United States District Court, S.D. California
WILLIAM Q. HAYES, District Judge.
The matter before the Court is the Motion to Dismiss and Compel Arbitration filed by Defendant Terminix International, Inc. (ECF No. 10).
On December 18, 2014, Plaintiff Jeff Eubank commenced this action by filing a class action complaint in San Diego County Superior Court. (ECF No. 1-2). On January 21, 2015, Defendant Terminix International, Inc. removed to this Court pursuant to the Class Action Fairness Act, 28 U.S.C. section 1332(d). (ECF No. 1). On January 27, 2015, Defendant filed a motion to dismiss and compel arbitration. (ECF No. 5). On February 7, 2015, Plaintiff filed the First Amended Complaint ("FAC"), which is the operative complaint in this case. (ECF No. 7). On February 13, 2015, the Court issued an Order denying the motion to dismiss and compel arbitration as moot. (ECF No. 8).
On February 26, 2015, Defendant filed the Motion to Dismiss and Compel Arbitration. (ECF No. 10). On March 23, 2015, Plaintiff filed an opposition. (ECF No. 12). On March 30, 2015, Defendant filed a reply. (ECF No. 13).
On April 21, 2015, the Court issued an Order, granting in part the Motion to Dismiss and Compel Arbitration. (ECF No. 19). The Court directed the parties "to proceed to arbitration in accordance with the terms of the Plan with respect to Plaintiff's first through sixth and ninth claims" but left the motion pending with respect to Plaintiff's seventh and eighth claims brought pursuant to California's Private Attorneys General Act of 2004 ("PAGA"). Id. at 8. In opposition and at oral argument, Plaintiff contended that the representative action waiver in the parties' arbitration agreement (the "Plan") was unenforceable to the extent that it entirely extinguished his PAGA claims. The Court therefore requested supplemental briefing on whether "the Plan's representative action waiver, if interpreted to cover Plaintiff's seventh and eighth claims, falls under the effective vindication' exception to the FAA." Id. at 7.
On May 5, 2015, Defendant filed a supplemental brief. (ECF No. 20). On May 18, 2015, Plaintiff filed an opposition. (ECF No. 21). On May 26, 2015, Defendant filed a reply. (ECF No. 23). On June 19, 2015, Plaintiff filed a Notice of Lodgment of Supplemental Authority. (ECF No. 24). On June 25, 2015, Defendant filed a response to Plaintiff's Notice of Lodgment of Supplemental Authority. (ECF No. 25). On June 25, 2015, Plaintiff filed an objection to Defendant's response. (ECF No. 26). On June 29, 2015, the Court issued an Order, granting Plaintiff leave to file a three-page response to Defendant's response. (ECF No. 27). On July 2, 2015, Plaintiff filed a response to Defendant's response. (ECF No. 28).
II. Allegations of the FAC
"This is a representative action for recovery of penalties under the California Labor Code Private Attorneys General Act of 2004 (PAGA'), Cal. Lab. Code section 2698 et seq." (ECF No. 7 at 2). "Plaintiff brings this action pursuant to PAGA, on behalf of himself and for the benefit of all other persons employed by Defendants, and each of them, in the position of pest control technician' covered by Wage Order 5 who were not paid wages pursuant to California law prior and subsequent to the date this action was filed, during the PAGA Period (which commences one year prior to the filing of this action and continues until judgment is rendered herein) (hereinafter AGGRIEVED EMPLOYEES')[.]" Id.
"Defendant maintained time records using portable devices, and an application installed on the devices." Id. at 6. Plaintiff and other "aggrieved employees" were required to use this device to clock out for lunch, but "it was frequently not possible to take a meal break before the end of the fifth hour of work." Id. After five hours, the application would prevent Plaintiff and "aggrieved employees" from clocking out for lunch. Plaintiff and "aggrieved employees" were instructed that "they must clock out to create an artificial time punch showing that a timely meal break was provided, regardless of whether they in fact worked through their meal breaks." Id. "As a result, Plaintiff and aggrieved employees are not relieved of all duties during their meal and rest periods as is required by law." Id. at 7.
"Further, Defendants do not fully pay Plaintiff and aggrieved employees for time spent performing required activities that are necessary and integral to their overall employment responsibilities." Id. For example, Plaintiff and "aggrieved employees" are not paid for waiting time at the beginning of their shifts.
Plaintiff asserts the following claims for relief on his own behalf: (1) minimum wages and liquidated damages pursuant to California Labor Code sections 558, 1194.2, 1197 and 1198, and Wage Order 5; (2) overtime and double time wages pursuant to California Labor Code sections 218.6, 558, and 1194, and Wage Order 5; (3) rest periods pursuant to California Labor Code sections 226.7, 558, and 1198, and Wage Order 5; (4) meal periods pursuant to California Labor Code sections 226.7, 512, 558, and 1198, and Wage Order 5; (5) itemized wage statement penalties pursuant to California Labor Code sections 226 and 558; (6) waiting time penalties pursuant to California Labor Code sections 201 through 203 and 558; and (7) restitution for unlawful competition in violation of Business and Professions Code sections 17200 et seq. ("UCL"). Plaintiff asserts the following claims for relief on his own behalf and on behalf of "aggrieved employees": (1) penalties under California Labor Code section 558; and (2) remedies under California Private Attorneys General Act of 2004 ("PAGA"). Plaintiff requests damages, restitution, Labor Code penalties, interest, costs, attorneys' fees, civil penalties, and penalties pursuant to PAGA.
On May 20, 2008, Plaintiff executed an Arbitration Agreement in connection with his employment with Defendant. (Declaration of Lisa Shapleigh ("Shapleigh Decl.) ¶ 4). "On August 15, 2012, Plaintiff executed the We Listen Dispute Resolution Plan 2012 revision." Id. ¶ 5.
The We Listen Dispute Resolution Plan (the "Plan") provides:
The Company and I mutually consent to resolution under the Plan and to final and binding arbitration of all Disputes, including, but not limited to, any preexisting, past, present, or future Disputes, which arise out of or are related to my application for employment, my employment, the termination of my employment, or reemployment, on-duty or off-duty, in or outside the workplace, that I may have against any of the following: (i) the Company; (ii) its current and former officers, directors, employees, or agents in their capacity as such or otherwise; (iii) the Company's parent, subsidiary, and affiliated entities; and/or (iv) all successors and assigns of any of them, or that the Company may have against me. Further, Disputes include any claim or controversy regarding the Plan itself or its interpretation, applicability, unconscionability, arbitrability, enforceability or formation, with the exception noted in the Class Action Waiver clause.
Shapleigh Decl. Ex. B, ECF No. 10-1 at 10. The Plan covers "claims under federal or state law regarding wages, wage penalties, classification, reimbursement of expenses, compensation, stock or incentive bonus plans, or intellectual property rights and associated laws." Id. The Plan provides for a three-step dispute resolution process: (1) Senior Executive Review; (2) Mediation; and (3) Arbitration.
Clause Eight of the Plan is titled "Jury Trial Waiver and Exclusive Remedy" and provides, in relevant part:
I HEREBY WAIVE MY RIGHT TO A COURT OR JURY TRIAL AND AGREE THAT THE PLAN IS THE EXCLUSIVE REMEDY THE COMPANY AND I HAVE FOR RESOLUTION OF DISPUTES... If I do file a claim in any federal or state court or administrative tribunal, the Company may seek a stay or dismissal of the claim and compel arbitration and the dispute resolution steps under ...