COMPEL ARBITRATION AND ORDER DENYING MOTION TO 11-cv-2609 Docket No. 39 GRANTING MOTION TO 10-cv-2671 Docket No. 25
Two proposed class action cases against Nordstrom, Inc. ("Nordstrom") are currently in front of this court. In Case No. 11-cv-2609 ("Balasanyan"), Plaintiffs filed the action in Los Angeles Superior Court on April 5, 2011. It was removed to federal court, then transferred to this court on November 9, 2011. Nordstrom now moves to compel arbitration. In Case No. 10- cv-2671 ("Mareventano"), Plaintiffs filed the complaint in San Diego Superior Court, North County, in October of 2010, and the case was removed to this court in December of 2010. Nordstrom moves to consolidate the two cases if its motion to compel arbitration is denied. For the reasons stated below, the motion to compel arbitration is DENIED, and the motion to consolidate the cases is GRANTED.
The Balasanyan complaint alleges that Nordstrom has underpaid its sales staff across the country. The named Plaintiffs are both salespersons at Nordstrom stores in Los Angeles County. Plaintiffs and members of the proposed class are paid commission wages based on net sales. First Amended Complaint ("FAC") ¶ 11. However, Nordstrom's policy manuals require salespeople to spend at least thirty minutes per work shift on assignments that cannot lead to making sales, such as stocking merchandise and taking inventory. ¶ 13. Nordstrom allegedly also requires employees to spend at least thirty additional minutes per work shift performing marketing activity such as contacting customers to inform them of new product lines. ¶ 14. According to the FAC, "[t]he combined time Plaintiffs and Class Members are required to engage in non-commission producing activities totals at least one (1) hour and fifteen (15) minutes per work shift" for which there is no compensation. ¶ 15.
The Balasanyan FAC states five causes of action: (1) Nonpayment of wages under Cal. Labor Code §1194, § 1197; (2) Nonpayment of wages under 29 U.S.C. § 206 (the Fair Labor Standards Act); (3) Declaratory Relief under Cal. Civ. Code Proc. § 1060; (4) Unfair Business Practices under Cal Bus. & Prof. Code § 17200; and (5) a PAGA claim under Cal. Labor Code §
Plaintiff Mareventano was an employee of Nordstrom in San Diego County and Plaintiff Kurji was an employee in Orange County. Unlike Balasanyan, the proposed Mareventano class only consists of California employees. The Mareventano FAC alleges that Nordstrom failed to pay employees for "stocking time . . . unless they failed to meet their minimum commission draw." ¶ 21. It states four causes of action: (1) Violation of Cal. Labor Code § 1194, § 1197; (2) Violation of Cal. Labor Code §§ 201-203; (3) Willful violation of Cal. Labor Code § 226; (4) Unfair Business Practices under Cal. Bus. & Prof. Code § 17200.
II. LEGAL STANDARD AND DISCUSSION
A. Motion to Compel Arbitration
1. The Arbitration Agreement
Nordstrom's motion to compel arbitration ("Arb. Mtn.") argues that the court must not hear this case because the parties signed an arbitration agreement, the Nordstrom Dispute Resolution Agreement ("agreement" or "DRA"). Though there has apparently been an arbitration agreement in place since 2004, Defendant asserts that the operative agreement is the one that was "rolled out" in August 2011. Arb. Mtn. at 2. The arbitration clause in question is part of Nordstrom's Dispute Resolution Program, which states that it is governed by the FAA and "applies to any disputes arising out of or related to your application for employment with Nordstrom . . . , your employment with Nordstrom or the termination of your employment." Porter Decl., Ex. A at 2. Further, the agreement "is intended to apply to the resolution of past, present, and future disputes that otherwise would be resolved in a court of law and requires that all such disputes be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial except as otherwise stated in this Agreement." Id. The agreement expressly requires individual arbitration and precludes class or collective arbitration. Id. at 3.
Apparently, the DRA was originally mailed to employees in June, 2011, which is about two months after the Balasanyan complaint was filed in state court. In August, Nordstrom employees were given "the most current version" of the DRA at work and asked to sign a form acknowledging receipt of the information.
The agreement is a four-page document entitled "Nordstrom Dispute Resolution Program," and one of the sections is entitled "Dispute Resolution Agreement." When Nordstrom provided the agreement to employees, another document entitled "Nordstrom Dispute Resolution Agreement" was attached (hereafter the "acknowledgment"). The acknowledgment asked for the employee's signature below the following statement: "I acknowledge that I have received a copy of the Nordstrom Dispute Resolution Agreement and understand that it will continue to apply even after my separation from Nordstrom." Plaintiffs have also submitted a document they claim was Nordstrom's set of instructions to human resources employees who were to discuss the new policy with employees. Shamtoub Decl. Ex. 5. That document explains that the acknowledgment "is simply an acknowledgment reflecting [the employees] received the updated DR Program; it is not an Agreement." It also says: "Let them know regardless of whether they sign, the updated Program applies to their employment effective immediately."
Plaintiff Balasanyan signed the acknowledgment on August 31, 2011. Defendant states that Plaintiff Nalbandian was on a leave of absence when the DRA was given to employees, but that when she returned to work, she informed her HR manager that she ...