states, “Actions to enforce the provisions of this article for the collection of due and unpaid wages claimed by an individual may be maintained without regard to the existence of any private agreement to arbitrate.”
Defendants argue that the FAA preempts Lab. Code § 229. (See, e.g., Perry v. Thomas (1987) 482 U.S. 483, 492.) The party seeking to enforce an arbitration agreement has the burden of demonstrating FAA preemption. (Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 687.) The FAA applies to arbitration provisions contained in any “contract evidencing a transaction involving commerce” (9 U.S.C. § 2), and the term “transaction involving commerce” is given broad effect by courts applying the FAA to such contracts (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 268). The United States Supreme Court has construed these words as “extending the Act’s reach to the limits of Congress’ Commerce Clause power.” (Ibid.)
Here, Defendants state that they have offices in Arizona and California which provide janitorial services (among other services) and that Plaintiff provides janitorial services with products purchased from other states (Carillo Decl. ¶¶ 2, 4.) This is a sufficient showing that the subject agreement involves interstate commerce. (See Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 282.) Thus, the FAA preempts Lab. Code § 229.
Plaintiff also argues the arbitration provision does not encompass her Labor Code claims because it does not unambiguously refer to statutory claims. (See Hoover v. American Income Life Ins. Co. (2012) 206 Cal.app.4th 1206.) Where the FAA applies, however, “questions concerning the construction and scope of the arbitration clause are determined by federal law.” (Baker v. Aubry (1989) 216 Cal.App.3d 1259, 1263.) Further, Plaintiff fails to cite any federal authority interpreting an arbitration provision as broad as that found in the subject contract not to include statutory claims.
Plaintiff next argues the agreement is unconscionable. Plaintiff argues the agreement is substantively unconscionable because it is one-sided; specifically, Plaintiff contends that the agreement impermissibly states, “no one other than counsel for SOI may waive this agreement for SOI . . . .” (See Lopez Decl., Exhibit A.) This provision, however, does not relate to mutuality. It is included because Defendants are corporate entities. No such provision is necessary for Plaintiff because by default no one can waive the agreement on her behalf other than Plaintiff or her attorney.
Plaintiff next argues that the agreement is impermissibly titled—but again, this relates to procedural unconscionability.
Plaintiff also argues that the agreement does not specify the fees which are to be paid by Plaintiff. (Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal. 4th 83, 102 (“Armendariz”).) To the extent the agreement is silent on this issue, however, the Court orders that Defendants pay for all fees unique to arbitration. (See Little v. Auto Stiegler, Inc. (2003) 29 Cal. 4th 1064, 1085.)
Finally, Plaintiff argues that the agreement does not indicate what arbitration and procedural rules will govern the arbitration; however, this is a non-issue to the extent the subject agreement states that the parties are to mutually agree to an arbitrator and arbitration service, which necessarily also entails mutual agreement as to the rules which will apply. Because Plaintiff has failed to demonstrate substantive unconscionability, Plaintiff’s unconscionability defense fails. (Armendariz, supra, 24 Cal.4th 83, 114 [defense of unconscionability requires both procedural and substantive unconscionability].)
On the other hand, the Court will not order arbitration as to Plaintiff’s PAGA claim. (Iskanian v. CLS Transp. Los Angeles, LLC (2014) 59 Cal.4th 348.) Plaintiff’s PAGA claim is stayed pending arbitration. In sum, the Motion to Compel Arbitration is GRANTED IN PART as set forth herein. The Court sets a status conference for July 1, 2019, at 8:30 AM in Department 56. The parties are to submit a joint status report by June 27, 2019.
Defendants are ordered to give notice of this ruling.
Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.
Dated this 28th day of December 2018
Hon. Holly J. Fujie
Judge of the Superior Court