United States District Court, S.D. California
ORDER GRATING TO DEFENDANT'S MOTION TO COMPEL
ARBITRATION AND STAYING PLAINTIFF'S THE PAGA CLAIM
M. JAMES LORENZ UNITED STATES DISTRICT JUDGE.
action for wrongful termination, fraud and violation of
California wages and hour laws, Defendant Medidata Solutions,
Inc. filed a motion to compel arbitration. Plaintiff filed an
opposition, and Defendant replied. The Court decides the
matter on the papers submitted and without oral argument.
See Civ. L. R. 7.1(d.1). For the reasons stated
below, Defendant's motion is granted. Plaintiff's
causes of action numbered one through twelve are dismissed;
however, Plaintiff may reassert them in arbitration.
Plaintiff's thirteenth cause of action under the Private
Attorney General Act is stayed pending arbitration.
to the second amended complaint, Plaintiff was employed by
Defendant as a senior director of sales. Plaintiff's
compensation consisted of base salary plus commissions,
bonuses, benefits, and other compensation. Plaintiff claims
that he and others were not paid all commissions owed, and
that Defendant had a practice of terminating employees to
avoid paying large commissions. After complaining to
Defendant about its practices regarding payment of
commissions, Plaintiff was terminated. It is undisputed that
when he was hired, Plaintiff signed an agreement with an
filed an action in this Court. In his second amended
complaint, he alleges numerous California Labor Code
violations, wrongful termination, promissory estoppel, fraud,
unjust enrichment, violation of the California Unfair
Competition Law (Cal. Bus. & Prof. Code § 17200
et seq.), and receiving stolen property in violation
of California Penal Code § 496(a). Plaintiff also seeks
penalties on behalf of himself and other aggrieved employees
and on behalf of the California Labor Workforce Development
Agency ("LWDA") for the Labor Code violations,
including failure to timely pay all wages due, unlawful
deduction (undisclosed payment using a lower pay scale than
designated by statute or contract), violations relating to
commissions, unlawful retaliation, failure to pay all wages
due upon termination, and failure to provide accurate
itemized wage statements). The Court has diversity
jurisdiction under 28 U.S.C. § 1332.
filed the pending motion to compel arbitration of
Plaintiff's individual claims. Defendant concedes that
Plaintiff's PAGA claim is not subject to arbitration.
(Mot. at 1 n.1 (citing Sakkab v. Luxottica Retail N. Am.,
Inc., 803 F.3d 425, 440 (9th Cir. 2015).) See
Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th
348, 386-88 (2014) (no Federal Arbitration Act preemption
when an aggrieved employee brings a PAGA claim as an agent of
a state agency, "where any resulting judgment is binding
on the state and any monetary penalties largely go to state
coffers."). Defendant argues that Plaintiff's
remaining claims are covered by the arbitration clause
included in the Employee Confidentiality, Invention
Assignment and Non-Competition Agreement which Plaintiff
signed when he was hired. (Decl. of Jessica Micciche Ex. A
("Agreement").) Plaintiff opposes, arguing that the
arbitration clause is unenforceable.
clauses are governed by the Federal Arbitration Act, 9 U.S.C.
§1 et seq. ("FAA") and California
contract law. "The FAA mandates that district courts
shall direct the parties to proceed to arbitration
on issues as to which an arbitration agreement has been
signed." Kilgore v. KeyBank N.A., 718 F.3d
1052, 1058 (9th Cir. 2013) (emphasis in original) (quoting
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213,
218 (1985)). "As federal substantive law, the FAA
preempts contrary state law." Mortensen v.
Bresnan Comm'cns, LLC, 722 F.3d 1151, 1158
(9th Cir. 2013). However, the FAA does not require
enforcement of arbitration agreements that may be invalidated
on "such grounds as exist at law or in equity for the
revocation any contract." 9 U.S.C. § 2. "This
saving clause permits agreements to arbitrate 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) (internal quotation marks and citation omitted).
The burden of proving that the arbitration agreement cannot
be enforced is on the party resisting arbitration. Green
Tree Fin. Corp. - Ala. v. Randolph, 531 U.S. 79, 92
Plaintiff contends that the arbitration clause is
unenforceable for failure of consideration because Defendant
failed to pay him in full. This argument is undermined by the
Agreement itself, which expressly addresses the issue of
c. Consideration. I UNDERSTAND THAT EACH PARTY'S
PROMISE TO RESOLVE CLAIMS BY ARBITRATION IN ACCORDANCE WITH
THE PROVISIONS OF THIS AGREEMENT, RATHER THAN THROUGH THE
COURTS, IS CONSIDERATION FOR OTHER PARTY'S LIKE PROMISE.
I FURTHER UNDERSTAND THAT I AM OFFERED EMPLOYMENT IN
CONSIDERATION OF MY PROMISE TO ARBITRATE CLAIMS.
(Agreement § 11.c. (emphasis in original).) It is
undisputed that Plaintiff signed the Agreement and that he
was offered, and accepted, employment with Defendant.
Plaintiff's argument that the arbitration clause is
unenforceable for failure of consideration is therefore
Plaintiff argues that his claims do not fall within the scope
of the Agreement's forum selection clause. This argument
is inapposite. Defendant's motion is not seeking to
enforce the forum selection clause, but the arbitration
clause. In this regard, the arbitration clause provides:
a. Arbitration. . . . [¶] THIS ARBITRATION
CLAUSE . . .
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL
ASPECTS IF THE EMPLOYER/EMPLOYEE RELATIONSHIP . . .,
INCLUDING, BUT NOT ...