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Garcia v. Central Coast Restaurants, Inc.

United States District Court, N.D. California

September 23, 2019



          Richard Seeborg United States District Judge


         Plaintiff Jennifer Garcia filed this putative class action alleging various wage and hour violations under California state law by defendants. Two years ago, Silvia Contreras and Martha Valencia Lazaro sued the same defendants, alleging the same wage and hour claims, but under the California Labor Code’s Private Attorneys General Act §§ 2698 et seq. (“PAGA”). Defendants recently settled with Contreras and Lazaro. Defendants now move for summary judgment, on the grounds that Garcia either must be compelled to arbitrate her claims or that Contreras and Lazaro’s settlement precludes the ongoing litigation of this case. For the reasons set forth below, the motion is denied.


         Garcia alleges systematic deprivation of minimum and overtime wages, inadequate rest and meal breaks, failure to indemnify employees, failure to provide accurate wage statements, failure to pay wages owed upon termination, and violations of California’s Unfair Competition Law during her tenure at a northern California “Jack in the Box” restaurant. She seeks back-pay and other damages for herself and all others similarly situated.[1] Defendants-both California corporations engaged in the operation of the restaurants in the chain at issue-are no strangers to allegations of this sort. They have recently reached a settlement with two other former employees, also represented by Garcia’s counsel, who filed a PAGA case alleging similar claims.

         When Garcia began working for defendants on approximately May 20, 2015, she was seventeen years old. On her first day of work, she signed an At-Will & Arbitration Employee Acknowledgement and Agreement (“the Agreement”), which required binding arbitration of “any claim, dispute, and/or controversy…arising from, related to, or having any relationship or connection whatsoever” to her employment with defendants. Exhibit 3, Plaintiff’s Opposition to Defendants’ Motion for Summary Judgment (“Plaintiff’s Response”). She alleges being rushed through signing the paperwork, tricked as to its contents, and taken advantage of because she was a minor. Plaintiff Jennifer Garcia’s Declaration in Support of Plaintiff’s Response (“Plaintiff’s Declaration”) at 2–3. Garcia stopped working for defendants in April 2016 and turned eighteen years old in May 2016.

         Meanwhile, in October 2015, two of defendants’ other employees sued defendants in Superior Court in the County of Monterey. See Contreras et al v. JIB Management, Inc. et al, No. 15-cv-000143 (Cal. Super. Ct. filed October 21, 2015). Contreras makes claims similar to those in the present case: failure to pay minimum and overtime wages, failure to provide rest and meal periods, failure to indemnify employees, failure to pay wages due at termination, and failure to provide wage statements. The plaintiffs in both cases are represented by the same counsel. While the present case is a putative class action, the Contreras plaintiffs made their claims on behalf of the State of California pursuant to PAGA. The Contreras plaintiffs have recently reached a $400, 000 settlement with defendants, which provides for payment to the California Labor and Workforce Development Agency (“CLWDA”), to the named plaintiffs, and to plaintiffs’ attorneys for fees and costs. The remainder is to be allocated to aggrieved employees “as penalties and to recover underpaid wages as penalties.” Order Granting Motion to Approve Penalties Sought as Part of a Settlement Pursuant to the Private Attorney Generals Act (“Settlement”), Contreras.

         Garcia filed the present case in December 2017, approximately eighteen months after the termination of her employment with defendants. Her complaint disavowed “[a]ny employment-related documents, including any arbitration agreement(s) entered into by Plaintiff and Defendants…during the time Plaintiff was a minor.” Class Action Complaint at 4, Garcia v. Central Coast Restaurants, Inc., No. RG-17886551 (filed Dec. 13, 2017). Garcia characterizes her disavowal as preemptive, however, and alleges she was unaware of having signed the Agreement until defendants filed their motion for summary judgment.


         A. Arbitration Standard

         When deciding a motion to compel arbitration, a standard similar to the summary judgment standard is applied. Concat LP v. Unilever, PLC, 350 F.Supp.2d 796, 804 (N.D. Cal. 2004). The question of whether parties agreed to arbitration is to be decided by a court, not an arbitrator, unless the parties clearly provide otherwise. AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649 (1986). Under the Federal Arbitration Act, 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 (2012). Federal policy encourages arbitration, prohibiting state courts from treating arbitration agreements differently than any other contractual agreement. AT&T Mobility v. Concepcion, 563 U.S. 333, 341 (2011). Doubts regarding the scope of arbitrable issues should thus be resolved in favor of arbitration. Rajagopalan v. NoteWorld, LLC, 718 F.3d 844, 846–47 (9th Cir. 2013).

         When the question is not whether a particular issue is arbitrable but whether a particular party is bound by an arbitration agreement, however, this liberal policy is irrelevant. Id. The court must apply principles of contract law to arbitration agreements the same way it would to any other contract. Concepcion, 563 U.S. at 343. Under California law, the essential elements for a contract are (1) “[p]arties capable of contracting;” (2) “[t]heir consent;” (3) “[a] lawful object;” and (4) “[s]ufficient cause or consideration.” Cal. Civ. Code § 1550 (West 1999). If a motion to compel arbitration is opposed on the ground that no agreement was made, the benefit of all reasonable doubts and inferences should be given to the opposing party. Concat LP, 350 F.Supp.2d at 804. The formation of an arbitration agreement can only be decided as a matter of law when there is no genuine issue of material fact. Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1141 (9th Cir.1991).

         B. Summary Judgment Standard

         Summary judgment is proper “if the pleadings and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). The purpose of summary judgment “is to isolate and dispose of factually unsupported claims or defenses.” Celotex v. Catrett, 477 U.S. 317, 323–24 (1986). The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Id. at 323 (citations and internal quotation marks omitted). If it meets this burden, the non-moving party then “must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e). Those facts must be material, i.e., “facts that might affect the outcome of the suit under the governing law….Factual disputes that are irrelevant or unnecessary will not be counted.” Anderson v. Liberty ...

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