United States District Court, N.D. California
ORDER RE ARBITRATION RE: DKT. NO. 21
DONATO UNITED STATES DISTRICT JUDGE
Martinez, suing on behalf of himself and a putative class,
alleges that defendants Ross Stores, Inc. and DMSI Staffing,
LLC violated the Fair Credit Reporting Act, 15 U.S.C. §
1681 et seq. (“FCRA”), in conducting
background checks on prospective employees. The action was
originally filed in California Superior Court and removed on
federal question subject matter. Defendants seek to compel
arbitration of the claims on the basis of an arbitration
agreement in an employment application. The case is ordered
pertinent facts are straightforward. Martinez applied for a
job with Ross through a staffing company, DMSI, in December
2017. Dkt. No. 4, Ex. 1 ¶ 16. (“Complaint”).
After a background check, Martinez was advised that he would
not get a job. Id. Martinez alleges that Ross and
DMSI violated the FCRA and related California state law
provisions by failing to make adequate disclosures in
connection with the background checks and adverse actions on
Martinez applied for a job, he signed a “Dispute
Resolution Agreement.” Dkt. No. 22, Ex. B(1) (the
“DRA”). Among other provisions, the DRA states
that Martinez and DMSI “agree to resolve by arbitration
any and all disputes arising out of or relating to DMSI's
failure to hire you, regardless of whether that dispute is
between (1) just you and DMSI or you and any other associate,
employee, agent, or representative of DMSI, or (2) you and
any client of DMSI or any entity you claim is jointly
responsible with DMSI for any hiring decision or decision to
deny employment to you or to whom you would otherwise be
dispatched for work and/or any employee, agent, or
representative of such entity (all of whom are understood to
be third-party beneficiaries of this Agreement and are
entitled to enforce it), regardless of who initiates the
claim regarding such dispute.” Id. at p.1. The
DRA waives arbitration “on a class, collective,
representative, Private Attorney General Act
(“PAGA”) and/or group action basis.”
Id. ¶ 3.
defines the procedures for arbitration. The parties will
mutually select a single arbitrator, the hearing will be held
in the location where the individual last worked or applied
for work with DMSI, the arbitration fees will be paid by the
parties as apportioned by the arbitrator or paid entirely by
DMSI if state law so requires, and attorney's fees may be
awarded if authorized by state or federal law. Id.
does not name a specific arbitration entity such as AAA or
JAMS, and there is no delegation clause in the agreement. The
DRA is expressly governed by the Federal Arbitration Act, 9
U.S.C. § 1 et seq. (“FAA”).
Id. at p.1.
does not dispute that he signed and dated the DRA.
Id. at p.2.
governs the motion to compel arbitration. The FAA's
“overarching purpose . . . is to ensure the enforcement
of arbitration agreements according to their terms so as to
facilitate streamlined proceedings.” AT&T
Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011).
The Court's role under the FAA is limited to determining
(1) whether a valid and enforceable contract to arbitrate
exists, and if so, (2) whether the scope of the agreement
encompasses the claims in issue. Lifescan, Inc. v.
Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th
Cir. 2004). If the party seeking to compel arbitration
establishes both factors, the FAA requires the Court to
enforce the arbitration agreement in accordance with its
terms. Id. Any doubts about the scope of arbitrable
issues should be resolved in favor of arbitration. Three
Valleys Mun. Water Dist. v. E.F. Hutton & Co., Inc.,
925 F.2d 1136, 1139 (9th Cir. 1991). See generally
Jacobson v. Snap-on Tools Co., No.
15-CV-02141-JD, 2015 WL 8293164, at *2 (N.D. Cal. Dec. 9,
does not contain a choice of law provision, but Martinez
signed it in California in connection with an employment
opportunity there, and the parties do not disagree that
California law applies. See Dkt. No. 21 at 4-5; Dkt.
No. 23 at 5. Consequently, Martinez's challenges to the
validity and enforceability of the DRA are evaluated under
California contract law. Nguyen v. Barnes & Noble
Inc., 763 F.3d 1171, 1175 (9th Cir. 2014); Alonso v.
AuPairCare, Inc., No. 3:18-CV-00970-JD, 2018 WL 4027834,
at *2 (N.D. Cal. Aug. 23, 2018). An arbitration agreement can
be avoided on the same grounds available to avoid the
enforcement of any contract, so long as the defense does not
have a disproportionate effect on arbitration. Thompkins
v. 23andMe, Inc., 840 F.3d 1016, 1023 (9th Cir. 2016);
Alonso, 2018 WL 4027834, at *2.
and DMSI bear the burden of establishing the existence of a
valid arbitration agreement, and Martinez has the burden of
showing that it is unenforceable or otherwise subject to a
defense. Norcia v. Samsung Telecomm. Am., LLC, 845
F.3d 1279, 1283 (9th Cir. 2017); Snap-on Tools, 2015
WL 8293164, at *2.
DRA IS ...