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Mill v. Kmart Corp.

United States District Court, N.D. California

November 26, 2014

KERRY MILL, Plaintiff,
v.
KMART CORPORATION, et al., Defendants

For Kerry Mill, on behalf of herself, all other similarily situtated, and the general public, Plaintiff: Chaim Shaun Setareh, LEAD ATTORNEY, Setareh Law Group, Beverly Hills, CA; Neil Michael Larsen, Setareh Law Group, Los Angeles, CA.

For KMART Corporation, an Illinois corporation, Sears Holdings Management Corporation, a Delaware corporation, Defendant: Christian N Brown, Orrick, Herrington & Sutcliffe, San Francisco, CA; Joseph Charles Liburt, Orrick, Herrington & Sutcliffe LLP, Menlo Park, CA.

ORDER GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION AND STAY ACTION Dkt. No. 14

KANDIS A. WESTMORE, United States Magistrate Judge.

On September 2, 2014, Defendants Kmart Corporation (" Kmart") and Sears Holding Management Corporation (" SHMC") filed a Motion to Compel Arbitration and Stay Action pursuant to the arbitration agreement introduced in 2010 under which participating employees and Defendants waived their right to pursue employment-related claims in court in favor of submitting such disputes to binding arbitration. (Defs.' Mot., Dkt. No. 14 at 3.)

On November 25, 2014, the Court held a hearing. For the reasons set forth below, the Court finds the arbitration agreement enforceable and, accordingly, GRANTS Defendants' Motion to Compel Arbitration and Stay Action.

I. BACKGROUND

During the week of April 2, 2012, Kmart introduced an arbitration policy/agreement (" Agreement") under which participating employees and Kmart each waived the right to pursue employment-related claims in court, and, instead, agreed to submit such disputes to binding arbitration. (Decl. of Kaselitz Decl., " Kaselitz Decl., " Dkt. No. 11-2 ¶ 5). 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.

(Arbitration Agreement, Kaselitz Decl., Ex. A at 1(emphasis in original).) The Agreement further provides:

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.

Id.

Prior to September 14, 2012, Kmart employees participated in trainings and acknowledged their receipt of various employment policies using both Kmart's My Personal Information (" MPI") portal and the former training system known as the " Online Performance Training System." (Kaselitz Decl. ¶ 7). Once logged into the MPI portal, employees may print any documents or pages viewed in the portal, using Kmart-owned equipment and supplies and at no cost to the employee. Id. at ¶ 8. Prior to September 14, 2012, employees were required to complete a series of policy acknowledgements in the MPI portal. Id. at ¶ 9. Prior to acknowledging the receipt of the Agreement, the link to the Agreement appears in red-colored font on the " Policy Acknowledgements" page. Id. at ¶ 10. Upon clicking the link for the Agreement acknowledgement, the employee is brought to a page containing four additional links, labeled (i) " Arbitration Policy/Agreement (PDF)"; (ii) " Arbitration Policy/Agreement (Text)"; (iii) " 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 (iv) " Acknowledgement receipt of the Arbitration Policy/Agreement." Id. at ¶ 11. 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. at ¶ 12. 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. at ¶ 13 (emphasis in original). To submit their acknowledgement, employees are required to click on the " Yes" button and then click " Submit." Id. at ¶ 14.

Plaintiff Kerry Mill was hired by Kmart on September 14, 2011. (Kaselitz Decl. ¶ 19.) Plaintiff received the Agreement during the week of April 2, 2012. Id. at ¶ 20. On April 21, 2012, Plaintiff acknowledged receipt of the Agreement by clicking " Yes" and " Submit" on the Agreement's acknowledgement page. (Kaselitz Decl. ¶ ¶ 21-22, Ex. C.) Following her review and acceptance of the Agreement, Plaintiff had a 30-day period during which she could revoke her acceptance of the Agreement. (Kaselitz Decl. ¶ 23.) Plaintiff did not revoke her acceptance of the Agreement within the 30-day period, nor did she attempt to do so at any time thereafter. Id. at ¶ 24. Other employees did opt out. ( See Kaselitz Decl., Ex. D.)

On May 13, 2014, Plaintiff filed a class action complaint in Alameda County Superior Court alleging violations of California wage and hour laws. Thereafter, it was removed to federal court. Plaintiff filed an amended complaint to add a claim for civil penalties under California's Private Attorneys General Act (" PAGA"), California Labor Code § 2698 et seq . (Am. Compl., Dkt. No. 5-1.)

On September 2, 2014, Defendants filed a motion to compel arbitration and to stay the action. On September 22, 2014, the Court granted the parties' stipulated briefing schedule for the instant motion. On September 23, 2014, Plaintiff filed her opposition. (Pl.'s Opp'n, Dkt. No. 18.) On October 3, 2014, Defendants filed their reply. (Defs.' Reply, Dkt. No. 19.) ...


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