United States District Court, N.D. California
ORDER GRANTING GENCO'S MOTION TO COMPEL; STAYING
ACTION PENDING ARBITRATION RE: DKT. NO. 31
Gonzalez Rogers United States District Court Judge
11, 2017, the Court granted defendant Volt's motion to
compel plaintiff into arbitration, but reserved on whether it
would also compel plaintiff's claims against defendant
Genco and whether it would stay the entire litigation pending
the arbitration proceedings. (Dkt. No. 35.) On May 19, 2017,
plaintiff filed a supplemental brief opposing defendant
Genco's joinder in the motion to compel and expressing
concerns that an order compelling his claims in this
litigation against Genco would impact his claims in a related
litigation, Ortiz v. Genco, Case No. 16-CV-4601
(N.D. Cal.). (Dkt. No. 36). On May 26, 2017, defendant Genco
responded and conceded that its joinder in Volt's motion
to compel applies only to plaintiff's claims in this
action. (See Dkt. No. 37 at 9 n.1.)
this context, and having carefully considered the pleadings
and the papers submitted, and for the reasons set forth more
fully below, the Court Orders as follows: The Court Compels
plaintiff's individual claims against Genco into
arbitration. The Court Stays the entire litigation pending
the completion of such arbitration.
Federal Arbitration Act (the “FAA”) requires a
district court to stay judicial proceedings and compel
arbitration of claims covered by a written and enforceable
arbitration agreement. 9 U.S.C. § 3. A party may bring a
motion in the district court to compel arbitration. 9 U.S.C.
§ 4. In ruling on the motion, the court's role is
typically limited to determining whether: (i) an agreement
exists between the parties to arbitrate; (ii) the claims at
issue fall within the scope of the agreement; and (iii) the
agreement is valid and enforceable. Lifescan, Inc. v.
Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th
the arbitrability of the merits of a dispute and the question
of who has the primary power to decide arbitrability depend
on the agreement of the parties.” Goldman, Sachs
& Co. v. Reno, 747 F.3d 733, 738 (9th Cir. 2014)
(citing First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938, 943 (1995); see also Oracle Am., Inc. v.
Myriad Grp. A.G., 724 F.3d 1069, 1072 (9th Cir. 2013).
However, these questions are decided by the arbitrator
instead of courts where “the parties clearly and
unmistakably” express that intention. See AT&T
Techs., Inc. v. Commc'ns Workers of Am., 475 U.S.
643, 649 (1986); see also Rent-A-Ctr., W., Inc. v.
Jackson, 561 U.S. 63, 68-69 (2010) (“[P]arties can
agree to arbitrate ‘gateway' questions of
‘arbitrability, ' such as whether the parties have
agreed to arbitrate or whether their agreement covers a
particular controversy.”). An arbitration clause
including an agreement to follow a particular set of
arbitration rules may constitute such an expression where
those rules provide for the arbitrator to decide questions of
arbitrability. See Poponin v. Virtual Pro, Inc., No.
06-CV-4019, 2006 WL 2691418, at *9 (N.D. Cal. Sept. 20, 2006)
(finding the ICC Rules of Arbitration clearly “provide
for the arbitrator to decide arbitrability”). In such
circumstances, the Court's inquiry is limited to
determining whether the assertion of arbitrability is
“wholly groundless.” See Qualcomm Inc. v.
Nokia Corp., 466 F.3d 1366, 1371 (Fed. Cir. 2006)
(applying Ninth Circuit law).
to an arbitration agreement may, at times, be able to compel
signatories into arbitration in situations where state
contract law would allow such litigant to do so. See
Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 631-32
(2009); see also Kramer v. Toyota Motor Corp., 705
F.3d 1122, 1130 n.5 (9th Cir. 2013) (explaining that
Andersen clarified that a “litigant who is not
party to an arbitration agreement may invoke arbitration if
the relevant state contract law allows the litigant to
enforce the agreement”) (citing Arthur
Andersen, 556 U.S. at 632).
California law, a nonsignatory defendant may compel
arbitration under a theory of equitable estoppel where claims
against the signatory are “based on the same facts and
are inherently inseparable.” Boucher v. Alliance
Title Co., Inc., 127 Cal.App.4th 262, 269 (2005)
(holding also that a nonsignatory may compel arbitration when
the “causes of action against the nonsignatory are
‘intimately founded in and intertwined' with the
underlying contract obligations”); see also Chico
v. Hilton Worldwide, Inc., No. 14-CV-5750-JFW, 2014 WL
5088240, at *13-14 (C.D. Cal. Oct. 7, 2014).
central argument in support of its motion to compel
plaintiff's claims into arbitration is based on
principles of equitable estoppel. Garcia v. Pexco,
LLC, -- Cal.Rptr.3d --, 2017 WL 2123937 (Apr. 24, 2017)
is instructive. There, plaintiff was employed by a staffing
company, and signed an employment agreement with the same
containing an arbitration provision. Id. at *1. The
staffing company then assigned plaintiff to work for Pexco
for a set amount of time. Id. Plaintiff sued the
staffing company and Pexco for violations of the Labor Code
and unfair business practices. Id. The trial court
compelled plaintiff's claims against the staffing company
and Pexco into arbitration, and the Court of Appeal affirmed
explaining that plaintiff's claims against Pexco were
“intimately founded in and intertwined with his
employment relationship with [the staffing agency], ”
despite plaintiff's arguments that his claims were based
on statutory, rather than contractual, violations.
Id. at *2-3.
opposition, plaintiff argues that Genco's liability is
not dependent upon a finding that the staffing company, Volt,
was liable. Plaintiff does not persuade with respect to his
own claim. Plaintiff cites only Benton v. Telecom Network
Specialists, Inc., 220 Cal.App.4th 701 (2013). However,
Benton does not address arbitration at all and
stands rather for the unobjectionable proposition that both
the staffing agency and company overseeing the work had
independent obligations to ensure compliance with California
wage and hour laws. Id. at 728.
Court finds the instant case most analogous to
Garcia. Like the plaintiff in Garcia,
plaintiff here signed an employment agreement containing a
broad arbitration provision with Volt. Volt then assigned
plaintiff to work for a certain period of time for Genco.
Similarly, plaintiff here brought claims pursuant to
California wage and hour laws rather than contractual claims
based on the employment agreement. Accordingly, as in
Garcia, it is appropriate to allow the nonsignatory
defendant to compel plaintiff into arbitration because his
claims were “intimately founded in and intertwined with
his employment relationship” with the signatory
staffing agency. See Garcia, 2017 WL 2123937, at *3.
As there, the plaintiff here referred “to both
employers collectively as ‘defendants' without any
the Court finds that principles of equitable estoppel apply
here and allow Genco to compel plaintiff into
arbitration. Accordingly, the Court Compels
plaintiff's claims against Genco in this litigation only