United States District Court, E.D. California
EDWARD BORELLI, CHRISTINA PITASSI, and JAMES MUNIZ, Plaintiffs,
BLACK DIAMOND AGGREGATES, INC., and BASIC RESOURCES, INC., Defendants.
matter comes before the court on the parties'
cross-motions to compel arbitration. See ECF Nos.
46, 53. Defendants Black Diamond Aggregates, Inc.
(“Black Diamond”) and Basic Resources, Inc.
(“Basic Resources”) argue claims brought by
plaintiffs Edward Borelli, Christina Pitassi, and James Muniz
against Black Diamond should be subject to arbitration, with
the claims against Basic Resources stayed pending the outcome
of arbitration. Defs.' Mot. to Compel Arbitration
(“Defs.' Mot.”), ECF No. 46. Plaintiffs argue
they are not subject to arbitration. Pls.' Opp'n to
Defs.' Mot. (Pls.' Opp'n), ECF No. 52.
Alternatively, plaintiffs argue if they are subject to
arbitration, their claims against defendant Basic Resources
should be subject to arbitration as well. Pls.' Mot. to
Compel Arbitration (“Pls.' Mot.”), ECF No.
53. Defendant Basic Resources opposes plaintiffs' motion.
Defs.' Opp'n to Pls.' Mot. (Defs.'
Opp'n), ECF No. 55. For the following reasons, the court
GRANTS defendants' motion to compel arbitration with
plaintiffs Pitassi and Muniz, GRANTS plaintiffs' motion
to compel such that any arbitration will include Basic
Resources as a party, and will set a focused evidentiary
proceeding to hear testimony as to whether plaintiff Borelli
received the first page of his arbitration agreement.
are former employees of Black Diamond, a wholly owned
subsidiary of Basic Resources engaged in the trucking
business. See generally First Am. Compl., ECF No.
37. When each plaintiff began working at Black Diamond, each
signed an arbitration agreement that required binding
arbitration of all claims arising from employment. Gaalswyk
Decl. at 1-2, ECF No. 46-3. Borelli signed his arbitration
agreement on June 6, 2013. Borelli Arbitration Agreement
(“Borelli Agreement”), Gaalswyk Decl. at 4-5.
Pitassi signed her arbitration agreements on July 18, 2007
and March 21, 2008. Pitassi Arbitration Agreements
(“Pitassi Agreements”), Gaalswyk Decl. at 6-7.
Muniz signed his arbitration agreement on May 2, 2006. Muniz
Arbitration Agreement (“Muniz Agreement”),
Gaalswyk Decl. at 8. The arbitration agreements signed by
Pitassi and Muniz contain the same language, but the language
in Borelli's arbitration agreement is different from the
other two. The two types of arbitration agreements are
Borelli's Arbitration Agreement
employment arbitration agreement requires the parties to
submit to arbitration under the following terms:
If the parties are unable to resolve a dispute related to
this agreement through mediation, they shall submit any such
dispute (whether based on contract, tort, or statute duty or
prohibition against discrimination or harassment) to binding
arbitration, in accordance with the California Code of Civil
Procedure §§ 1280 through 1294.2 and the Rules of
the American Arbitration Association. Either party may
enforce the award of the arbitrator under Code of Civil
Procedure § 1285. The parties understand that they are
waiving their rights to a jury trial.
arbitration agreement contains the following language
regarding fees and costs associated with arbitration:
Basic Resources, Inc., shall pay the arbitrator's
expenses and fees, all charges, and any other expenses that
would not have been incurred if the case had been litigated
in the judicial forum having jurisdiction over it. Unless
otherwise ordered by the arbitrator, each party shall pay its
own attorney's fees, witness fees, and other expenses
incurred by the party for his or her own benefit.
The arbitrator may award the prevailing party his or her
expenses and fees of arbitration, including reasonable
attorneys' fees and witness fees, in such proportion as
the arbitrator decides.
arbitration agreement includes four signature lines for the
following parties: (1) “Employer”; (2)
“Employee”; (3) “Witness”; and (4)
“Human Resources.” Id. The only signed
lines are the employee line, which is signed by Borelli and
dated June 6, 2013, and the witness line, which is illegible
and dated 6-6-2013; the employer and human resources lines
are not signed. See id.
Arbitration Agreements Signed by Pitassi and Muniz
extent relevant to this motion, the arbitration agreements
signed by Pitassi and Muniz require the parties to submit to
arbitration as follows:
The undersigned Employer and Employee understand that any and
all controversies or claims arising out of, or relating to,
their employment relationship, or the termination thereof, or
this Employment Agreement or the breach thereof, that cannot
be resolved between or among the Employee and the Employer
and/or any of its representatives, agents and/or employees
(including claims of discrimination), shall be submitted
exclusively to binding arbitration before a neutral
arbitrator in accordance with the California Arbitration Act
(Code of Civil Procedure Section 1281 et seq.) except that
the Employee may seek available relief from any federal
and/or state agency where the law provides for such even
though the employee has signed an agreement providing that
all disputes shall be resolved by final and binding
Agreements; Muniz Agreement.
arbitration agreements contain the following language
regarding fees and costs associated with arbitration:
The Employer shall be responsible for all fees and costs
associated with the arbitration that exceed those fees and
costs that the Employee would be required to bear if his or
her action had been commenced in court . . . . The arbitrator
shall issue a written decision and award and shall award fees
and costs in accordance with applicable law.
arbitration agreements signed by Pitassi and Muniz include
four signature lines for the following parties: (1)
“Employer”; (2) “Employee”; (3)
“Witness”; and (4) “Human Resources
Director.” Id. The employer, employee, and
witness lines are Dated: all agreements; the human resources
director line is not signed. Id. Specifically,
Pitassi's first and second arbitration agreements are
identical except for the date. Pitassi signed her first
agreement on 7-18-2007 and her second on 3-21-2008; Ruth M.
Quadroa signed and dated Pitassi's agreements on the same
dates; and the employer line is signed illegibly by the same
individual and not dated on either agreement. Pitassi
Agreements. Muniz signed and dated his agreement on 5-2-2006;
an individual named Donna, last name illegible, signed and
dated the witness line with the same date; and the same
individual who signed the employer line on Pitassi's
agreement signed Muniz's agreement. Muniz Agreement.
Express Final and Binding Language
the signature lines, all agreements provided the following
language in all-caps:
THE UNDERSIGNED PARTIES UNDERSTAND THAT THIS AGREEMENT IS A
WAIVER OF ALL RIGHTS TO A CIVIL COURT ACTION FOR DAMAGES
ARISING OUT OF OR RELATING TO THEIR EMPLOYMENT RELATIONSHIP
AND THAT ONLY THE ARBITRATOR, NOT A JUDGE OR JURY, WILL
DECIDE THE DISPUTE AND ISSUE A FINAL AND BINDING DECISION AND
Agreement; Pitassi Agreements; Muniz Agreement.
September 9, 2014, Borelli filed this putative class action
against Black Diamond. ECF No. 1. The original action did not
identify future parties Pitassi, Muniz, or Basic Resources by
name. Id. at 1. In it, Borelli made claims under the
federal Fair Labor Standards Act, various sections of the
California Labor Code, California's Unfair Competition
Law, and the California Private Attorney General's Act
(PAGA). See generally Id. Borelli alleged, inter
alia, that Black Diamond failed to pay minimum wages,
failed to authorize and permit paid rest periods, and failed
to furnish accurate wage statements. See id.
January 22, 2015, Black Diamond filed a motion to compel
arbitration. ECF No. 9. On February 26, Borelli filed a
motion to amend the original complaint. ECF No. 19. On March
27, 2015, the court held a hearing on both motions. ECF No.
27. On September 4, 2015, the court granted Borelli's
motion to amend the complaint. Order at 6, ECF No. 36. In
doing so, the court denied Black Diamond's motion to
compel arbitration as moot, subject to renewal. Id.
September 8, 2015, Borelli filed a first amended complaint.
The amended complaint added James Muniz and Christina Pitassi
as plaintiffs, and added Basic Resources as a defendant.
First Am. Compl.
October 30, 2015, defendant Black Diamond renewed its motion
to compel arbitration, Defs.' Mot., and Basic Resources
joined the motion, ECF No. 50. Plaintiffs opposed, Pls.'
Opp'n, and defendants replied, Defs.' Reply, ECF No.
December 4, 2015, plaintiffs filed their motion to compel
arbitration, arguing that if plaintiffs are subject to
arbitration, co-defendant Basic Resources should also be
subject to arbitration. Pls.' Mot. at 3. Basic Resources
filed an opposition, Defs.' Opp'n, and plaintiffs
replied, Pls.' Reply, ECF No. 59.
parties raise multiple issues in their cross-motions to
compel arbitration. Specifically, they dispute whether (1)
the Federal Arbitration Act (FAA) or California Arbitration
Act (CAA) controls interpretation of the arbitration
agreements; (2) the arbitration agreements are valid and
enforceable against plaintiffs; (3) PAGA claims are subject
to arbitration under the agreements; (4) the arbitration
agreements are enforceable against defendant Basic Resources;
and (5) the action should be stayed. The court will address
each issue in turn.
Whether the FAA or CAA Should Govern
parties dispute whether the FAA or CAA governs the
arbitration agreements. See Pls.' Opp'n at
17-18; Defs.' Reply at 8-9. Defendants argue the
arbitration agreements are enforceable under both the FAA and
CAA. See Defs.' Reply at 8. Plaintiffs argue
only the CAA applies, Pls.' Opp'n at 17, and,
therefore, defendants' ...