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Nanavati v. Adecco USA, Inc.

United States District Court, N.D. California, San Jose Division

April 13, 2015

RAJAN NANAVATI, on behalf of himself and all others similarly situated, and on behalf of the general public, Plaintiff,
ADECCO USA, INC., Defendant

For Rajan Nanavati, on behalf of himself and all others similarly situation, and on behalf of the general public, Plaintiff: Kevin R Allen, LEAD ATTORNEY, Daniel Velton, Velton Zegelman PC, Sunnyvale, CA; Vijayta R Chetty, Sunnyvale, CA.

For Adecco USA, Inc., Defendant: Julie Westcott O'Dell, Julie Erin Patterson, Bryan Cave LLP, Irvine, CA.

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BETH LABSON FREEMAN, United States District Judge.

This lawsuit concerns alleged violations of the California Labor Code committed by defendant Adecco USA, Inc. (" Defendant" ). Plaintiff Rajan Nanavati (" Plaintiff" ) brings claims on behalf of himself and a putative class of others similarly situated, seeking recompense and penalties in connection with those alleged violations. Plaintiff also seeks to bring a representative action under California's Labor Code Private Attorneys General Act of 2004 (" PAGA" ), Cal. Lab. Code § 2698, et seq., which permits statutory penalties for violations of the Labor Code. Before the Court is Defendant's Motion to Compel Arbitration. Def.'s Mot., ECF 13. The Court heard oral argument on the motion on March 25, 2015. For the reasons stated herein, Defendant's Motion to Compel Arbitration is GRANTED.


Defendant is a Delaware Corporation with its corporate headquarters in Jacksonville, Florida. Compl. ¶ 17, ECF 1; Decl. of Virginia Watson ¶ 1, ECF 13-2. Defendant is " one of the largest staffing companies in the United States," and recruits and employs temporary employees (the company calls them " associates" ) who are placed at Defendant's client sites.

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Watson Decl. ¶ 1; see also Compl. ¶ ¶ 5, 17. Plaintiff was one such employee and was employed by Defendant " to perform services for defendant's client Google" for about four months from January to May 2014. Compl. ¶ 11; Watson Decl. ¶ 2. In a complaint originally filed in the Superior Court for the County of Santa Clara, Plaintiff alleges that during that period of employment, Defendant violated California labor laws by failing to compensate him for overtime and meal breaks, failing to keep accurate records of the number of hours he worked, and failing to promptly pay all compensation owed (including overtime and mealtime compensation) upon Plaintiff's termination from employment. Compl. ¶ ¶ 25-35. Plaintiff brings claims regarding these violations on behalf of himself and a class of similarly situated current and former employees who performed services for Defendant's clients in California in the four years prior to the filing of the complaint. Id. ¶ 22. On September 15, 2014, Defendant removed the action to federal court pursuant to the Class Action Fairness Act of 2005 (" CAFA" ), 28 U.S.C. § § 1332(d), 1453, 1711-15. Notice of Removal, ECF 1. This Court has jurisdiction under 28 U.S.C. § 1332(d).

On November 21, 2014, Defendant filed the instant motion to compel arbitration of Plaintiff's claims pursuant to a Dispute Resolution and Arbitration Agreement for Consultants/Associates (" Agreement" ) that Plaintiff signed as part of the " on-boarding" process to begin employment with Defendant. The Agreement provides that " the Company and Employee agree that any and all disputes, claims or controversies arising out of or relating to this Agreement, the employment relationship between the parties, or the termination of the employment relationship, shall be resolved by binding arbitration . . . ." Watson Decl. Exh. C (Agreement) at ¶ 1. In bold and capitalized font, the first paragraph concludes: " By signing this agreement, the parties hereby waive their right to have any dispute, claim or controversy decided by a judge or jury in a court." Id. Most salient to the issues before the Court, paragraphs 7 and 8 of the Agreement further provide (likewise in bold and capitalized font):

7. By signing this agreement, the parties agree that each may bring claims against the other only in their individual capacity, and not as a plaintiff or class member in any purported class and/or collective proceeding.
8. Furthermore, by signing this agreement, the parties agree that each may bring claims against the other only in their individual capacity and not in any representative proceeding under any private attorney general statute (" PAGA claim" ), unless applicable law requires otherwise. If the preceding sentence is determined to be unenforceable, then the PAGA claim shall be litigated in a civil court of competent jurisdiction and all remaining claims will proceed in arbitration.

Agreement at ¶ ¶ 7-8. Employees may opt out within 30 days of signing the arbitration agreement. Id. ¶ 9. In order to do so, an employee must first request a form from the human resources department via an email address provided in paragraph 9 of the Agreement. The same paragraph states clearly that " [a]n Employee who opts out as provided in this paragraph will not be subject to any adverse employment action as a consequence of that decision . . . ." Id. Failure to timely submit a completed opt out form constitutes acceptance of the Arbitration Agreement. Id.

The undisputed facts, as set forth in the declaration of Virginia Watson, the Senior Vice President of Operations for Defendant, show that Plaintiff reviewed and electronically signed the Agreement on

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January 21, 2014 as part of Defendant's " on-boarding" process for new hires.[1] Watson Decl. ¶ ¶ 4-10, Exh. C. Plaintiff furthermore acknowledged agreement to Defendant's Electronic Signature Agreement and acknowledged receipt and acceptance of the terms of the " on-boarding" forms. Id. ¶ ¶ 7, 13, Exhs. B, D. Based on her review of Plaintiff's records, as well as confirmation from Defendant's HR Department, Watson also attests that Defendant received no email from Plaintiff requesting the form that would allow him to opt out of the arbitration agreement, nor does Defendant have a signed opt out form from Plaintiff. Id. ¶ 12.

On December 5, 2014, after Defendant sought to compel arbitration, Plaintiff filed a complaint with the National Labor Relations Board (" NLRB" ) alleging unfair labor practices including, inter alia, the promulgation of an allegedly unlawful arbitration agreement. Pl.'s Opp. 3; Decl. of VJ Chetty ¶ 2, ECF 14-1; Pl.'s Request for Judicial Notice (" RJN" ) Exh. B, ECF 14-1.[2] At the March 26 hearing, Plaintiff indicated that the N.L.R.B. had investigated the allegations and communicated its intent to file a complaint against Defendant in the near future. Plaintiff requested orally that the Court stay this action pending resolution of the NLRB's complaint.


The Federal Arbitration Act (" FAA" ) governs the enforceability and scope of an arbitration agreement. 9 U.S.C. § § 1 et seq. Under the FAA, a party seeking to invoke an arbitration agreement may petition the district court " which, save for such agreement, would have jurisdiction [to hear the case], for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4; see also Trompeter v. Ally Financial, Inc., 914 F.Supp.2d 1067, 1071 (N.D. Cal. 2012).

A district court faced with a petition to enforce an arbitration clause engages in a limited two-part inquiry: first, it determines whether the arbitration agreement is valid, and second, it determines whether the agreement encompasses the claims at issue. See, e.g., Mitsubishi Motors Co. v. Soler Chrysler--Plymouth, 473 U.S. 614, 627-28 (1985); see also Trompeter, 914 F.Supp.2d at 1071. The FAA dictates that arbitration agreements are " a matter of contract," and " shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9. U.S.C. § 2. Such generally applicable contract defenses include " fraud, duress, or unconscionability, but not [ ] defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue." AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740, ...

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