Harris v. Pacific Gas & Electric Company

Opinion

DEXTER HARRIS, Case No. 21-cv-04096-JCS Plaintiff, ORDER GRANTING IN PART: v. 1) ERA AND WORLEY’S MOTION PACIFIC GAS & ELECTRIC COMPANY, TO COMPEL ARBITRATION et al., AND DISMISS PLAINTIFF’S SECOND AMENDED Defendants. COMPLAINT PURSUANT TO FRCP 12(B)(1), 12(B)(3) AND 12(B)(6); AND 2) PG&E’S MOTION TO DISMISS COMPLAINT Re: Dkt. Nos. 46, 47

Plaintiff Dexter Harris brings employment discrimination claims under Title VII and California law against Worley Group Inc. (“Worley”), Energy Resourcing America, Inc. (“ERA”) and Pacific Gas & Electric (“PG&E”), as joint employers. All three defendants contend Harris’s claims are subject to binding arbitration pursuant to an arbitration provision in an independent contractor agreement (“IC Agreement”) between Harris’s company – Saint Jude Design Engineering Procurement and Construction Project Management LLC of Baker, Louisiana (“Saint Jude”) – and ERA. They also seek dismissal of Harris’s claims on the basis that they are insufficiently pled. Presently before the Court are the following motions: 1) Worley and ERA’s Motion to Compel Arbitration and Dismiss Plaintiff’s Second Amended Complaint Pursuant to FRCP 12(b)(1), 12(b)(3) and 12(b)(6) (“Worley/ERA Motion”); and 2) PG&E’S Motion to Dismiss Second Amended Complaint (“PG&E Motion”). A hearing on the Motions was held on hearing. The Court finds that no further hearing is necessary and therefore vacates the hearing set for December 2, 2022 pursuant to Civil Local Rule 7-1(b). The Case Management Conference set for the same date is also vacated. For the reasons stated below, the Court finds that all of Harris’s claims are subject to arbitration and therefore GRANTS the Worley/ERA Motion and the PG&E Motion on that issue; it does not reach the remaining challenges in Defendants’ motions.1 A. The Second Amended Complaint In the Second Amended Complaint (“SAC”), which is the operative complaint, Harris names three defendants: ERA and Worley, which are alleged to be foreign companies “doing business in California including in this District[;]” and PG&E, which is alleged to be “a California corporation with headquarters and facilities within this District.” SAC ¶¶ 14-16. Harris alleges that he is “a black male” and a “resident of the State of Louisiana.” Id. ¶ 13. He further alleges that he is “a former employee of Defendants.” Id. He makes the following general allegations in the introduction of his complaint: 1.This is an employment discrimination case, brought pursuant to the provisions of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§2000e, et seq., as amended (“Title VII”) and Fair Employment & Housing Act (“FEHA”), California Gov. Code § 12900, et seq.

2. Plaintiff is a black male. Plaintiff alleges that Defendants have discriminated and retaliated against him based on his race and have wrongfully terminated his employment.

3. Defendants hired Plaintiff to perform high voltage energy transmission inspections and other related work in California. 4. Plaintiff was the only black male in his group. 5. Defendant is a highly skilled professional in his area of expertise. He was one of the top inspectors while working for Defendants.

6. Defendants, however, consistently and systematically discriminated against Plaintiff based on his race. 7. Defendants purposely held up Plaintiff’s salary payments. 8. When Plaintiff complained, Defendants falsely accused Plaintiff of work performance-related failures and terminated his employment. The stated bases for Plaintiff’s termination were entirely fabricated. Id. ¶¶ 1-8. The SAC also contains a “Fact” section alleging specific facts. In that section, Harris alleges that “[o]n March 26, 2020, [ERA], a recruitment provider for [Worley], hired [him] as a Project Manager to perform high voltage energy transmission inspections and other related work for Worley and [PG&E] in California.” Id. ¶ 22. Harris “started work effective April 20, 2020.” Id. ¶23. According to Harris, this was not his “first experience doing projects for PG&E” and “[o]n prior assignments, Mr. Harris was frequently the subject of racial slurs by various PG&E contract employees.” Id. ¶ 24. He alleges that “[h]is experience was particularly bad while working for PG&E in 2019” and describes four specific incidents involving racial discrimination or harassment that occurred in 2019. Id. ¶¶ 25-28. Harris alleges that while working for PG&E, “co-workers, including PG&E agents and/or employees who, either officially and/or in effect, had supervisory and/or managerial authority over Mr. Harris, referred to him as ‘Johnny on the spot here smart nigga’” on a “daily” basis and that “Defendants’ supervisors and management personnel knew of this practice but did nothing to stop it.” Id. ¶ 30. He further alleges that “Defendants’ personnel, including Plaintiff’s supervisors/ managers, singled Plaintiff out for how he looked, dressed, conducted himself, and for the new truck that he drove” and “were, apparently, upset with the fact that a Black man amongst them was well-educated, well-dressed, carried himself with confidence, and drove a nice truck.” Id. According to Harris, “they called Plaintiff ‘an enigma’ to his face.” Id. Plaintiff describes in the SAC a series of incidents that led up to his termination, on August 26, 2020. Id. ¶¶ 32-55. Some of these related to Harris’s inspection of PG&E equipment and a “major issue” that “Jeff Edgerly” had with Harris’s insistence on “following the Institute of Electrical and Electronics Engineers (‘I.E.E.E.’) standards[,]” which “Mr. Harris insisted . . . required at least one grounding per structure and, depending on the size or load, possibly two grounding mechanisms.” Id. ¶ 33. According to Harris, Edgerly told him “in no uncertain terms, that PG&E was only concerned with having one grounding mechanism per every fourth or fifth considered a failure and his daily inspection total would be reset.” Id. ¶ 34. Harris alleges that Edgerly also commented that he was “too smart for his own good.” Id. Harris further alleges that “[o]n multiple occasions during the spring of 2020, Mr. Edgerly criticized [his] work, claiming he was not abiding by certain stipulations of the PG&E Transmission Line Inspection Aid handbook” even though that handbook “was not altered to include those stipulations until August 5, 2020.” Id. ¶ 35. Harris alleges that “[o]n July 1, 2020, [Subject Matter Expert (‘SME’)] Mike Padilla unlabeled a structure that Mr. Harris had previously, and correctly, identified as an A-tag – an emergency designation, requiring immediate response and repair of the structure.” Id. ¶ 36. Harris alleges that on July 7, 2022, “PG&E effectively silenced [him] for voicing his concerns by moving him to a different department where he would no longer be involved with inspections.” Id. ¶ 37. In particular, he was moved to the Centralized Inspection Review Team (“CIRT”), “which reviews priority tag designations, amongst other things.” Id. Harris alleges that “[o]n August 26, 2020, at 5:00 p.m., Mr. Harris, Mr. Issam El Ayadi,2 Mrs. Rosa Serrano, and Mr. Jamie Ortiz3 all attended a mandatory Microsoft Teams meeting” where “Mr. El Ayadi claimed” that during a May 11, 2020 inspection that Harris had conducted Harris had “failed to label the structure with an A-tag” and that “this was unacceptable.” Id. ¶¶ 39-40. According to Harris, “Mr. El Ayadi asked Mr. Ortiz to present a photo display of slides showing the structure and to point out the reasons why the A-tag label would be required” but “Mr. Harris believes the photos were doctored.” Id. ¶ 41. Also at the meeting, “Ms. Serrano claimed that Mr. Harris was ‘the AIR Team Plus/CIRT team member with the most mistakes upon

2 Although Ayadi’s affiliation is not stated in the SAC, in the DFEH charge attached to the SAC he is described as “of PG&E.” See dkt. no. 41 at ECF p. 41. Ayadi supplied a declaration in support of Defendants’ supplemental briefing in which he states that he has been employed by PG&E since January 2018 and that his current job title is Sr. Manager, Electric Transmission Asset Strategy. Ayadi Decl. (dkt. 67-2) ¶ 1. 3 Although Ortiz’s affiliation is not stated in the SAC, in the EEOC charge attached to the SAC he is described as “the transmission line inspection supervisor for P.G.& E.” See dkt. no. 41 at ECF p. 46. Ortiz supplied a declaration in support of Defendants’ supplemental briefing in which he states that he has been employed by PG&E since May of 2015 and that during the time period from late review’” but when “Mr. Harris inquired as to who performed the review and what errors were found [he] was given no information or answers.” Id. ¶ 46. Furthermore, Harris alleges, “Quinton Beams (Mr. Harris’ direct supervisor) had said earlier that day that Mr. Harris was months ahead of the norm” – a statement that “cannot be reconciled with [Ms. Serrano’s] contention that Mr. Harris’ work was error filled.” Id. At the meeting, Harris was instructed to “speak with Mansour Pourcyrous4 with regards to ‘the final outcome of these findings.’” Id. Harris alleges that “[t]he subject of termination was not discussed during the meeting.” Id. According to Harris, he left two voicemail messages for Pourcyrous, who called Harris back and told him that he “had no idea what was going on, that he would have to call PG&E, and that he would call back to explain everything later – despite the fact that Mr. Pourcyrous was involved himself in organizing the meeting.” Id. ¶ 49. Later the same day, Mr. Pourcyrous called Harris and told him that “his services were no longer needed.” Id. ¶ 50. Harris alleges that “[n]o reasons were provided for the termination.” Id. Harris alleges that “[i]n a September 1, 2020, email to Mr. Pourcyrous, Mr. Ortiz claim[ed] he had multiple performance meetings with Mr. Harris ‘to try and improve his inspections quality’” but that these were actually “meetings that Mr. Harris initiated to discuss software issues that interfered with his inspection duties and erroneous quota numbers that showed he had been averaging 7 structure inspections a day when he had been completing an average of 14 a day – well above his quota of 10.” Id. ¶ 51. Harris further alleges that “[o]n multiple occasions prior to the August 26 meeting, Mr. Edgerly obstructed and penalized Mr. Harris’ work, despite Mr. Harris’ strict adherence to protocols[,]” which Harris believes was “motivated by Mr. Edgerly’s desire to have him fired for discriminatory and retaliatory reasons.” Id. ¶ 52. Harris alleges that he “perceived that the August 26 meeting held to question his work after so much time had passed, and Mr. El Ayadi’s statements during the meeting, were for the purpose of building a pretextual case against him to justify his termination.” Id. ¶ 53. He further alleges that when he “complained of the above-described situation to management, Defendants retaliated falsely accusing Plaintiff of work-related mistakes, and terminated his employment on August 26, 2020.” Id. ¶ 55. Based on these alleged facts, Harris asserts six claims, all of which he asserts against all three defendants: 1) race discrimination and retaliation under Title VII, 42 U.S.C. § 2000e (“Claim One”); 2) race discrimination under California’s Fair Employment and Housing Act (“FEHA”), Cal. Gov’t. Code section 12940 (“Claim Two”); 3) harassment and failure to take reasonable steps to prevent harassment under FEHA, Cal. Gov’t. Code section 12940 (“Claim Three”);5 4) retaliation under FEHA (“Claim Four”); 5) retaliation under the Federal False Claims Act, 31 U.S.C. §§ 3729 et seq. (“Claim Five”); 6) retaliation under the California False Claims Act, Cal. Gov’t. Code sections 12650 et seq. (“Claim Six”). Harris also alleges that he exhausted his administrative remedies as to his Title VII and FEHA claims, SAC ¶¶ 19-21, and attaches his EEOC and DFEH charges to the SAC. B. The IC Agreement The IC Agreement is attached as Exhibit A to the Declaration of Julie Booth in support of the ERA/Worley Motion.6 Under the IC Agreement, ERA agreed to “contract to the CONTRACTOR certain technical services contracts” and the “Contractor” agreed to “perform the services in accordance with the terms of [the] Agreement.” IC Agreement ¶¶ 1 & 2. The IC Agreement provides that ERA will provide workers’ compensation insurance coverage for the period when the Contractor is performing services for the “Client” but specifies that the “Contractor” is not an ERA employee. Id. ¶¶ 2, 3 & 6. It further provides that the “Contractor” “shall function within the Client’s organization per the established administrative procedures of the Client’s organization” and that “[a]ll matters concerning the technical aspects of the work will 5 Claims Two and Three both refer to harassment and failure to prevent harassment; the Court has attempted to distinguish between the claims based on the names given to the claims in the SAC but is forced to guess which theories are being asserted in these claims. 6 Another version of the IC Agreement is attached to Harris’s DFEH charge, which Harris supplied as an exhibit to his complaint. That version is dated March 26, 2020 and is unsigned. The arbitration provision is the same in both versions. At the August 26, 2022 motion hearing, Harris’s counsel stipulated that the version attached to the Booth Declaration is the one Harris actually signed and that the one attached to the DFEH charge was an earlier draft of the agreement. be addressed through and under the direction and control of the Client’s designated Project Representative.” Id. ¶ 4. The IC Agreement further provides that ERA “shall exercise no direction or control, nor shall it have the right to exercise any direction or control over the details, means or methods by which CONTRACTOR performs any services for Client . . . and CONTRACTOR shall look solely to Client for all matters pertaining thereto.” Id. ¶ 7. It specifies that “[n]othing herein requires the CONTRACTOR to report anything other than invoicing information directly to [ERA] . . . .” Id. The IC Agreement provides that the Contractor would submit “client approved timesheets” to ERA, which would pay the Contractor according to a fee schedule attached to the IC Agreement. Id. ¶ 8. The IC Agreement provides that “[i]n no event shall [ERA], Client or their affiliates be liable for any special, punitive or consequential damages” and that the Contractor’s “remedies are limited as expressly set forth herein.” Id. ¶ 14. The paragraph that follows addresses choice of law and arbitration, stating as follows: 15. This Agreement shall be construed and interpreted in accordance with the laws of the state of Texas except for its conflict of law’s provisions. In the event of any dispute related to or arising from this Agreement, its performance, the Parties shall attempt in good faith to resolve disputes arising from or related to the performance, procedures, or management of this Agreement by referring the dispute to a senior management representative from each party to meet at a mutually agreeable time and place to attempt in good faith to arrive at a resolution. In the event such representatives are unable to resolve the matter with 14 days of first meeting, then either party upon written notice may refer the dispute, controversy or claim arising out of or relating to this Agreement, including any question regarding its existence, validity or termination to arbitration under the American Arbitration Rules and the situs shall be Houston, Texas. The decision of the arbitrator shall be final and binding on the parties, and the judgment upon the award rendered by the arbitrator shall be enforceable in any court of competent jurisdiction. Each party shall bear its own legal fees, costs, and expenses incurred in such arbitration. Id. ¶ 15. C. The Motions 1. The Worley/ERA Motion ERA and Worley challenge Harris’s complaint on three grounds. First, they contend the subject matter jurisdiction as to Harris’s claims against ERA and Worley. For this reason, they contend Harris’s claims against them should be dismissed under Rules 12(b)(1) and 12(b)(3) of the Federal Rules of Civil Procedure. Worley/ERA Motion at 1-2, 5-8. Second, they argue that Harris has failed to plead sufficient facts to state any claim against Defendants upon which relief can be granted and therefore, that his claims must be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Id. at 2, 8-19. Finally, they contend Claim One should be dismissed because it improperly combines Harris’s race discrimination and retaliation claims into one count, in violation of Rule 10(b) of the Federal Rules of Civil Procedure. Id. at 19-20. 2. The PG&E Motion Like ERA and Worley, PG&E argues in its motion that all of Harris’s claims should be dismissed under Rules 12(b)(1) and 12(b)(3) because they are subject to arbitration. PG&E further asserts that Harris’s claims should be dismissed under Rule 12(b)(6) because they are insufficiently pled. 3. Harris’s Opposition Harris opposes both motions, arguing that the arbitration provision in the IC Agreement is unenforceable and unconscionable. He also argues that he adequately pled all of his claims based on his status as a joint employee of the three defendants, and that he did not violate Rule 10(b) because combining his retaliation and discrimination claims into a single claim does not create confusion.

III. WHETHER PLAINTIFF’S CLAIMS ARE SUBJECT TO ARBITRATION A. Legal Standards 1. Rule 12(b)(1)7 Although section 4 of the Federal Arbitration Act provides for the filing of a motion to compel arbitration, courts have held that a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction “is a procedurally sufficient mechanism to enforce [an] [a]rbitration [p]rovision.” Filimex, L.L.C. v. Novoa Investments, L.L.C., No. CV 05–3792–PHX–SMM, 2006 WL 2091661, at *2 (D.Ariz. July 17, 2006) (citing Choice Hotels Int’l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709–10 (4th Cir. 2001) (holding that as long as the party made clear that it was seeking enforcement of the arbitration clause in its motion to dismiss, it had sufficiently “invoke[d] the full spectrum of remedies under the FAA”)). Rule 12(b)(1) is appropriate for dismissing claims subject to arbitration because it “is a flexible rule” that often serves as a vehicle for raising residual defenses and the Federal Arbitration Act requires only that a party “petition” the court for an order directing arbitration to proceed. Id. A party challenging the court’s subject matter jurisdiction under Rule 12(b)(1) may bring a facial challenge or a factual challenge. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). In evaluating a facial challenge to subject matter jurisdiction, the court accepts the factual allegations in the complaint as true. See Miranda v. Reno, 238 F.3d 1156, 1157 n.1 (9th Cir. 2001). “When a defendant factually challenges the plaintiff’s assertion of jurisdiction, a court does not presume the truthfulness of the plaintiff's allegations and may consider evidence extrinsic to the complaint.” Wolff v. Tomahawk Mfg., No. 3:21-CV-880-SI, 2022 WL 377926, at *1 (D. Or. Feb. 8, 2022)

7 Defendants ERA and Worley suggest that Rule 12(b)(3) of the Federal Rules of Civil Procedure, permitting dismissal based on improper venue, may apply to their motion to the extent they seek to enforce an arbitration provision, though they do not cite to any specific authority. See ERA/Worley Motion at 6. The Supreme Court has held that “Rule 12(b)(3) allow dismissal only when venue is ‘wrong’ or ‘improper[,]’” which “depends exclusively on whether the court in which the case was brought satisfies the requirements of federal venue laws[.]” Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49, 55 (2013). The existence of a binding arbitration agreement does not establish improper venue under Rule 12(b)(3) and therefore, that rule does not apply here. See Milliner v. Bock Evans Fin. Couns., Ltd., 114 F. Supp. 3d 871, 876 (citations omitted). Once the moving party has made a factual challenge by offering affidavits or other evidence to dispute the allegations in the complaint, the party opposing the motion must “present affidavits or any other evidence necessary to satisfy its burden of establishing that the court, in fact, possesses subject matter jurisdiction.” McCarthy v. Brennan, No. 15-CV-03308- JSC, 2017 WL 386346, at *5 (N.D. Cal. Jan. 27, 2017) (quoting St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989)). 2. The Federal Arbitration Act Under the Federal Arbitration Act (“FAA”), a “written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . 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. Because arbitration is a matter of contract, the question of arbitrability, that is, “whether the parties have submitted a particular dispute to arbitration[,]” is, “‘an issue for judicial determination [u]nless the parties clearly and unmistakably provide otherwise.’” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002) (quoting AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649 (1986)). The court’s role in addressing a question of arbitrability is “limited to determining (1) whether a valid agreement to arbitrate exists, and if it does, (2) whether the agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys. Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The FAA “was created to counter prevalent judicial refusal to enforce arbitration agreements . . . and has been interpreted to embody ‘a liberal federal policy favoring arbitration.’” Mortenson v. Bresnan Commc’ns, LLC, 722 F.3d 1151, 1157 (9th Cir. 2013) (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), and citing AT&T Mobility LLC v. Concepcion, 563 U.S. at 339). Thus, the Supreme Court has held that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone, 460 U.S. at 24–25. disputes—but only those disputes—that the parties have agreed to submit to arbitration.” Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 299 (2010) (internal quotation marks omitted). Consequently, courts may apply the “presumption favoring arbitration . . . only where it reflects, and derives its legitimacy from, a judicial conclusion that arbitration of a particular dispute is what the parties intended because their express agreement to arbitrate was validly formed and . . . is legally enforceable and best construed to encompass the dispute.” Id. at 303. Although the Federal Arbitration Act governs the enforcement of an arbitration clause, “[w]hen deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary state-law principles that govern the formation of contracts.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). However, the Court has “added an important qualification, applicable when courts decide whether a party has agreed that arbitrators should decide arbitrability: Courts should not assume that the parties agreed to arbitrate arbitrability unless there is “clear[ ] and unmistakabl[e]” evidence that they did so.” Id. (citing AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649 (1986) (“Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.”)). B. Whether Harris’s Claims Against ERA are Subject to Arbitration Harris does not dispute that he entered into the IC Agreement with ERA but argues that the Court should not compel arbitration of his claims against ERA for two main reasons. First, he argues that the arbitration provision is procedurally and substantively unconscionable under California law, and thus unenforceable. Second, he argues that the IC Agreement did not delegate this question to the arbitrator because the purported delegation clause is both unclear and itself unconscionable. Because the Court will reach the first argument only if it determines that there is no enforceable delegation clause, the Court begins by examining the enforceability of the delegation clause. a. Whether Delegation Provision is Enforceable As discussed above, delegation of the issue of arbitrability to the arbitrator must be clear 649. “Even if a delegation of arbitrability is clear and unmistakable it may be found unenforceable if the delegation itself is unconscionable.” Saravia v. Dynamex, Inc., 310 F.R.D. 412, 419 (N.D. Cal. 2015) (citing Rent–A–Center, West, Inc. v. Jackson, 561 U.S. 63, 71–74 (2010)). i. Is it “Clear and Unmistakable”? The delegation clause in the IC Agreement’s arbitration clause is found in the following sentence, in Paragraph 15: In the event such representatives are unable to resolve the matter with[in] 14 days of first meeting, then either party upon written notice may refer the dispute, controversy or claim arising out of or relating to this Agreement, including any question regarding its existence, validity or termination to arbitration under the American Arbitration Rules and the situs shall be Houston, Texas. IC Agreement ¶ 15 (emphasis added). Harris contends this language is “vague and amorphous,” and argues that this “grammatically troubled phrase, packed into a sentence about demanding arbitration” does not clearly and unmistakably delegate issues of arbitrability to the arbitrator because “[i]t refers to disputes about the ‘existence, validity or termination’ of ‘this Agreement’— i.e., the IC Agreement—being referred to arbitration [and] says nothing about arbitrability.” Opposition at 2, 10. While the Court agrees that the sentence would have benefited from a comma after the word “termination,” it does not find the delegation of arbitrability to be unclear simply because the word “arbitrability” is not used. Moreover, the sentence clearly states that disputes related to the validity of the IC Agreement are subject to arbitration and the arbitration provision itself is part of the IC Agreement. Therefore, the Court finds that the delegation to the arbitrator of the gateway questions under the FAA is clear and unmistakable under this provision. This conclusion finds further support in the fact that the arbitration provision in this case incorporates the rules of the American Arbitration Association (“AAA”). The Ninth Circuit has observed that “[v]irtually every circuit to have considered the issue has determined that incorporation of the American Arbitration Association's (AAA) arbitration rules constitutes clear and unmistakable evidence that the parties agreed to arbitrate arbitrability.” Oracle Am., Inc. v. arbitration agreement is between sophisticated parties to commercial contracts, those parties shall be expected to understand that incorporation of the UNCITRAL8 rules delegates questions of arbitrability to the arbitrator.” Id. at 1075. Further, the Ninth Circuit made clear in Brennan v. Opus Bank, that this rule does not “require that the contracting parties be sophisticated or that the contract be ‘commercial’ before a court may conclude that incorporation of the AAA rules constitutes ‘clear and unmistakable’ evidence of the parties’ intent.” 796 F.3d 1125, 1130 (9th Cir. 2015). The Court finds that here, the incorporation of the AAA language, in combination with clear delegation language in the arbitration provision itself, establishes that the “clear and unmistakable” requirement is met regardless of Harris’s sophistication and even though his agreement with ERA was not “commercial.” ii. Is it Unconscionable? “[U]nder the FAA, where an agreement to arbitrate includes a delegation clause, if a party challenges specifically the enforceability of the delegation clause, the district court must consider the challenge, but if a party challenges the enforceability of the arbitration agreement as a whole, the challenge is for the arbitrator.” Saperstein v. Thomas P. Gohagan & Co., 476 F. Supp. 3d 965, 975 (N.D. Cal. 2020) (citing Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 66 (2010)). Here, Harris brings a specific challenge to the delegation provision in the IC Agreement’s arbitration provision, arguing that it is unconscionable under California law. To the extent he relies on California law to show the delegation provision is unconscionable, however, he must establish that California law applies to that question despite the choice of law provision in the IC Agreement specifying that the agreement “shall be construed and interpreted in accordance with the laws of the state of Texas except for its conflict of law’s provisions.” IC Agreement ¶ 15; Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 91 (2000) (“The party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.”). Having considered the supplemental briefing and evidence submitted by the parties on the choice of law question, the

8 The Ninth Circuit explained in Oracle that “[t]he AAA rules contain a jurisdictional provision Court concludes Harris has not met that burden. Legal Standards Where, as here, the arbitration provision also includes a choice of law provision, a district court applies the choice of law rules of the state where the court sits to determine if that provision should be enforced. See Saravia v. Dynamex, Inc., 310 F.R.D. at 418. “Under California law, a contractual choice-of-law provision should be enforced if: (i) the chosen state’s law has a ‘substantial relationship’ to the parties or the transaction, (ii) the forum state has no ‘fundamental policy’ that is inconsistent with the chosen state’s law, and (iii) even if such a fundamental conflict exists, the provision should nevertheless be enforced unless the forum state has a ‘materially greater interest’ in the resolution of the matters at issue.” Id. at 419 (quoting In re Vortex Fishing Sys., Inc., 277 F.3d 1057, 1069 (9th Cir. 2002); see also Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459 (1992) (setting forth test under California law for enforcing contractual choice of law provision). The Nedlloyd analysis adopts “the principles set forth in Restatement section 187, which reflects a strong policy favoring enforcement of” “arm’s-length contractual choice-of-law provisions.” 3 Cal. 4th at 464-465. Section 187 provides, in relevant part, as follows: (1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue. (2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties. Restatement (Second) of Conflict of Laws § 187 (1971). Section 188, in turn, provides, in relevant part: (2) In the absence of an effective choice of law by the parties (see § 187), the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:

(a) the place of contracting,

(b) the place of negotiation of the contract,

(c) the place of performance,

(d) the location of the subject matter of the contract, and

(e) the domicil, residence, nationality, place of incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue. Restatement (Second) of Conflict of Laws § 188(2) (1971). The California Supreme Court has explained that “Courts and legal writers usually distinguish ‘domicile’ and ‘residence,’ so that ‘domicile’ is the one location with which for legal purposes a person is considered to have the most settled and permanent connection, the place where he intends to remain and to which, whenever he is absent, he has the intention of returning, but which the law may also assign to him constructively; whereas ‘residence’ connotes any factual place of abode of some permanency, more than a mere temporary sojourn.” Smith v. Smith, 45 Cal. 2d 235, 239 (1955). “‘Domicile’ normally is the more comprehensive term, in that it includes both the act of residence and an Intention to remain; a person may have only one domicile at a given time, but he may have more than one physical residence separate from his domicile, and at the same time.” Id. Whether Texas Has a Substantial Relationship to the Parties or Transaction ERA contends it has its principal place of business in Texas and therefore, that Texas has a “substantial relationship” to the parties under Nedlloyd. Dkt. 68 (Worley/ERA Supp. Brief) at 5. The Court agrees. Under California law, a state has a substantial relationship with a company that “has its principal place of business, corporate headquarters, and operating center” in that state, 1425, 1446 (2012). Defendants have offered the declaration of ERA Regional Director Julie Booth stating that ERA is “based out of Texas.” Booth Decl. ¶ 7. Harris has not offered any evidence to the contrary and does not dispute in his supplemental opposition brief that Texas has a substantial relationship with the parties. Therefore, the Court finds that the “substantial relationship” requirement for enforcing the choice of law provision is met. Whether Application of Texas Law Would Contravene a Fundamental Policy of California in which California has a Materially Greater Interest Than Texas As discussed above, under Section 187 of the Restatement (Second) of Conflict of Laws, a choice of law provision will not be enforced where application of the law of the chosen state “would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue.” Harris contends application of the Texas choice of law clause in the arbitration provision of the IC Agreement contravenes fundamental public policies of California in several ways. First, he argues that “California public policy holds that the imposition of substantial forum fees is grounds for invalidating an arbitration agreement[ ]” whereas Texas law “does not recognize such an imposition as unconscionable.” Dkt. 69 (Harris Supp. Opp.) at 7-8 (quoting Saravia v. Dynamex, Inc., 310 F.R.D. 412, 419 (N.D. Cal. 2015) (citing Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83, 110 (2000)). Second, Harris asserts, California’s fundamental policy is at stake because “California law does not permit enforcement of arbitration agreements even after multiple defects have been severed because such an agreement ‘indicate[s] a systematic effort to impose arbitration . . . as an inferior forum that works to the employer’s advantage[ ]’” whereas Texas would “enforce such a provision as long as ‘the parties would have entered into the agreement absent the unenforceable provisions.’” Id. (quoting Saravia, 310 F.R.D., at 319 (quoting D.R. Horton–Texas, Ltd. v. Drogseth, 2013 WL 3377121, at *4 (Tex.App., July 3, 2013)). Finally, Harris suggests that to the extent the arbitration provision requires the parties to bear their own attorneys’ fees, California’s fundamental policy of protecting its workers from plaintiff -- is implicated. Id. at 12-13. Assuming that Harris has identified fundamental policies of California that are implicated by application of Texas law to the determination of whether the delegation clause is enforceable (a question the Court does not decide), the Court concludes that the Texas choice of law provision is nonetheless enforceable because under the specific facts of this case, Harris has not demonstrated that California has a greater interest in the application of its law than Texas has. To determine whether California has a materially greater interest than Texas, the court considers the factors set forth in Section 188 of the Restatement (Second) Conflict of Laws, namely, “(a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicil[e], residence, nationality, place of incorporation and place of business of the parties.” Oestreicher v. Alienware Corp., 502 F. Supp. 2d 1061, 1068 (N.D. Cal. 2007), aff’d, 322 F. App’x 489 (9th Cir. 2009) (quoting Application Group, Inc. v. Hunter Group, Inc., 61 Cal.App.4th 881, 903 (1998)). This inquiry involves a fact-intensive analysis. Textron Inc. v. Travelers Cas. & Sur. Co., 45 Cal. App. 5th 733, 739 (2020), review denied (July 8, 2020). The easiest factor to evaluate is the location of the subject matter of the contract, as it is undisputed that ERA hired Harris to perform inspections of PG&E equipment located in California. As to the other factors, however, there are gaps and inconsistencies in the evidence that makes these factors somewhat more difficult to evaluate. As discussed below, the Court’s findings as to these factors suggest that California has only a modest interest in the application of its law to the delegation clause of the Arbitration Provision. Although Harris has repeatedly alleged in this case (and in the administrative proceedings) that he is a resident of Louisiana,9 Harris now says that he has lived “continuously in California since 2019” and that he decided to stay in California permanently in December 2019, when “Worley extended an offer to [him].” Harris Decl. ¶ 3. He has offered evidence that he paid 9 See Complaint ¶ 6 (“[Plaintiff] is a resident of the State of Louisiana.”); First Amended Complaint ¶ 13 (same); SAC ¶ 13 (same); SAC, Ex. 4 at ECF p. 31 (DFEH complaint filed monthly rent for part of a house in Danville, California for the period September 2019 through December 2021, where he received some Amazon deliveries, and a copy of a text to his landlord in December 2019 letting her know that he wanted to extend the rental through 2020. Id. ¶ 3 & Exs. 3-5. Harris also states in his declaration that he currently lives at an address in Hayward, California, and that he has “no other domicile other than” his house there. Id. ¶ 9. According to Harris, since 2019, he has “been paying California income tax, and CA disability employee tax.” Id. ¶3. To support this representation, he offers a pay statement from his current employer dated October 7, 2022, showing that he is now paying California taxes. Id. Exs. 2, 3. Harris has not, however, provided California tax returns for 2020 or copies of his pay statements for the period he worked for Worley and PG&E showing that he paid California taxes on his earnings from that work. Nor has he provided any evidence that he registered his vehicle in California or obtained a California driver’s license. These omissions cast serious doubt on his assertions that he not only resided in California in 2020 but also was domiciled here. See Harris Supp. Opp. at 9. Harris’s communications with Defendants and statements in his DFEH complaint also conflict with that assertion. For example, Harris’s DFEH Charge, filed February 9, 2021, lists his address as 6325 Bentley Drive, Baker, La. 70714. SAC, Ex. 4 at ECF p. 41. Even more troubling, though, is the following passage in the fact section of the charge: Due to what I deemed an unusual long delay in receiving the start date I contacted Mr. Issam Al-Ayadi of P.G.& E. giving notice of my being in California as of 3/12/20 and the signing of a work contract as of 3/26/20 with their business partner Worley and my mounting financing hardship due to delay in starting work, hotel, daily needs, travel expense. He responded that I should go home to Louisiana, to which I replied that I had driven to California and the state of California had in place a state wide travel ban with fines up to 1000 dollars and [penalties] up to 6 months in jail for violations. Id. This passage strongly suggests that even though Harris may have paid rent for a room in California starting in December 2019, he did not reside in California during most (or all) the period he was negotiating the IC Agreement, that is, between December 2019, when he says Worley offered the position to him, and March 26, 2020, when he alleges he was hired by Worley. residence and domicile. This conclusion is further supported by his complaint in the DFEH charge that he should have been paid a per diem for his work for PG&E because he was an “out- of-state” employee.” Id. This evidence seriously undermines his attempt to establish California domicile based on his professed intent to stay dating back to December 2019. The evidence concerning the place where Harris performed the work for Worley and PG&E also contradicts Harris’s prior allegations. In the SAC (and all prior versions of the Complaint), Harris alleged that he was hired “to perform high voltage energy transmission inspections and other related work for Worley and . . . [PG&E] in California.” SAC ¶ 22 (emphasis added); see also First Amended Complaint ¶ 21; Complaint ¶ 13. To the extent there was any room for doubt, counsel insisted at the August 26, 2022 motion hearing that Harris’s only remote work involved Teams meetings with PG&E employees and that the actual inspections of PG&E equipment were not performed remotely. Transcript of August 26, 2022 hearing at 16-17 (“[T]he work itself, and my understanding and the way it is alleged in the complaint, was that [it was] on location in California and he had to live here, hence the per diem payments.”) The evidence that the parties have now presented, however, indicates that the parties understood that the work Harris would perform for PG&E would be “100% remote for the entire project from our homes.” Wilson Decl., Ex. A (April 15, 2020 email from Harris asking that contract be updated to reflect this understanding). Further, the uncontroverted evidence is that other than coming to pick up his work-issued computer, Harris in fact worked entirely remotely, as did all of the other PG&E inspectors during this time period, and was never instructed to come to California. Harris Decl. ¶¶ 14-15; Ayadi Decl. ¶¶ 3-4; Ortiz Decl. ¶¶ 3-4. Further, Harris’s supervisors at PG&E stated in their declarations that did not know where Harris was when he performed his work for PG&E and had no reason to know or care. Ayadi Decl. ¶ 4; Ortiz Decl. ¶ 4. Based on the evidence discussed above, the Court concludes that the IC Agreement was negotiated mostly in Texas (where Defendants are based) and Louisiana even though Harris may have been in California for a short period of time at the tail end of negotiations. It further which he worked for PG&E and Worley, in 2020, he was not domiciled in California during that period and continued to treat Louisiana as his primary residence. Finally, even assuming Harris was residing in California and performing his (remote) work here, the fact that he may have been here rather than in some other state was fortuitous in the sense that nothing about the work assignment required Harris to be here; rather, the work he performed could have been performed anywhere. Under these circumstances, Harris has not demonstrated that California has a greater interest than Texas does with respect to any policy that may be implicated by application of the Texas choice of law clause in the IC Agreement arbitration provision. Therefore, the Court finds that under Nedlloyd, the Texas choice of law provision is enforceable. As Harris has not argued that the delegation clause is unconscionable under Texas law (despite the Court’s invitation to address that question in its August 26, 2022 minute order, dkt. 63) or pointed to any authority in support of that conclusion, the Court further finds that the delegation clause is enforceable. As such, the gateway issues raised by Harris in opposing arbitration are properly decided by the arbitrator and not the Court. C. Whether Claims Against Worley are Subject to Arbitration In the Worley/ERA Motion, both defendants seek to compel arbitration even though Worley was not a party to the IC Agreement. The Court finds that the claims asserted against Worley, like the claims asserted against ERA, are subject to arbitration for the reasons set forth below.10 As a preliminary matter, the Court again is faced with a choice of law question. In general, “a litigant who is not a party to an arbitration agreement may invoke arbitration under the FAA if the relevant state contract law allows the litigant to enforce the agreement.” Kramer v. Toyota Motor Corp., 705 F.3d 1122, 1128 (9th Cir. 2013). Here, however, the question of which state’s law arises because of the choice of law provision in the IC Agreement providing that that agreement is to be “construed and interpreted in accordance with” Texas law. The Court concludes that that provision, on its face, does not extend to a nonsignatory’s attempt to enforce an arbitration agreement against a signatory. The Court further notes that Worley has not argued that Texas law applies to this question or identified any differences between California and Texas contract law on this issue. Moreover, PG&E (the only party to address the question under Texas law) cited authority suggesting that the relevant state law is the same whether the Court applies California or Texas law. PG&E Motion at 8 (citing Trujillo v. Volt Management Corp., 2020 WL 1906097, *5 (W.D. Tex. Apr. 17, 2020), aff’d 846 Fed. Appx. 233 (5th Cir. 2021)). Therefore, the Court applies California law to the question of whether Worley can enforce the arbitration provision against Harris with respect to the claims Harris asserts against it in this case. “General contract and agency principles apply in determining the enforcement of an arbitration agreement by or against nonsignatories.” Mundi v. Union Sec. Life Ins. Co., 555 F.3d 1042, 1045 (9th Cir. 2009) (citing Comer v. Micor, Inc., 436 F.3d 1098, 1101 (9th Cir. 2006)). “‘Among these principles are 1) incorporation by reference; 2) assumption; 3) agency; 4) veil- piercing/alter ego; and 5) estoppel.’” Id. (quoting Comer v. Micor, Inc., 436 F.3d at 1101) (internal quotations and citation omitted). “A nonsignatory also can seek to enforce an arbitration agreement as a third party beneficiary.” Id. (citation omitted). Although ERA and Worley assert in their briefs that Worley is a third-party beneficiary of the Arbitration Provision, they have not made any attempt to show that the arbitration provision in the IC Agreement was “made expressly for the benefit of [Worley][,]” as is required under California law. See Cal. Civ. Code § 1559. California courts interpret the word “expressly” as the negative of “incidentally.” Spinks v. Equity Residential Briarwood Apts., 171 Cal. App. 4th 1004 (2009). Thus, “it is not enough that the third party would incidentally have benefited from performance. . . . The contracting parties must have intended to confer a benefit on the third party.” Id. (citation and internal quotation marks omitted). While it is not inconceivable that Worley is, in fact, an intended beneficiary of the arbitration provision in the IC Agreement, it has not demonstrated as much having failed to address (or even identify) the relevant legal standards that govern that question. ERA under the doctrine of equitable estoppel. “California law . . . allows a nonsignatory to invoke arbitration under the doctrine of equitable estoppel even when a signatory ‘attempts to avoid arbitration by suing nonsignatory defendants for claims that are based on the same facts and are inherently inseparable from arbitrable claims against signatory defendants.’” Franklin v. Cmty. Reg’l Med. Ctr., 998 F.3d 867, 870–71 (9th Cir. 2021) (citing Metalclad Corp. v. Ventana Env’t Organizational P’ship, 109 Cal.App.4th 1705, 1713 (2003) (quotation marks and citation omitted)). In determining whether this doctrine applies, courts “look to ‘the relationships of persons, wrongs and issues,’ and in particular, whether the claims are ‘intimately founded in and intertwined with the underlying contract obligations.’” Id. (quoting Metalclad, 109 Cal. App. 4th at 1713). In Franklin, the plaintiff was a nurse who had entered into an arbitration and employment agreement with a staffing agency and asserted claims under the California labor code against the hospital where the staffing agency had assigned her to work. 998 F.3d at 869. Although the hospital was not a signatory to the agreement, the court found that under California law, “[the] signatory employee’s claim against [the] nonsignatory client of the staffing agency [was] ‘intimately founded in and intertwined with’ the employment contract.” Id. at 871. In reaching this conclusion, the court relied on Garcia v. Pexco, LLC, 11 Cal.App.5th 782 (2017), which it found to be an accurate statement of California law and consistent with Ninth Circuit precedent on equitable estoppel. Id. at 871-873. In Garcia v. Pexco, the plaintiff asserted claims under the California Labor Code against the staffing agency that hired him (Real Time) and the nonsignatory client for whom he performed work (Pexco) on a joint employer theory. 11 Cal. App. 5th at 789. The court found that the claims against Pexco were “intimately founded in and intertwined with” his employment contract with Real Time. Id. at 796-97. In reaching that conclusion, the court rejected the plaintiff’s argument that the claims were not “sufficiently ‘intertwined’ with the underlying arbitration agreement” because he asserted statutory claims against Pexco, observing that “a claim ‘arising out of’ a contract does not itself need to be contractual.” Id. at 787 (citing Coast Plaza Doctors Here, as in Garcia, Harris asserts his claims against ERA and Worley as joint employers and bases all of his claims against ERA and Worley on the same set of facts. Further, Worley is described as the “client” in the draft IC Agreement supplied by Harris as an attachment to his SAC. The one apparent difference between this case and Garcia is that the arbitration provision here, in contrast to the one in Garcia, does not expressly state that it covers the statutory claims that are asserted in this case. Harris, however, has not argued that his claims – as to ERA or Worley -- are outside of the scope of the arbitration provision. Furthermore, any challenge on this basis as to his claims against ERA have been delegated to the arbitrator to decide; the principles that underly the equitable estoppel doctrine support the conclusion that such challenges as they relate to Harris’s claims against Worley should therefore also be decided by the arbitrator. In particular, to the extent Harris’s claims against ERA and Worley are essentially the same, it would be unfair for the Court to decide this gateway issue as to Worley when it must be arbitrated as to his claims against ERA. Therefore, the Court finds that Worley is entitled to enforce the arbitration provision as to the claims Harris asserts against it. D. Whether Claims Against PG&E are Subject to Arbitration PG&E also seeks to enforce the Arbitration Provision against Harris, arguing that under both California law and Texas law, Harris’s claims against PG&E should be compelled into arbitration “given that Plaintiff has brought the exact same claims and theories against both ERA and PG&E” and Harris claims that PG&E acted in unison with ERA. PG&E Motion (dkt. 46) at 8 (citing Garcia v. Pexco, LLC, 11 Cal. App. 5th 782, 788 (2017); Trujillo v. Volt Management Corp., 2020 WL 1906097, *5 (W.D. Tex. Apr. 17, 2020), aff’d 846 Fed. Appx. 233 (5th Cir. 2021)). In his opposition brief (dkt. 57), Harris incorporates his arguments in opposition to the Worley/ERA Motion that the arbitration agreement should not be enforced because it is unconscionable, but he does not dispute that PG&E acted in unison with signatory ERA or challenge PG&E’s assertion that the claims against it are so intertwined with those that are asserted against ERA that they must be arbitrated under the doctrine of equitable estoppel. The Court finds that under the doctrine of equitable estoppel, the Arbitration Provision is 2 For the reasons stated above, the Motions are GRANTED to the extent ERA, Worley and 3 PG&E seek to compel arbitration. The Court finds that Harris’s claims, including his challenges 4 on gateway issues of arbitrability, are subject to arbitration under the arbitration provision of the 5 IC Agreement. Therefore, the Court dismisses this case, in its entirety, without prejudice under 6 Rule 12(b)(1) for lack of subject matter jurisdiction. The Clerk is instructed to enter judgment 7 stating that the case has been dismissed without prejudice and close the case. 9 Dated: November 2, 2022 10 € J PH C. SPERO 11 ief Magistrate Judge 12

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