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Armenta v. Staffworks, LLC

United States District Court, S.D. California

July 21, 2017

FLORA ARMENTA, individually and on behalf of others similarly situated, Plaintiff,


          Hoik Cvnthia Bash ant United States District Judge

         Presently before the Court is Defendant Staffworks, LLC's motion to compel Plaintiff Flora Armenta's individual claims to arbitration, strike her class claims, and stay the case pending the outcome of arbitration. (ECF No. 6.) Plaintiff opposes. (ECF No. 9.)

         The Court finds this motion suitable for determination on the papers submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For the following reasons, the Court DENIES Defendant's motion to compel arbitration, strike class claims, and stay litigation.

         I. BACKGROUND

         Plaintiff Flora Armenta sought job placement through Defendant Staffworks, LLC-a staffing agency that places applicants with various client companies. (Milana-Slater Decl. ¶¶ 3, 6, ECF No. 6-2.) Prior to being assigned to work for a client company, applicants visit Defendant's office to fill out initial paperwork and participate in a brief interview to determine the applicant's skillset and desired employment. (Id. ¶¶ 3-4.)

         When Plaintiff visited Defendant's office, she received and signed a one-page Mandatory Arbitration Agreement (“Agreement”). (Milana-Slater Decl. ¶ 7, Ex. A.) The Agreement states, in pertinent part:

In connection with my employment at StaffWorks, LLC (“STAFFWORKS”), . . . I agree that any dispute or controversy which would otherwise require or allow [or] resort to any court or other governmental dispute resolution forum, between myself and STAFFWORKS (or its owners, partners, directors, officers, employees and parties affiliated with its employee benefit and health plans) arising from, related to, or having relationship or connection whatsoever with my seeking employment with, employment by, or other association with STAFFWORKS, whether based on tort, contract, statutory, or equitable law, or otherwise, (including claims for discrimination under the Fair Employment Housing Act) shall be submitted to and determined by binding arbitration in conformity with the procedures of the California Arbitration Act . . . .


         Plaintiff later commenced this putative class and collective action against Defendant under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and California labor law. (Compl. ¶¶ 56-92, ECF No. 1.) At the heart of Plaintiff's claims is the allegation that Defendant failed to pay Plaintiff and those similarly situated, resulting in the underpayment of wages in violation of the FLSA and California labor law. (Id. ¶ 5.) Based on the Agreement, Defendant now moves to compel arbitration of Plaintiff's individual claims, strike her class claims, and stay this action pending the outcome of arbitration. (ECF No. 6.)


         The Federal Arbitration Act (“FAA”) applies to disputes involving contracts that touch upon interstate commerce or maritime law. 9 U.S.C. § 1; see also Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109, 119 (2001); Yahoo! Inc. v. Iversen, 836 F.Supp.2d 1007, 1009 (N.D. Cal. 2011). It reflects a “national policy favoring arbitration, ” Preston v. Ferrer, 552 U.S. 346, 349 (2008), and emphasizes that valid arbitration agreements must be “rigorously enforce[d]” according to their terms, Am. Exp. Co. v. Italian Colors Rest., 570 U.S. ---, 133 S.Ct. 2304, 2309 (2013).

         Thus, the FAA commands that written arbitration agreements “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. The second clause, known as the FAA's “savings clause, ” permits arbitration agreements to be invalidated by “generally applicable contract defenses, such as fraud, duress, or unconscionability.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (quoting Doctor's Assoc., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)); see also Mortensen v. Bresnan Commc'ns, LLC, 722 F.3d 1151, 1158 (9th Cir. 2013).

         The court's role under the FAA is limited to determining (1) whether a valid arbitration agreement exists and, if so, (2) whether the scope of the agreement encompasses the dispute at issue. See Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). “If a party seeking arbitration establishes these two factors, the court must compel arbitration.” Farrow v. Fujitsu Am., Inc., 37 F.Supp.3d 1115, 1119 (N.D. Cal. 2014) (citing Chiron Corp., 207 F.3d at 1130); see also 9 U.S.C. § 4 (“[U]pon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement”).

         III. ...

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