United States District Court, S.D. California
JENNIFER LUCERO and RAFAEL SOLORZANO, individually and on behalf of all others similarly situated, Plaintiffs,
SEARS HOLDINGS MANAGEMENT CORPORATION, a Delaware Corporation; SEARS, ROEBUCK, AND CO., a New York Corporation; and DOES 1-50, inclusive, Defendants
For Jennifer Lucero, an Individual, on behalf of herself, and on behalf of all persons similarly situated, Rafael Solorzano, an Individual, on behalf of himself, and on behalf of all persons similarly situated, Plaintiffs: Norman B Blumenthal, LEAD ATTORNEY, Aparajit Bhowmik, Ruchira Piya Mukherjee, Blumenthal, Nordrehaug & Bhowmik, La Jolla, CA.
For Sears Holdings Management Corporation, a Delaware Corporation, Sears, Roebuck and Co., a New York Corporation, Defendants: Joseph C. Liburt, LEAD ATTORNEY, Orrick, Herrington & Sutcliffe, Menlo Park, CA.
ORDER GRANTING MOTION TO COMPEL ARBITRATION AND STAY ACTION (Doc. No. 6.)
Hon. Anthony J. Battaglia, United States District Judge.
The matter before the Court is Defendants Sears Holdings Management Corporation and Sears, Roebuck, and Co.'s motion to compel arbitration and stay the action (Doc. No. 6). Having fully and carefully considered the motion and opposition, the Court GRANTS the motion and stays the action for the reasons set forth herein.
A. Procedural Background
On January 29, 2014, Plaintiffs Jennifer Lucero and Rafael Solorzano (collectively, " Plaintiffs") filed a complaint, individually and on behalf of all others similarly situated, in the Superior Court of California for the County of San Diego, Case No. 37-2014-00000431-CU-OE-CTL. Lucero was employed by Defendants as an assistant store manager from February 2012 to April 2014. (Not. Remov. Ex. A ¶ 6 (" FAC"), Doc. No. 1-1.) Solorzano was employed by Defendants as an assistant store manager since September 2007. (Id. ¶ 7.) At all times during their employment with Defendants, Plaintiffs were classified as salaried employees exempt from overtime pay and legally required meal breaks. (Id. ¶ ¶ 6-7.)
On June 3, 2014, Plaintiffs filed their First Amended Complaint asserting five causes of action: (1) unfair competition; (2) failure to pay overtime compensation; (3) failure to provide accurate itemized wage statements; (4) failure to provide wage when due; and (5) violation of the Private Attorney General Act (" PAGA"). (FAC ¶ ¶ 55-104.) Plaintiffs seek relief in the form of restitution, unpaid wages, penalties under the Labor Code and Industrial Welfare Commission, injunctive relief, declaratory relief, and costs. (Id. at 40-41.)
On July 8, 2014, Defendants removed the action to this Court (Doc. No. 1) and on July 29, 2014, Defendants moved to compel arbitration and stay the action (Doc. No. 6). Plaintiffs filed an opposition on August 15, 2014, and Defendants later filed a reply. (Doc. Nos. 14-15.)
B. Factual Background
During the week of April 2, 2012, Defendants introduced an arbitration policy/ agreement (" the Agreement") under which participating employees and Defendants each waived the right to pursue certain claims in court, and agreed instead to submit such disputes to binding arbitration. (Kaselitz Decl. ¶ 5, Doc. No. 6-2.) The Agreement provides:
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 and Company 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 ...