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RAMIREZ v. CINTAS CORPORATION

November 2, 2005.

ROBERT RAMIREZ, et al. Plaintiff,
v.
CINTAS CORPORATION, Defendant.



The opinion of the court was delivered by: JEFFREY WHITE, District Judge

ORDER GRANTING IN PART AND DENYING IN PART MOTION OF DEFENDANT CINTAS CORPORATION TO DISMISS CLAIMS OF PLAINTIFF JAMES MORGAN OR, IN THE ALTERNATIVE, STAY HIS CLAIMS AND COMPEL ARBITRATION.
INTRODUCTION
This matter comes before the Court upon consideration of Cintas Corporation's ("Cintas") motion to dismiss the claims of plaintiff James Morgan ("Morgan") or, in the alternative, to compel arbitration and stay Morgan's claims. Having considered the parties' pleadings, relevant legal authority, having had the benefit of oral argument, and good cause appearing, the Court GRANTS the motion to compel arbitration on the conditions set forth herein and HEREBY STAYS this action as to Plaintiff Morgan. The Court DENIES Cintas' motion to the extent it seeks to dismiss Morgan's claims. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Morgan was employed by Cintas as a driver, a position also known as a Sales Service Representative, in San Leandro, California from approximately December 27, 1999 to March 26, 2004. (Fourth Am. Compl., ¶¶ 14, 33.) Morgan signed two versions of Cintas' employment agreements, a 1999 Version and a 2003 Version ("the 2003 Employment Agreement"), each of which contained an arbitration clause. It is the arbitration clause in the 2003 Employment Agreement that is pertinent to this motion (hereinafter "the Arbitration Clause"). Morgan's 2003 Employment Agreement is witnessed by an "Employer Witness" as well as an "Employee Witness." Morgan's witness is Ms. Hilary Toyryla, who is Cintas' Human Resources Manager. (Declaration of Hilary Toyryla ("Toyryla Decl."), ¶ 1.)

  Cintas' 2003 Employment Agreement is six pages long. (Toyryla Decl., Ex. B.) The Arbitration Clause is set forth on pages four and five of the 2003 Employment Agreement and is in the same type size and font as other provisions of that document. (See id.)

  The Arbitration Clause provides as follows:
8. EXCLUSIVE METHOD OF RESOLVING DISPUTES OR DIFFERENCES.
Should any dispute or difference arise between Employee and Employer concerning whether either party at any time violated any duty, right, law, regulation, public policy, or provision of this [Employment] Agreement, the parties will confer and attempt in good faith to resolve promptly such dispute or difference. The rights and claims of Employer covered by this Section 8, including the arbitration provisions below, include Employer's claims for damages, as well as reasonable costs and attorneys' fees, caused by Employee's violation of any provision of this [Employment] Agreement or any law, regulation, or public policy. The rights and claims of Employee covered by this Section 8, including the arbitration provisions below, specifically include but are not limited to all of Employee's rights or claims arising out of or in any way related to Employee's employment with Employer, such as rights or claims arising under the Age Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act of 1965, as amended (including amendments contained in the Civil Rights Act of 1991), the Americans with Disabilities Act, 42 U.S.C. § 1981, the Fair Labor Standards Act, the Employee Retirement Income Security Act, state anti-discrimination statutes, other state or local laws regarding employment, common law theories such as breach of express or implied contract, wrongful discharge defamation, and negligent or intentional infliction of emotional distress. Excluded from the arbitration provisions below in this Section 8 are all unemployment benefits claims, workers' compensation claims, claims for a declaratory judgment or injunctive relief concerning any provision of Section 4 of this [Employment] Agreement, and claims not lawfully subject to arbitration, including charges or complaints filed with an administrative agency (but not litigation connected with any such charge or complaint).
If any dispute or difference remains unresolved after the parties have conferred in good faith, either party desiring to pursue a claim against the other party will submit to the other party a written request to have such claim, dispute or difference resolved through impartial and confidential arbitration to be held in the county and state where Employee currently works for Employer or most recently worked for Employer. Any such request for arbitration must be submitted within one year of the date when the dispute or difference first arose or within one year of when the Employee's employment ends, whichever occurs first, unless a party claims a violation of a specific statute having its own specific statute of limitations, in which event that statutory time limit will apply. Arbitration under this [Employment] Agreement will be conducted in accordance with the AAA's National Rules for Resolution of Employment Disputes, except if such AAA rules are contrary to applicable state or federal law, applicable law shall govern.
In any arbitration proceeding, the arbitrator will apply the terms of this [Employment] Agreement as written, the Federal Arbitration Act, and other relevant federal and state laws, including time limits on claims. The parties will have the right to conduct civil discovery and bring motions, as provided by the Federal Rules of Civil Procedure and enforced by the Arbitrator. The arbitrator also will have the authority to award either party appropriate relief, including damages, costs and attorney's fees, as available under relevant laws. The Arbitrator will issue a decision or award in writing, stating the essential findings of fact and conclusions of law.
Except for worker's compensation claims, unemployment benefits claims, claims for a declaratory judgment or injunctive relief concerning any provision of Section 4 and claims not lawfully subject to arbitration, the impartial arbitration proceedings, as provided above in this Section 8, will be the exclusive, final and binding method of resolving any and all disputes between Employer and Employee. The arbitrator, however, will have the authority to entertain and decide a motion for reconsideration of the arbitration award.
(Toyryla Decl., Ex. B, at 4-5 (emphasis added).)

  In addition to the Arbitration Clause, the 2003 Employment Agreement contains a choice of law provision, which states that the 2003 Employment Agreement shall be "INTERPRETED, GOVERNED, AND ENFORCED ACCORDING TO THE FEDERAL ARBITRATION ACT, AND THE SUBSTANTIVE LAW (NOT INCLUDING CHOICE OF LAW PRINCIPLES) OF THE STATE OF OHIO." (Id. at 4 (bold and capitalization as in original).) The Arbitration Clause differs from prior versions of Cintas' arbitration clauses in that it does not expressly provide for a cap on the costs an employee would incur to institute or participate in arbitration proceedings.

  Morgan has filed a complaint against Cintas based on employment discrimination pursuant to 42 U.S.C. § 1981, as amended by the Civil Rights Act of 1991, Title VII, and California's Fair Housing and Discrimination Act and for violations of California Business and Professions Code § 17200, et seq.

  On March 22, 2005, this Court granted in part and denied in part a similar motion filed by Cintas with respect to different plaintiffs and involving different versions of Cintas employment agreements and arbitration clauses (the "March 22, 2005 Order"). Cintas now moves to dismiss Morgan's claims relying on the Arbitration Clause in his 2003 Employment Agreement. In the alternative, Cintas moves to compel arbitration and stay Morgan's claims.

  DISCUSSION

  A. Legal Standards Applicable to Motions to Compel Arbitration.

  Pursuant to the Federal Arbitration Act ("FAA"), arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds that exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Once the Court has determined that an arbitration agreement relates to a transaction involving interstate commerce, thereby falling under the FAA, the Court's only role is to determine whether a valid arbitration agreement exists and whether the scope of the parties' dispute falls within that agreement. 9 U.S.C. § 4; Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The parties in this case do not dispute that the claims at issue would fall within the scope of the Arbitration Clause; the only issue is whether the Arbitration Clause is valid and enforceable.

  The FAA represents the "liberal federal policy favoring arbitration agreements" and "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983). Under the FAA, if the Court determines that the parties have agreed to arbitrate and that agreement has not been honored, and the dispute falls within the scope of that agreement, the Court must order arbitration. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 400 (1967). This is true even if the result might be the maintenance of separate proceedings in different fora. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217 (1985).

  Where, as here, a litigant sues to enforce statutory claims, that fact alone will not preclude arbitration. The Supreme Court has "recognized that federal statutory claims can be appropriately resolved through arbitration, and [it has] enforced agreements to arbitrate that involve such claims." Green Tree Fin. Corp. — Alabama v. Randolph, 531 U.S. 79, 89 (2000). If statutory claims are involved and an arbitration agreement exists, the agreement should be enforced "unless Congress itself has evinced an intention to preclude waiver of judicial remedies for the statutory rights at issue," or the litigant cannot effectively vindicate "[his or her] statutory cause of action in the arbitral forum." Gilmer v. Interstate Johnson/Lane Corp., 500 U.S. 20, 26-28 (1991).

  Finally, notwithstanding the liberal policy favoring arbitration, by entering into an arbitration agreement, two parties are entering into a contract. Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 479 (1989) (noting that arbitration "is a matter of consent, not coercion"). Thus, an arbitration agreement is "subject to all defenses to enforcement that apply to contracts generally." Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1170 (9th Cir. 2003). Although the Court initially can determine whether a valid agreement to arbitrate exists, disputes over the meaning of specific terms within that agreement are matters for the arbitrator to decide. Howsam v. Dean Witter Reynolds, ...


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