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Marron v. Healthsource Global Staffing, Inc.

United States District Court, N.D. California

September 13, 2019

DAVID H. MARRON, Plaintiff,



         On October 18, 2018, Plaintiff David H. Marron filed the instant putative class action against Defendant Healthsource Global Staffing, Inc., asserting violations of various credit reporting laws and California labor laws. (See Not. of Removal, Exh. A (“Compl.”), Dkt. No. 1.) On March 25, 2019, Defendant removed the case to federal court, asserting federal jurisdiction under the Class Action Fairness Act (“CAFA”). (Not. of Removal ¶ 18.)

         Pending before the Court are: (1) Plaintiff's motion to remand, and (2) Defendant's motion to compel arbitration. (Plf.'s Mot. to Remand, Dkt. No. 17; Def.'s Mot. to Compel, Dkt. No. 15.) Having considered the parties' filings, the relevant legal authorities, and the arguments made at the September 5, 2019 hearing, the Court DENIES Plaintiff's motion to remand and GRANTS Defendant's motion to compel arbitration.

         I. BACKGROUND

         Defendant “recruits and hires registered healthcare professionals from all over the United States to staff hospitals during labor disputes between [the] hospital and its employees' unions.” (Elbahou Decl. ¶ 3, Dkt. No. 1-5.)

         A. Employment Practices

         Plaintiff is a former employee of Defendant. (See First Amended Compl. (“FAC”) ¶ 170.)

         Plaintiff alleges that when he applied for employment with Defendant, he was required to fill out a disclosure and authorization form to perform a background investigation. (FAC ¶ 21.) The disclosures, however, “contained extraneous and superfluous language that does not consist solely of the disclosure as required by federal and state laws.” (FAC ¶ 22.)

         Plaintiff further alleges that he and the putative class performed off-the-clock work. (FAC ¶ 23.) Specifically, Plaintiff asserts that workers “were typically flown by plane to the city where they would be working and would stay at a hotel for the duration of their assignment.” (FAC ¶ 24.) On each day of their assignment, they would wait for a bus chartered by Defendants to take them to the job site. There, they would review their new hire paperwork, sign documents, and be given their department assignments. Workers, however, were only considered “on the clock” once they arrived at their department. Thus, Plaintiff alleges Defendants failed to pay workers “for extensive time spent traveling and under the direction and control of Defendants.” (FAC ¶ 25.)

         While working, Plaintiff alleges that workers were not provided with the necessary meal breaks or rest periods. (FAC ¶¶ 28, 31.) This was due to: “(1) Defendants' policy of not scheduling each meal period [and rest period] as part of each work shift; (2) chronically understaffing each work shift with not enough workers; (3) imposing so much work on each employee such that it made it unlikely that any employee would be able to take their breaks if they wanted to finish their work on time; and (4) no formal written meal and rest period policy that encouraged employees to take their meal and rest periods . . . .” (FAC ¶¶ 28, 31.) Plaintiff further alleges that workers “generally worked 12-hour shifts and were entitled to a minimum of three 10-minute rest periods, ” but that they “were typically only provided with one rest period.” (FAC ¶ 32.) Plaintiff also alleges that Defendants agreed to pay its workers a daily per diem for food, but that they “did not receive the agreed upon per diem from defendants.” (FAC ¶¶ 35-36.)

         Because of these practices, Plaintiff asserts that workers did not receive accurate wage statements, as their statements failed to accurately reflect all hours worked and premium wages for missed meal and/or rest periods. (FAC ¶¶ 38-41.) Additionally, Plaintiff alleges that Defendant failed to timely pay wages earned to employees who were terminated or resigned. (FAC ¶ 166.)

         B. Arbitration Agreement

         To be eligible for employment, an applicant creates an account through Defendant's website using a unique e-mail address and password. (Elbahou Decl. ISO Mot. to Compel, Dkt. No. 3.) Defendant updates its database so that applicant can view potential strike assignments. (Id. ¶ 6.) An interested applicant can “nominate” herself for consideration. Once a hospital receives a notice of a union's intent to strike, an applicant that has nominated herself for that strike will receive new action items, including completing the operative arbitration agreement and various human resources forms. (Id. ¶ 8.)

         Plaintiff created his account on June 18, 2012. (Elbahou Decl. ISO Mot. to Compel ¶ 12.) On December 1, 2017, Plaintiff nominated himself for consideration for an anticipated May 2018 strike.[1] (Id. ¶ 15.) On April 28, 2018, Plaintiff electronically signed the Arbitration Agreement. (Id. ¶ 15, Exh. C (“Arbitration Agreement”).) The Arbitration Agreement states:

The Parties mutually agree that any and all disputes arising out of, in connection with, or relating to your employment agreement with HealthSource, your employment with HealthSource, and any and all previous and future employment relationships with HealthSource, including with respect to the termination of such employment or other and any dispute as to the validity, interpretation, construction, application or enforcement of any provision of the operative employment agreement, shall be submitted to binding arbitration before a neutral arbitrator. Except as otherwise required under applicable law, (1) The Parties expressly intend and agree that class action and representative procedures shall not be asserted, nor will they apply, in any arbitration pursuant to your employment, your employment agreement, or this Agreement; (2) The Parties agree that each will not assert class action or representative action claims against the other in arbitration or otherwise; and (3) each of the Parties shall only submit their own, individual claims in arbitration and will not seek to represent the interests of any other person.

         (Arbitration Agreement ¶ 2.) Arbitration is conducted by the American Arbitration Association (“AAA”), and subject to the AAA's Employment Arbitration Rules. “Costs unique to the arbitration, such as the arbitrator's fee, will be paid by [Defendant].” (Id.)

         The Arbitration Agreement further states: “this Agreement shall not apply to any dispute if an agreement to arbitrate such dispute is prohibited by law.” (Arbitration Agreement ¶ 3.) Finally, the Arbitration Agreement permits a signee to opt-out; a signee “must (1) personally notify HealthSource in writing that you are revoking this agreement, and (2) e-mail the revocation notice to or mail it to HealthSource Global Staffing, Inc., 39270 Paseo Padre Parkway #138 Fremont, CA 94538, so that your revocation is received no later than thirty (30) days after I sign this agreement.” (Arbitration Agreement ¶ 7.) The e-mail for opting out is misspelled.

         C. Procedural History

         On October 18, 2018, Plaintiff filed the instant case in state court. On December 18, 2018, Plaintiff filed an amended complaint, adding a California's Private Attorneys General Act (“PAGA”) claim. (FAC ¶¶ 201-04.) On behalf of a FCRA Class, ICRAA Class, and CCRAA Class, Plaintiff alleged violations of the Fair Credit Reporting Act, the Investigative Consumer Reporting Agencies Act, and Consumer Credit Reporting Agencies Act, respectively. (FAC ¶ 13.)

         Plaintiff also sought to represent an Hourly Employees Class, made up of “[a]ll persons employed by Defendants and/or any staffing agencies and/or any other third parties in hourly or non-exempt positions in California . . . .” (FAC ¶ 13.) On behalf of the Hourly Employees Class, Plaintiff alleged violations for failure to pay hourly and overtime wages. (FAC ¶ 146.) The Hourly Employees Class includes four subclasses: (1) the meal period sub-class, made up of Hourly Employees Class members who worked in a shift in excess of five hours; (2) the rest period sub-class, made up of Hourly Employees Class members who worked a shift of at least 3.5 hours; (3) the wage statement penalties sub-class, made up of Hourly Employee Class members who were employed by Defendant during the period beginning one year before the filing of the action through the entry of final judgment; and (4) the waiting time penalties sub-class, made up of Hourly Employee Class members who separated from their employment during the period beginning three years before the filing of the action through entry of final judgment. (FAC ¶ 13.) Plaintiff also seeks to represent a UCL Class, made up of all Hourly Employee Class members, and an Expense Reimbursement Class, made up of all persons employed by Defendant who incurred business expenses. (FAC ¶ 13.)

         On March 25, 2019, Defendant removed the case from state court, asserting CAFA jurisdiction.[2] (Not. of Removal ¶ 18.) In support of removal, Defendant provided a declaration by its Vice President, Tabi Elbahou. Based on his review of the corporate records, Mr. Elbahou states that there were 10, 500 individuals in the FCRA Class, 7, 925 individuals in the ICRAA Class, and 9, 300 individuals in the CCRAA Class. (Elbahou Decl. ¶¶ 8-10.) Mr. Elbahou further states that there were approximately 4, 600 Hourly Employee Class members who worked at least one day in California in the four years prior to the filing of the complaint. (Elbahou Decl. ¶ 7.) The Hourly Employee Class members worked approximately 7, 250 assignments during those four years, 6, 900 assignments in the three years prior to the filing of the complaint, and 2, 400 assignments in the one year prior to the filing of the complaint. (Elbahou Decl. ¶¶ 12, 14, 15.) Mr. Elbahou further states that Hourly Class Members were placed in temporary positions at hospitals during organized labor stoppage, and the average labor stoppage lasted five days. (Elbahou Decl. ¶ 11.) Hourly Class Members earned an average of $55/hour, and typically worked shifts of at least eight hours per day. (Elbahou Decl. ¶ 13.)

         Based on these numbers, Defendant estimated that: (1) the FCRA claim was worth $105, 000; (2) the meal period claim was worth $797, 500; (3) the rest period claim was worth $1, 993, 750; (4) the hourly and overtime claim was worth $1, 143, 760; (5) the unreimbursed business expenses claim was worth $181, 250; (6) the wage statement penalties claim was worth 120, 000; (7) the waiting time penalties claim was worth $9, 108, 000; and (8) Plaintiff's attorney's fees claim was worth $3, 362, 315, or 25% of the estimated damages. (Not. of Removal ¶¶ 40, 43-50.)

         On June 27, 2019, Defendant filed a motion to compel arbitration. On July 11, 2019, Plaintiff filed his motion to remand, and his opposition to Defendant's motion to compel. (Plf.'s Opp'n, Dkt. No. 18.) On July 18, 2019, Defendant filed its reply. (Def.'s Reply, Dkt. No. 20.) On July 25, 2019, Defendant filed its opposition to Plaintiff's motion to remand. (Def.'s Opp'n, Dkt. No. 21.) On August 2, 2019, Plaintiff filed his reply. (Plaintiff's Reply, Dkt. No. 22-1.)


         A. Motion to Remand

         In general, “a defendant seeking to remove a case to a federal court must file in the federal form a notice of removal ‘containing a short and plain statement of the grounds for removal.'” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 553 (2014) (quoting 28 U.S.C. § 1446(a).) When a defendant removes a case, the “notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” Id. at 554. From there, “the defendant's amount-in-controversy allegation should be accepted when not contested by the plaintiff or questioned by the court.” Id. at 553. If, however, the plaintiff contests the amount in controversy, “both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied.” Id. at 554 (citing 28 U.S.C. § 1446(c)(2)(B)).

         The defendant who seeks removal has the burden to show by a preponderance of evidence that the amount in controversy is adequate. Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). To do so, “[t]he parties may submit evidence outside the complaint, including affidavits or declarations, or other summary-judgment-type evidence relevant to the amount in controversy at the time of removal.” Id. (internal quotation omitted). Under this standard, ...

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