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Velazquez v. Sears, Roebuck and Co.

United States District Court, Ninth Circuit

August 26, 2013

FELIPA VALENCIA VELAZQUEZ, an individual, and on behalf of all others similarly situated, Plaintiff,
SEARS, ROEBUCK AND CO., a New York Corporation; SEARS FULL LINE STORES, an unknown business entity; and DOES 1 through 50, inclusive, Defendants.


WILLIAM Q. HAYES, District Judge.

The matter before the Court is the Motion to Compel Arbitration and Stay Action, filed by Defendants. (ECF No. 10).

I. Background

On December 10, 2012, Plaintiff initiated this action by filing a Complaint in San Diego County Superior Court against Defendants Sears, Roebuck and Co. and Sears Full Line Stores (collectively, "Sears" or "Defendants"). (ECF No. 1-1). The Complaint asserts four class-wide claims for relief based upon Plaintiff's employment with Sears. The four claims are: (a) failure to pay minimum wages; (b) failure to provide accurate statements and maintain required records; (c) failure to pay all wages due to discharged or quitting employees; and (d) unlawful business practices.

On March 19, 2013, Sears removed the action to this Court, alleging diversity subject-matter jurisdiction. (ECF No. 1).

On May 3, 2013, Sears filed the Motion to Compel Arbitration and Stay Action. (ECF No. 10). On May 28, 2013, Plaintiff filed an opposition to the Motion to Compel Arbitration and Stay Action. (ECF No. 12). On June 3, 2013, Sears filed a reply. (ECF No. 13).

II. Facts

During the week of April 2, 2012, Sears introduced an arbitration policy/agreement ("Agreement") under which participating employees and Sears each waived the right to pursue employment-related claims in court, and agreed instead to submit such disputes to binding arbitration. (Kaselitz Decl. ¶ 5, ECF No. 10-1). The Agreement contains an introduction, which states:

Under this Agreement, and subject to certain exceptions specified within the Agreement, all employment-related disputes between you (Associate') and Company that are not resolved informally shall be resolved by binding arbitration in accordance with the terms set forth below. This Agreement applies equally to disputes related to Associate's employment raised by either Associate or by Company.
Accordingly, Associate should read this Agreement carefully, as it provides that virtually any dispute related to Associate's employment must be resolved only through binding arbitration. Arbitration replaces the right of both parties to go to court, including the right to have a jury decide the parties' claims. Also, this Agreement prohibits Associate from filing, opting into, becoming a class member in, or recovering through a class action, collective action, representative action or similar proceeding.
If Associate does not wish to be bound by the Agreement, Associate must opt out by following the steps outlined in this Agreement within 30 days of receipt of this Agreement. Failure to opt out within the 30-day period will demonstrate Associate's intention to be bound by this Agreement and Associate's agreement to arbitrate all disputes arising out of or related to Associate's employment as set forth below.

Id., Ex. A at 1, ECF No. 10-2 (emphasis in original). The Agreement states:

Except as it otherwise provides, this Agreement applies, without limitation, to disputes regarding the employment relationship, trade secrets, unfair competition, compensation, pay, benefits, breaks and rest periods, termination, discrimination, or harassment and claims arising under the Uniform Trade Secrets Act, Civil Rights Act of 1964, Americans with Disabilities Act, Age Discrimination in Employment Act, as amended, Family and Medical Leave Act, Fair Labor Standards Act, Employee Retirement and Income Security Act, Genetic Information Non-Disclosure Act, and any and all state statutes addressing the same or similar subject matters, and all other state or federal statutory and common law claims.


Prior to September 14, 2012, Sears employees participated in annual training and acknowledged their receipt of various employment policies using Sears' My Personal Information ("MPI") portal. (Kaselitz Decl. ¶ 7, ECF No. 10-1). Once logged into the MPI portal, employees may print any documents or pages viewed in the portal, using Sears-owned equipment and supplies and at no cost to the employee. Id. ¶ 9. Employees were required to complete a series of policy acknowledgements in the MPI portal. Id. ¶ 11. Prior to acknowledging the receipt of the Agreement, the link to the Agreement appears in red-colored font on the "Policy Acknowledgements" page. Id. ¶ 12. Upon clicking the link for the Agreement acknowledgement, the employee is brought to a page containing four additional links, labeled (a) "Arbitration Policy/Agreement (PDF)"; (b) "Arbitration Policy/Agreement (Text)"; (c) "Opt Out form Action is required to protect your legal rights to sue the Company in court and/or to participate in any way in a class action, collective action or representative action"; and (d) "Acknowledgement receipt of the Arbitration Policy/Agreement." Id. ¶ 13. After reviewing the Agreement and Opt Out form, employees are asked to acknowledge their receipt of the Agreement by clicking on the "Acknowledge receipt of the Arbitration Policy/Agreement" link. Id. ¶ 14. Upon clicking on the acknowledgement link, the employee receives the following message on the acknowledgement page:

By clicking below, I acknowledge that I have reviewed and agreed to the terms and conditions set forth in the Arbitration Policy/Agreement. I also understand that I may change my mind and opt out of the Agreement within 30 days of today's date by returning the Arbitration Policy/Agreement Opt Out form located at the end of the Agreement.

Id. ¶ 15.

Plaintiff was hired by Sears in June 2002. Id. ¶ 21. Plaintiff received the Agreement during the week of April 2, 2012. Id. ¶ 22. On April 12, 2012, Plaintiff acknowledged receipt of the Agreement by clicking "Yes" and "Submit" on the Agreement's acknowledgement page. Id. ¶ 23; see also id., Ex. B, ECF No. 10-3 at 9. Following her review and acceptance of the Agreement, Plaintiff had a 30-day window during which she could revoke her acceptance of the Agreement. (Kaselitz Decl. ¶ 25, ECF No. 10-1). Plaintiff ...

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