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Armenta v. Go-Staff, Inc.

United States District Court, S.D. California

May 3, 2017

FLORA ARMENTA, Plaintiff,
v.
GO-STAFF, INC., et al., Defendant.

          ORDER GRANTING DEFENDANT GO-STAFF, INC.'S MOTION TO COMPEL ARBITRATION AND STAY COURT ACTION (ECF NO. 4)

          HON. JANIS L. SAMMARTINO UNITED STATES DISTRICT JUDGE.

         Presently before the Court is Defendant Go-Staff, Inc.'s (“Go-Staff” or “Defendant”) Motion to Compel Arbitration and Stay Court Action. (“Mot. to Compel, ” ECF No. 4.) Plaintiff Flora Armenta (“Armenta” or “Plaintiff”) filed a response in opposition to Defendant's motion (“Opp'n, ” ECF No. 7), and Defendant filed a reply in support of its motion (“Reply, ” ECF No. 15). On March 9, 2017 the Court vacated the hearing on the motion and took the matter under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 14.) After considering the parties' arguments and the law, the Court GRANTS Defendant's Motion to Compel Arbitration.

         BACKGROUND

         On October 12, 2016, Plaintiff filed a class action complaint (“Complaint”) against Defendant Go-Staff, Inc. alleging causes of action for (1) failure and refusal to pay agreed wages; (2) failure to pay minimum wage under California law; (3) failure to provide accurate itemized wage statements; (4) failure to pay wages upon termination; (5) unfair competition; and (6) failure to pay minimum wage under the Fair Labor Standards Act (“FLSA”). (Compl., ECF No. 1.) Plaintiff and the other class members were at one time employed by Defendant, and all claims arise from said employment. (Id. ¶ 12.)

         On November 10, 2016, Defendant filed the instant Motion to Compel Arbitration and Stay Court Action pursuant to a signed Arbitration Agreement (“the Agreement”) between Plaintiff and Defendant. (Mot. to Compel 1-2, ECF No. 4-1.) Defendant alleges the Agreement governs the present action. (Id. at 1.) Specifically, Defendant contends that on February 20, 2015, shortly after Plaintiff was hired, Plaintiff received and signed a number of new hire documents, including the Agreement and a “Memorandum Regarding the Arbitration Process and Agreement, ” which “explained the arbitration process and agreement.” (Id. at 2.) Defendant argues that the Agreement (1) requires Plaintiff to submit to binding arbitration “of any claims that result from or in any way relate to Plaintiff's employment relationship with Go-Staff, ” and (2) waives Plaintiff's right to bring a claim on a class or representative action basis. (Id. at 4.)

         The Agreement states that “[t]he purpose of this Agreement is to establish final and binding arbitration for all disputes arising out of Employee's relationship with Employer . . . .” (Decl. of Jeanmarie Gibson (“Gibson Decl.”) Ex. 1, ECF No. 4-3.) Section 1 of the Agreement explains which claims are covered by the Agreement, including: “claims for wages or other compensate due; claims for penalties or premiums; . . . claims for unfair business practices; . . . and claims for violation of any public policy, federal, state, or other governmental law, statute, regulation, or ordinance.” (Id. § 1.) Section 13 provides the waiver of representative/class action proceedings, which states that “EMPLOYEE AND EMPLOYER KNOWINGLY AND VOLUNTARILY AGREE TO BRING ANY CLAIMS GOVERNED BY THIS AGREEMENT IN HIS/HER/ITS INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF, CLASS MEMBER, OR REPRESENTATIVE IN ANY PURPORTED CLASS OR REPRESENTATIVE ACTION.” (Id. § 13.) Finally, Section 4.3 states that “[t]he arbitrator shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this Agreement, including, but not limited to, any claim that all or any part of this Agreement is void or voidable.” (Id. § 4.3.)

         Defendant further argues that the Court should stay the present action until the Supreme Court has resolved Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016) cert. granted, 85 U.S.L.W. 3341, 3344 (U.S. Jan. 13, 2017) (No. 16-300), a case that may impact the outcome of this case. (Reply 7, ECF No. 15.) Specifically, Defendant argues that a stay is warranted in this instance because (1) Go-Staff will suffer “substantial and irreparable harm” litigating this case due to the potential that the Supreme Court will reverse Morris and hold enforceable mandatory arbitration agreements with a class action waiver; (2) Plaintiff and the class would suffer “minimal (if any)” harm because the sole relief sought is monetary in nature; and (3) the stay would promote judicial economy and efficiency. (Id. at 7-9.)

         Plaintiff does not appear to dispute that she received and signed the Agreement. (See generally Opp'n, ECF No. 7.) Instead, Plaintiff argues that the Agreement is unenforceable under Morris because the Agreement contains a requirement that employees waive their right to bring a class action. (Id. at 1-2.) Plaintiff contends that Morris, which held that a mandatory arbitration agreement with a class action waiver violates the National Labor Relations Act (“NLRA”), is controlling and, therefore, the Agreement violates the NLRA. (Id.) Finally, Plaintiff argues that a stay is not warranted because (1) Plaintiff and the class could “suffer substantial damage if they are not allowed to pursue their interpretation of the Labor Code”; and (2) Defendant and other temporary staffing agencies “will continue their practices of refusing to compensate employees and more lawsuits regarding the same legal issues.” (Id. at 2.)

         LEGAL STANDARD

         The Federal Arbitration Act (FAA) governs the enforceability of arbitration agreements in contracts. See 9 U.S.C. § 1, et seq.; Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24-26 (1991). If a suit is proceeding in federal court, the party seeking arbitration may move the district court to compel the resisting party to submit to arbitration pursuant to their private agreement to arbitrate the dispute. 9 U.S.C. § 4. The FAA reflects both a “liberal federal policy favoring arbitration agreements” and the “fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (quotations and citations omitted); see also Kilgore v. Keybank, Nat'l Ass'n, 718 F.3d 1052, 1057 (9th Cir. 2013) (en banc) (“The FAA was intended to ‘overcome an anachronistic judicial hostility to agreements to arbitrate, which American courts had borrowed from English common law.'” (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625 n.14 (1985))); Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 892 (9th Cir. 2002) (“The [FAA] not only placed arbitration agreements on equal footing with other contracts, but established a federal policy in favor of arbitration, [citation], and a federal common law of arbitrability which preempts state law disfavoring arbitration.”).

         In determining whether to compel a party to arbitration, the Court may not review the merits of the dispute; rather, the Court's role under the FAA is limited to “determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008). If the Court finds that the answers to those questions are yes, the Court must compel arbitration. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). In determining the validity of an arbitration agreement, the Court applies state law contract principles. Adams, 279 F.3d at 892; see also 9 U.S.C. § 2. To be valid, an arbitration agreement must be in writing, but it need not be signed by the party to whom it applies as acceptance may be implied in fact. Pinnacle Museum Tower Ass'n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal.4th 233, 236 (2012). Further, “[a]n arbitration clause within a contract may be binding on a party even if the party never actually read the clause.” Id.

         ANALYSIS

         I. Whether the Agreement Is Enforceable

         Because Plaintiff does not dispute that (1) she accepted the terms of the Agreement and (2) that the Agreement covers this dispute, [1] (see Opp'n, ECF No. 7), the dispositive question for purposes of whether Plaintiff must ...


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