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Hernandez v. DMSI Staffing, LLC

United States District Court, N.D. California

February 3, 2015

MARTINA HERNANDEZ, et al., Plaintiffs,
DMSI STAFFING, LLC., et al., Defendants

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For Martin Hernandez, an individual, appearing individually and on behalf of all others similarly situated, Plaintiff: Neal Jordan Fialkow, LEAD ATTORNEY, Law Ofc Neal J Fialkow, Pasadena, CA; Sahag Majarian, II, Law Office of Sahag Majarian II, Tarzana, CA.

For DMSI Staffing, LLC, Ross Stores, Inc., Defendants: David Brian Simpson, LEAD ATTORNEY, Gregory Donald Wolflick, Zoe J. Sussman, Wolflick & Simpson, Glendale, CA.

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EDWARD M. CHEN, United States District Judge.

On February 27, 2014, Plaintiff Martina Hernandez filed a class action complaint

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alleging various violations of California's labor code and California's Unfair Competition Law (" UCL" ), and bringing a representative claim under the Private Attorneys General Act (" PAGA" ). Docket No. 1-1 (" Compl." ). Ms. Hernandez brought this action against DMSI Staffing, LLC (" DMSI" ) and Ross Stores, Inc. (" Ross" ) (collectively " Defendants" ). Pending before the Court is Defendants' motion to compel arbitration.


Ms. Hernandez has filed a class action complaint against DMSI and Ross. Docket No. 1-1. Ms. Hernandez initially brought suit in Alameda County Superior Court, but Defendants removed the case in April of 2014. Docket No. 1. Ms. Hernandez's motion to remand was denied. Docket No. 38.

In her Complaint, Ms. Hernandez alleges she was jointly employed by DMSI and Ross to work in Ross's warehouse as a non-exempt employee who was paid by the hour. Compl. ¶ 1, 5. DMSI is a temporary staffing company that provides temporary staffing to Ross, a retail apparel store. According to DMSI's Administrative Director of Staffing Operations, Christine Harrison, Ms. Hernandez was hired by DMSI after DMSI replaced a staffing agency named MJO as Ross's staffing partner. Ms. Hernandez had previously been staffed in a Ross warehouse through MJO. Docket No. 39-2, Harrison Decl. ¶ ¶ 5-6. When she began work with DMSI on March 26, 2012, Ms. Hernandez signed a Dispute Resolution Agreement (" DRA" ). Docket No. 39-2. DMSI's Dispute Resolution Agreement provides:

This Agreement sets forth the procedures to resolve any and all disputes arising out of or related to your employment with DMSI and/or termination thereof. . . . All such disputes will be resolved by an arbitrator through final and binding arbitration. . . . This Agreement is governed by the Federal Arbitration Act, 9 U.S.C. Sec.1 et seq. . . . The arbitration shall be conducted with both parties having the right to conduct discovery and bring motions as provided for by the Federal Rules of Civil Procedure. However, there will be no right for any dispute to be brought, heard, or arbitrated as a Class or Collective Action of any sort of nature.

Harrison Decl., Ex. 1. Ms. Hernandez also signed a copy of the DRA in Spanish. Id., Ex. 2.

According to Ross's Human Resources Administrator for its Southwest Distribution Center, Tina Lobato, in September of 2012, Ms. Hernandez applied to and was hired directly by Ross. Docket No. 39-3 (" Lobato Decl." ) at ¶ ¶ 2-4; Ex. 1. Ms. Lobato attests that she participated in the orientations that were given to new employees like Ms. Hernandez. She states that the new hires were given a packet of Ross new hire documents, which were explained in both English and Spanish, depending on the mix of employees. Lobato Decl. P4. The new hires received a copy of Ross's employee handbook, called " Distribution & Transportation Associate Handbook." Lobato Decl. ¶ 6. The employee handbook contained an Arbitration Policy. Lobato Decl., Ex. 3. Ms. Hernandez signed an acknowledgment and agreement, recognizing that she " read, under[stood] and agree[d] to comply with the . . . Ross Arbitration Policy." Lobato Decl., Ex. 2. The Ross Arbitration Policy laid out at page 44 of the employee handbook provides:

This Arbitration Policy (" Policy" ) applies to any disputes, arising out of or relating to the employment relationship, between an associate and Ross or between an

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associate and any of Ross' agents or employees, whether initiated by an associate or by Ross. This policy requires all such disputes to be resolved only by an Arbitrator through final and binding arbitration . . . . This Policy is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. . . . 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. However, there will be no right or authority for any dispute to be brought, heard or arbitrated as a class action, private attorney general, or in a representative capacity on behalf of any person.

Lobato Decl., Ex. 3.

Ms. Hernandez alleges DMSI and Ross violated various provisions of California's labor code as well as the Industrial Wage Commission's (" IWC" ) order, including failure to pay minimum wage (Cal. Lab. C. § § 1194, 1194.2, 1197); failure to pay wages for all hours worked (Cal. Lab. C. § 204); failure to pay overtime (Cal. Lab. C. § § 510, 1194); failure to pay timely wages owed upon termination or quitting (Cal. Lab. C. § § 201-203); and failure to provide accurate and compliant wage statements (Cal. Lab. C. § 226). Ms. Hernandez alleges that, as a result of the labor code violations, the Defendants' business practices violated the UCL. Ms. Hernandez also seeks remedies under PAGA (Cal. Labor Code § § 2698 and 2699).

Ms. Hernandez alleges six causes of action individually and on behalf of similarly-situated class members. Compl. at 1. The seventh cause of action under PAGA is brought as a representative action. Id. at 13. The Class is defined as " [a]ll current and former non-exempt, hourly paid California employees who worked through DMSO and who were assigned to any of Ross's warehouse facilities in California for any period of time within four years prior to the initiation of this action through certification . . . and whose work time was tracked by one or more time management systems." Id. ¶ 9. Defendants have answered. Docket No. 6.

Plaintiff does not oppose arbitration of her labor code claims or her claim under the UCL. Solely at issue is Plaintiff's seventh cause of action, the representative claim under PAGA. Plaintiff contends that she has not waived and is not bound to arbitrate her PAGA claim. At the hearing on Defendants' motion to compel, Plaintiff made an oral motion to amend her Complaint to dismiss without prejudice her PAGA claim. The Court gave leave for the parties to file supplemental briefing on whether Plaintiff should be permitted to amend her Complaint under Rule 15. For the reasons discussed below, the Court DENIES Plaintiff's motion to amend her Complaint, GRANTS Defendants' motion to compel arbitration as to Plaintiff's first six causes of action, and DENIES in part and DEFERS in part Defendants' motion to compel arbitration of Plaintiff's representative PAGA claim.


A. Rule 15

At the hearing on the motion to compel, Plaintiff's counsel made an oral motion to amend, which Defendants opposed. The Court gave the parties leave for supplemental briefing on ...

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