1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 FRANK SHAMBLIN, individually and No. 2:23-cv-00605-DJC-AC 11 on behalf of all other similarly situated 12 individuals, 13 Plaintiff, ORDER GRANTING MOTION TO COMPEL ARBITRATION 14 v. 15 ANDY FRAIN SERVICES, INC.; 16 COHESIVE NETWORKS 2, INC.; and DOES 1 to 100, 17 Defendants. 18 19 20 Plaintiff Frank Shamblin brings a putative class action against Defendants Andy 21 Frain Services, Inc. (“Andy Frain Services”) and Cohesive Networks 2, Inc. (“Cohesive”), 22 along with 100 Doe Defendants, alleging six causes of actions for violations of 23 California’s Labor Codes, a “collective action” for violations of the Fair Labor 24 Standards Act, and a derivative action under California’s Unfair Competition Law. 25 Andy Frain Services moves to compel arbitration of Plaintiff’s individual claims, and to 26 stay Plaintiff’s representative, class, and collective action claims that are not waived by 27 the arbitration agreement. For the reasons set forth below, the Court GRANTS Andy 28 1 Frain Services, Inc.’s Motion to Compel Arbitration and Stay Proceedings Pending 2 Arbitration (ECF No. 3) and DISMISSES Plaintiff’s remaining claims. 3 BACKGROUND 4 Plaintiff worked for Defendant Andy Frain Services from January 2022 until 5 September 26, 2022. (See Mem. of P. and A. in Supp. of Andy Frain Services’s Mot. to 6 Compel Arbitration and Stay Proceedings Pending Arbitration (ECF No. 3-1) at 2 7 (“Motion” or “Mot.”).) Plaintiff and the other class members worked as security guards 8 for Andy Frain Services. (See Class and Collective Action Compl. (ECF No. 1-4) ¶ 6 9 (“Complaint” or “Compl.”); Mot. at 1.) 10 Although Andy Frain Services hired and employed Plaintiff and other class 11 members, Andy Frain Services used Cohesive, a “Professional Employer 12 Organization[,]” to “handle[ ] Andy Frain Services, Inc.’s human resources and 13 administrative functions, including onboarding, payroll, benefits, workers’ 14 compensation, and training.” (Mot. at 2 (citing Decl. of Patricia Tonoff in Supp. of 15 Andy Frain Services’s Mot. (ECF No. 3-3) ¶¶ 2–4 (“Tonoff Declaration” or “Tonoff 16 Decl.”).) As explained by Andy Frain Services’s Director of Human Resources, Patricia 17 Tonoff, every Andy Frain Services employee completes an application and 18 onboarding process “through its career site system” that requires an employee to 19 proceed to a secondary website “[o]nce the decision to hire is established[,]” where 20 the employee “creates their own unique log-in and password and is considered an 21 employee conditioned upon the completion of the mandatory onboarding 22 documents and any required background screening.” (Id. ¶ 3.) Based on Director 23 Tonoff’s review of Andy Frain Services’s human resources system and records, Plaintiff 24 applied for a position on January 5, 2022, was extended an employment offer on 25 January 8th, and created his unique log-on credentials and password for the system 26 and electronically signed the employment agreement on January 11th. (Id. ¶ 5 (citing 27 Tonoff Decl. Ex. A (ECF No. 3-3 at 4–6) (the “Agreement”) (providing a copy of the 28 signed Agreement)).) 1 Plaintiff filed the Complaint in San Joaquin County Superior Court on February 2 14, 2023. (See Mot. at 2; Compl. at 10.) Andy Frain Services removed the case to 3 federal court on March 30, 2023. (See ECF No. 1.) Andy Frain Services then moved to 4 compel arbitration on April 6, 2023. (See Mot.) Plaintiff filed the Opposition on April 5 20, 2023 and Andy Frain Services filed its Reply on May 1, 2023. (See Pl.’s Opp’n to 6 Andy Frain Services’s Mot. (ECF No. 6) (“Opposition” or “Opp’n”); Andy Frain 7 Services’s Reply to Pl.’s Opp’n to Andy Frain Services’s Mot. (ECF No. 7) (“Reply”).) 8 The matter is now fully briefed. 9 DISCUSSION 10 I. Legal Standard 11 The Federal Arbitration Act (“FAA”) governs arbitration agreements. 9 U.S.C. 12 § 2. The FAA affords parties the right to obtain an order directing that arbitration 13 proceed in the manner provided for in the agreement. 9 U.S.C. § 4. To decide on a 14 motion to compel arbitration, a court must determine: (1) whether a valid agreement 15 to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute 16 at issue. Boardman v. Pac. Seafood Grp., 822 F.3d 1011, 1017 (9th Cir. 2016). 17 Arbitration is a matter of contract, and the FAA requires courts to honor parties’ 18 expectations. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 351 (2011). However, 19 parties may use general contract defenses to invalidate an agreement to arbitrate. 20 See id. at 339. Thus, a court should order arbitration of a dispute only where satisfied 21 neither the agreement’s formation nor enforceability or applicability to the dispute is 22 at issue. See Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 299–300 (2010). 23 “Where a party contests either or both matters, ‘the court’ must resolve the 24 disagreement[,]” id. (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 25 943 (1995)), because a party “cannot be required to submit to arbitration any dispute 26 it has not agreed so to submit.” Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 (9th 27 Cir. 2014) (quoting United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 28 574, 582 (1960)). If a valid arbitration agreement encompassing the dispute exists, 1 arbitration is mandatory. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). 2 Under § 3 of the FAA, a court, “upon being satisfied that the issue involved . . . is 3 referable to arbitration, shall on application of one of the parties stay the trial of the 4 action until such arbitration has been [completed] . . . .” 9 U.S.C. § 3. 5 The party seeking to compel arbitration bears the burden of proving by a 6 preponderance of the evidence the existence of an agreement to arbitrate. Ashbey v. 7 Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 1323 (9th Cir. 2015). In resolving a 8 motion to compel arbitration, “[t]he summary judgment standard [of Federal Rule of 9 Civil Procedure 56] is appropriate because the district court’s order compelling 10 arbitration ‘is in effect a summary disposition of the issue of whether or not there had 11 been a meeting of the minds on the agreement to arbitrate.’” Hansen v. LMB Mortg. 12 Servs., Inc., 1 F.4th 667, 670 (9th Cir. 2021) (quoting Par-Knit Mills, Inc. v. Stockbridge 13 Fabrics Co., 636 F.2d 51, 54 n.9 (3d Cir. 1980)). Under this standard of review, “[t]he 14 party opposing arbitration receives the benefit of any reasonable doubts and the 15 court draws reasonable inferences in that party’s favor, and only when no genuine 16 disputes of material fact surround the arbitration agreement’s existence and 17 applicability may the court compel arbitration.” Smith v. H.F.D. No. 55, Inc., No. 2:15- 18 CV-01293-KJM-KJN, 2016 WL 881134, at *4 (E.D. Cal. Mar. 8, 2016). “A material fact 19 is genuine if ‘the evidence is such that a reasonable jury could return a verdict for the 20 nonmoving party.’” Hanon v.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 FRANK SHAMBLIN, individually and No. 2:23-cv-00605-DJC-AC 11 on behalf of all other similarly situated 12 individuals, 13 Plaintiff, ORDER GRANTING MOTION TO COMPEL ARBITRATION 14 v. 15 ANDY FRAIN SERVICES, INC.; 16 COHESIVE NETWORKS 2, INC.; and DOES 1 to 100, 17 Defendants. 18 19 20 Plaintiff Frank Shamblin brings a putative class action against Defendants Andy 21 Frain Services, Inc. (“Andy Frain Services”) and Cohesive Networks 2, Inc. (“Cohesive”), 22 along with 100 Doe Defendants, alleging six causes of actions for violations of 23 California’s Labor Codes, a “collective action” for violations of the Fair Labor 24 Standards Act, and a derivative action under California’s Unfair Competition Law. 25 Andy Frain Services moves to compel arbitration of Plaintiff’s individual claims, and to 26 stay Plaintiff’s representative, class, and collective action claims that are not waived by 27 the arbitration agreement. For the reasons set forth below, the Court GRANTS Andy 28 1 Frain Services, Inc.’s Motion to Compel Arbitration and Stay Proceedings Pending 2 Arbitration (ECF No. 3) and DISMISSES Plaintiff’s remaining claims. 3 BACKGROUND 4 Plaintiff worked for Defendant Andy Frain Services from January 2022 until 5 September 26, 2022. (See Mem. of P. and A. in Supp. of Andy Frain Services’s Mot. to 6 Compel Arbitration and Stay Proceedings Pending Arbitration (ECF No. 3-1) at 2 7 (“Motion” or “Mot.”).) Plaintiff and the other class members worked as security guards 8 for Andy Frain Services. (See Class and Collective Action Compl. (ECF No. 1-4) ¶ 6 9 (“Complaint” or “Compl.”); Mot. at 1.) 10 Although Andy Frain Services hired and employed Plaintiff and other class 11 members, Andy Frain Services used Cohesive, a “Professional Employer 12 Organization[,]” to “handle[ ] Andy Frain Services, Inc.’s human resources and 13 administrative functions, including onboarding, payroll, benefits, workers’ 14 compensation, and training.” (Mot. at 2 (citing Decl. of Patricia Tonoff in Supp. of 15 Andy Frain Services’s Mot. (ECF No. 3-3) ¶¶ 2–4 (“Tonoff Declaration” or “Tonoff 16 Decl.”).) As explained by Andy Frain Services’s Director of Human Resources, Patricia 17 Tonoff, every Andy Frain Services employee completes an application and 18 onboarding process “through its career site system” that requires an employee to 19 proceed to a secondary website “[o]nce the decision to hire is established[,]” where 20 the employee “creates their own unique log-in and password and is considered an 21 employee conditioned upon the completion of the mandatory onboarding 22 documents and any required background screening.” (Id. ¶ 3.) Based on Director 23 Tonoff’s review of Andy Frain Services’s human resources system and records, Plaintiff 24 applied for a position on January 5, 2022, was extended an employment offer on 25 January 8th, and created his unique log-on credentials and password for the system 26 and electronically signed the employment agreement on January 11th. (Id. ¶ 5 (citing 27 Tonoff Decl. Ex. A (ECF No. 3-3 at 4–6) (the “Agreement”) (providing a copy of the 28 signed Agreement)).) 1 Plaintiff filed the Complaint in San Joaquin County Superior Court on February 2 14, 2023. (See Mot. at 2; Compl. at 10.) Andy Frain Services removed the case to 3 federal court on March 30, 2023. (See ECF No. 1.) Andy Frain Services then moved to 4 compel arbitration on April 6, 2023. (See Mot.) Plaintiff filed the Opposition on April 5 20, 2023 and Andy Frain Services filed its Reply on May 1, 2023. (See Pl.’s Opp’n to 6 Andy Frain Services’s Mot. (ECF No. 6) (“Opposition” or “Opp’n”); Andy Frain 7 Services’s Reply to Pl.’s Opp’n to Andy Frain Services’s Mot. (ECF No. 7) (“Reply”).) 8 The matter is now fully briefed. 9 DISCUSSION 10 I. Legal Standard 11 The Federal Arbitration Act (“FAA”) governs arbitration agreements. 9 U.S.C. 12 § 2. The FAA affords parties the right to obtain an order directing that arbitration 13 proceed in the manner provided for in the agreement. 9 U.S.C. § 4. To decide on a 14 motion to compel arbitration, a court must determine: (1) whether a valid agreement 15 to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute 16 at issue. Boardman v. Pac. Seafood Grp., 822 F.3d 1011, 1017 (9th Cir. 2016). 17 Arbitration is a matter of contract, and the FAA requires courts to honor parties’ 18 expectations. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 351 (2011). However, 19 parties may use general contract defenses to invalidate an agreement to arbitrate. 20 See id. at 339. Thus, a court should order arbitration of a dispute only where satisfied 21 neither the agreement’s formation nor enforceability or applicability to the dispute is 22 at issue. See Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 299–300 (2010). 23 “Where a party contests either or both matters, ‘the court’ must resolve the 24 disagreement[,]” id. (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 25 943 (1995)), because a party “cannot be required to submit to arbitration any dispute 26 it has not agreed so to submit.” Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 (9th 27 Cir. 2014) (quoting United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 28 574, 582 (1960)). If a valid arbitration agreement encompassing the dispute exists, 1 arbitration is mandatory. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). 2 Under § 3 of the FAA, a court, “upon being satisfied that the issue involved . . . is 3 referable to arbitration, shall on application of one of the parties stay the trial of the 4 action until such arbitration has been [completed] . . . .” 9 U.S.C. § 3. 5 The party seeking to compel arbitration bears the burden of proving by a 6 preponderance of the evidence the existence of an agreement to arbitrate. Ashbey v. 7 Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 1323 (9th Cir. 2015). In resolving a 8 motion to compel arbitration, “[t]he summary judgment standard [of Federal Rule of 9 Civil Procedure 56] is appropriate because the district court’s order compelling 10 arbitration ‘is in effect a summary disposition of the issue of whether or not there had 11 been a meeting of the minds on the agreement to arbitrate.’” Hansen v. LMB Mortg. 12 Servs., Inc., 1 F.4th 667, 670 (9th Cir. 2021) (quoting Par-Knit Mills, Inc. v. Stockbridge 13 Fabrics Co., 636 F.2d 51, 54 n.9 (3d Cir. 1980)). Under this standard of review, “[t]he 14 party opposing arbitration receives the benefit of any reasonable doubts and the 15 court draws reasonable inferences in that party’s favor, and only when no genuine 16 disputes of material fact surround the arbitration agreement’s existence and 17 applicability may the court compel arbitration.” Smith v. H.F.D. No. 55, Inc., No. 2:15- 18 CV-01293-KJM-KJN, 2016 WL 881134, at *4 (E.D. Cal. Mar. 8, 2016). “A material fact 19 is genuine if ‘the evidence is such that a reasonable jury could return a verdict for the 20 nonmoving party.’” Hanon v. Dataproducts Corp., 976 F.2d 497, 500 (9th Cir. 1992) 21 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Conversely, 22 “[w]here the record taken as a whole could not lead a rational trier of fact to find for 23 the nonmoving party, there is no ‘genuine issue for trial.’” Id. (quoting Matsushita Elec. 24 Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). 25 //// 26 //// 27 //// 28 1 II. Analysis 2 A. The Arbitration Agreement Is Enforceable. 3 Plaintiff does not dispute that the FAA governs the Agreement or that the 4 Agreement covers the claims raised in the Complaint. (See Mot. at 4–6.) Plaintiff only 5 argues that the Agreement is unconscionable. (See Opp’n at 1–3.) The Court 6 disagrees. 7 Under California law, unconscionability has a procedural element and a 8 substantive element. See OTO, L.L.C. v. Kho, 8 Cal. 5th 111, 125 (2019); Iyere v. Wise 9 Auto Grp., 87 Cal. App. 5th 747, 759 (2023), review denied (Apr. 26, 2023). The 10 procedural element addresses the circumstances of contract negotiation and 11 formation, focusing on oppression and surprise due to unequal bargaining power, 12 while the substantive element pertains to the fairness of an agreement’s actual terms 13 and whether they are overly harsh or one-sided. OTO, L.L.C., 8 Cal. 5th at 125; Iyere, 14 87 Cal. App. 5th at 759. While both the procedural and substantive elements must be 15 present to establish unconscionability, they need not be present in the same degree; 16 the more one element is present, the less present the other element needs to be. See 17 OTO, L.L.C., 8 Cal. 5th at 125–26; Iyere, 87 Cal. App. 5th at 759. 18 1. Procedural Unconscionability 19 Procedurally, Plaintiff argues that the Agreement is unconscionable as an 20 adhesive contract presented on a take-it-or-leave-it basis. (See Opp’n at 2 (citing 21 Szetela v. Discover Bank, 97 Cal. App. 4th 1094, 1100 (2002)).) Andy Frain Services 22 argues that Plaintiff’s argument is procedurally deficient because Plaintiff provided no 23 facts or declaration to support this assertion. (See Reply at 3.) However, Andy Frain 24 Services ignores Director Tonoff’s Declaration, which clearly indicated that, after an 25 “Individual creates their unique log-in password[,]” that individual “is considered an 26 employee conditioned upon the competition of the mandatory onboarding documents 27 and any required screening.” (Tonoff Decl. ¶ 3 (emphasis added).) Director Tonoff 28 further explained that, during the onboarding process, the employee “is also 1 presented with documents to acknowledge and sign, including, among other items, 2 Employment-At-Will And Arbitration Agreement.” (Id. ¶ 4.) Therefore, even though 3 Plaintiff failed to provide support for his argument that the Agreement is an adhesive 4 contract, Director Tonoff’s Declaration supports Plaintiff’s argument and thus 5 establishes that there is “some measure of procedural unconscionability.” Roman v. 6 Superior Ct., 172 Cal. App. 4th 1462, 1470 (2009) (citing Armendariz v. Found. Health 7 Psychcare Servs., Inc., 24 Cal. 4th 83, 115 (2000); Little v. Auto Stiegler, Inc., 29 Cal. 4th 8 1064, 1071 (2003)). 9 However, courts have repeatedly recognized that an adhesive contract presents 10 only a “low” degree of procedural unconscionability absent additional allegations of 11 surprise and duress or oppression, which are not present here. See, e.g., Davis v. 12 Kozak, 53 Cal. App. 5th 897, 907 (2020) (quoting Serpa v. Cal. Surety Investigations, 13 Inc., 215 Cal. App. 4th 695, 704 (2013), as modified (Apr. 19, 2013), as modified (Apr. 14 26, 2013)); Vigueras v. Red Robin Int’l, Inc., No. SA-CV-1701422-JVS-DFM, 2019 WL 15 1425887, at *4 (C.D. Cal. Feb. 21, 2019) (collecting cases). Plaintiff made no 16 additional allegations of oppression. Contrast with OTO, L.L.C., 8 Cal. 5th at 126–27. 17 Moreover, the Court is unable to find that the Agreement surprised Plaintiff because 18 the Agreement clearly indicates at the top that it is an “EMPLOYMENT-AT-WILL AND 19 ARBITRATION AGREEMENT[.]” (Tonoff Decl. Ex. A.) Compare with, e.g., Cohen v. 20 CBR Sys., Inc., 625 F. Supp. 3d 997, 1003 (N.D. Cal. 2022) (noting that the arbitration 21 clause was on the first page of a four-page contract and finding that there was thus 22 only a minimal amount of procedural unconscionability arising from the adhesive 23 nature of the contract). Furthermore, the Court is unable to find that the Agreement 24 surprised Plaintiff because the Agreement included an additional disclaimer at the 25 end before the signature section. (Tonoff Decl. Ex. A). Compare with, e.g., Cristo v. 26 Charles Schwab Corp., No. 17-CV-1843-GPC-MDD, 2018 WL 1737544, at *6–7 (S.D. 27 Cal. Apr. 11, 2018) (citing Serpa, 215 Cal. App. 4th at 703; Molina v. Scandinavian 28 Designs, Inc., No. 13-CV-04256 NC, 2014 WL 1615177, at *7 (N.D. Cal. Apr. 21, 2014)) 1 (finding that, although the font size was tiny, it was similar to the size of the font for the 2 rest of the agreement and that there was a bolded arbitration provision located right 3 above the signature line of the application, therefore concluding that there was only a 4 minimal amount of procedural unconscionability arising from the adhesive nature of 5 the contract). 6 Therefore, Plaintiff only establishes a “low” amount of procedural 7 unconscionability that arises solely from the adhesive nature of the contract. See, e.g., 8 Dhaliwal v. Ace Hardware Corp., No. 2:22-CV-00446-DAD-KJN, 2023 WL 2555471, at 9 *6–7 (E.D. Cal. Mar. 17, 2023) (finding only a “slight degree of procedural 10 unconscionability” where the agreement was adhesive, failed to attach the 11 incorporated rules, was two pages long, clearly labeled “ARBITRATION” and included 12 a disclosure at the end by the signature line (citation omitted)). 13 2. Substantive Unconscionability 14 Because Plaintiff made no additional arguments regarding the procedural 15 unconscionability of the Agreement, the Court must find a corresponding high 16 amount of substantive unconscionability to find the contract is unconscionable overall 17 and thus unenforceable. See OTO, L.L.C., 8 Cal. 5th at 130 (quoting Carmona v. 18 Lincoln Millennium Car Wash, Inc., 226 Cal. App. 4th 74, 85 (2014)). Plaintiff does not 19 meet this burden. See Armendariz, 24 Cal. 4th at 102–03. 20 As an initial matter, the Court notes that Andy Frain appears to have copied 21 from the arbitration agreement that was challenged in Little, 29 Cal. 4th at 1069–70, 22 1073–76, except for a “one-sided arbitration appeal” clause that the California 23 Supreme Court held was substantively unconscionable. The California Supreme Court 24 found that the agreement was only procedurally unconscionable to the extent the 25 contract was adhesive. Therefore, Plaintiff faces an uphill battle in establishing the 26 substantive unconscionability of the arbitration agreement. 27 California courts “often look to whether the [arbitration] agreement meets a 28 minimum level of fairness based on the factors set forth in Armendariz.” Davis, 53 Cal. 1 App. 5th at 910 (citing Wherry v. Award, Inc., 192 Cal. App. 4th 1242, 1248 (2011)); 2 see, e.g., Murrey v. Superior Ct., 87 Cal. App. 5th 1223, 1248 (2023). Courts look to 3 whether the agreement: (1) provides for neutral arbitrators, (2) provides for more than 4 minimal discovery, (3) requires a written award that permits limited judicial review, 5 (4) provides for all of the types of relief that would otherwise be available in court, and 6 (5) requires the employer to pay the arbitrator’s fees and costs unique to arbitration. 7 Murrey, 87 Cal. App. 5th at 1248 (citing Armendariz, 24 Cal. 4th at 102–03). 8 Elimination of or interference with any of these basic provisions makes an arbitration 9 agreement substantively unconscionable. Wherry, 192 Cal. App. 4th at 1248. 10 Plaintiff contends that the Agreement fails on all five factors courts consider 11 under Armendariz. (See Opp’n at 2–3.) However, as Andy Frain Services notes, most 12 of Plaintiff’s arguments fail because Plaintiff failed to recognize that the Agreement 13 incorporated the rules of the California Arbitration Act (“CAA”), codified at California 14 Code of Civil Procedure section 1280, et. seq., which provide relevant default or 15 backstop rules to fill in the absences about which Plaintiff complains. (See Reply at 1– 16 3.) 17 For instance, although Plaintiff complains that there is no way to designate an 18 arbitrator and that, theoretically, Andy Frain Services could continually hold out to 19 prevent any arbitrator from being selected by mutual agreement (see Opp’n at 2), the 20 CAA provides that, should the method agreed to by the parties fail for whatever 21 reason, upon petition by a party, a court may appoint a neutral arbitrator, and 22 provides the steps for so doing. See Cal. Civ. Proc. Code § 1281.6. Plaintiff also 23 ignores the fact that the Agreement includes both the mandatory and discretionary 24 discovery procedures provided for in the CAA. (See Reply at 2; Tonoff Decl. Ex. A 25 (“Both I and the Company agree that any claim . . . shall be submitted to and 26 determined by binding arbitration under the [FAA], in conformity with the procedures 27 of the [CAA] . . . including section 1283.05 and all of the Act’s other mandatory and 28 permissive rights to discovery[ ].”).) The CAA also provides for a right of appeal. (See 1 Reply at 3.) See Cal. Civ. Proc. Code §§ 1294(b)–(d); 1294.2. And the CAA has 2 provisions on awarding costs and avoiding fees. (See Reply at 3.) See Cal. Civ. Proc. 3 Code §§ 1281.97–1281.99. See Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1268 4 (9th Cir. 2017) (noting that where a clause was consistent with the relevant CAA 5 provisions, it was not substantively unconscionable). 6 Plaintiff’s only potential remaining argument is that the Agreement is 7 substantively unconscionable because it does not provide for all types of relief. (See 8 Opp’n at 3.) Plaintiff’s real concern, however, appears to be a conflict-of-law issue that 9 California’s law might not apply because Andy Frain Services is domiciled in Illinois, 10 where it is incorporated and the principal place of business is located. (See Reply at 11 2–3 (quoting id.); also Mot. at 1–2 (explaining that Andy Frain Services is domiciled in 12 Illinois and that Cohesive is domiciled in Florida).) Plaintiff’s concern is overstated. 13 The Agreement states that it will resolve the dispute based on the law governing the 14 claims and defenses pleaded. (See Tonoff Decl. Ex. A.) Because the Agreement was 15 drafted in California and substantially performed in California, California law should 16 potentially govern any claim arising from the Agreement. See Cal. Civ. Code § 1646 17 (indicating that contracts are to be interpreted according to the law and usage of the 18 place of performance or the place where the contract was made); Washington Mut. 19 Bank, FA v. Superior Ct., 24 Cal. 4th 906, 919–21 (2001) (discussing California’s 20 governmental-interest test for conflict of law issues where a choice-of-law provision 21 does not govern and that would dictate California law apply if it were the forum state). 22 For the above-stated reasons, the Court finds that the Agreement does not 23 “eliminat[e] [ ] or interfere[ ] with any of the[ ] basic provisions” that establish the 24 minimum level of fairness for mandatory employment arbitration agreements under 25 Armendariz. Wherry, 192 Cal. App. 4th at 1248. Thus, the Agreement is not 26 substantively unconscionable, only has a minimal amount of procedural 27 unconscionability as a contract of adhesion, and is not overall unconscionable, 28 therefore making the Agreement enforceable. Accordingly, the Court GRANTS Andy 1 Frain Services’s Motion and ORDERS that Plaintiff is compelled to arbitrate his 2 individual claims against Andy Frain Services. 3 However, Andy Frain Services also asked that the Court compel arbitration of 4 Plaintiff’s claims against Cohesive, arguing that the Agreement applies to all named 5 Defendants, which Plaintiff did not contest. (See Reply 4 (citing Thomas v. Westlake, 6 204 Cal. App. 4th 605, 614–15 (2012)).) Normally, only the parties to the arbitration 7 agreement can enforce it, see Cal. Code Civ. Proc. § 1281.2, but an exception exists 8 where a plaintiff alleges that a defendant acted as an agent of a party to the 9 agreement, see, e.g., Thomas, 204 Cal. App. 4th at 614 (collecting cases)). Here, 10 Plaintiff alleges that “each of the Defendants was the agent or employee of the other 11 defendants and acted in the scope of agency or employment.” (Compl. ¶ 5.) 12 Moreover, Plaintiff brought each cause of action “[a]gainst [a]ll Defendants[.]” (Id. 13 ¶¶ 23, 29, 34, 38, 44, 49, 52, 55.) Thus, Cohesive falls within the exception and may 14 enforce the arbitration clause against Plaintiff. See Thomas, 204 Cal. App. 4th at 614– 15 15. 16 Accordingly, all of Plaintiff’s individual claims are subject to arbitration. 17 B. Disposing of the Class, Collective, or Representative Claims. 18 Andy Frain Services requests that the Court dismiss the remainder of Plaintiff’s 19 claims, and Plaintiff does not object to dismissal. (See Reply 4.) The Ninth Circuit has 20 held that a district court has the discretion to stay or dismiss a plaintiff’s claims where 21 all of the relevant claims are subject to arbitration. See Sparling v. Hoffman Const. Co., 22 864 F.2d 635, 638 (9th Cir. 1988) (citing Martin Marietta Aluminum, Inc. v. Gen. Elec. 23 Co., 586 F.2d 143, 147–48 (9th Cir. 1978)). The Court has already found that Plaintiff’s 24 individual claims are subject to arbitration. That leaves open the question of how to 25 handle Plaintiff’s representative, class, and collective claims, and the Court cannot 26 grant Andy Frain Services’s request until it finds that the class or representative claims 27 are also subject to arbitration or have been waived. The Court finds that the 28 1 Agreement does not permit arbitration of the class or representative claims but 2 instead includes an enforceable waiver of those claims. 3 The Agreement states that: (1) the Parties “agree to utilize binding individual 4 arbitration[,]” (2) that “any claims brought under this binding arbitration Agreement 5 shall be brought in the individual capacity of” the Parties and “shall not be construed 6 to allow or permit the consolidation or joinder of other claims or controversies 7 involving any other employees or parties, or permit such claims or controversies to 8 proceed as a class or collective action[,]” and (3) that “[u]nder no circumstances shall 9 this Agreement be construed to allow arbitration on a class, collective, or other similar 10 basis.” (Tonoff Decl. Ex. A.) That is clear language that the Agreement does not 11 permit arbitration of class, collective, or representative actions. See Lamps Plus, Inc. v. 12 Varela, 587 U.S. ----, 139 S. Ct. 1407, 1417 (2019) (“Neither silence nor ambiguity 13 provides a sufficient basis for concluding that parties to an arbitration agreement 14 agreed to undermine the central benefits of arbitration itself.”). 15 Further, the Agreement states that Plaintiff “waive[d] any substantive or 16 procedural right that [he] may have to bring or participate in an action brought on a 17 class or collective basis.” (Tonoff Decl. Ex. A.) As the California and U.S. Supreme 18 Courts have recognized, class action or representative action waivers like the one 19 above are enforceable. See Concepcion, 563 U.S. at 351; Iskanian v. CLS Trans. Los 20 Angeles, LLC, 59 Cal. 4th 348, 366 (2014), abrogated by Viking River Cruises, Inc. v. 21 Moriana, 596 U.S. 639 (2022). And several courts in the Eastern District have enforced 22 class action waivers that are similarly broad and vague as the one here. See, e.g., 23 Prostek v. Lincare, Inc., 662 F. Supp. 3d 1100, 1107, 1122 (E.D. Cal. Mar. 21, 2023) 24 (enforcing an unchallenged class action waiver that stated that “[t]he Parties expressly 25 waive any right to submit, initiate or participate in any class, collective, representative, 26 or joint action involving any employee . . . “); Dhaliwal, 2023 WL 2555471, at *2, 9 27 (enforcing a challenged representative and class action waiver by dismissing the 28 putative class claims and staying the proceedings regarding the representative claims 1 under California’s Private Attorney General Act).; Ruiz v. Conduent Com. Sols., LLC, 2 | No. 1:21-CV-1555-JLT-CDB, 2023 WL 3379300, at *2, 12 (E.D. Cal. May 11, 2023) 3 | (enforcing an unopposed representative and class action waiver that stated that, 4 | excluding disputes and cases asserted before the effective date of the agreement, 5 | “neither an Employee nor the Company may initiate or participate in a Dispute ona 6 | class, collective, or consolidated basis, or in a representative capacity on behalf of 7 | other persons or entities that are claimed to be similarly situated.”). 8 Therefore, the Court finds that Plaintiff's class action or collective claims should 9 | be dismissed because of the valid waiver in the Agreement. Thus, Plaintiff's only 10 | claims are the individual claims that are subject to arbitration. As a result, the Court 11 | GRANTS Andy Frain Services's motion to arbitrate and dismiss rather than arbitrate 12 | and stay because “[a]n order compelling arbitration and staying the action isn’t 13 | immediately appealable, but an order compelling arbitration and dismissing the 14 | action is.” Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072, 1073 (9th Cir. 15 | 2014) (citing 9 U.S.C. § 16(a)(3), (b)(1)(2); Green Tree Fin. Corp. — Alabama v. 16 | Randolph, 531 U.S. 79, 87 n.2, 89 (2000)). 17 CONCLUSION 18 For the reasons set forth above, the Court GRANTS Andy Frain Services, Inc.'s 19 | Motion to Compel Arbitration and Stay Proceedings Pending Arbitration (ECF No. 3). 20 | The Court hereby ORDERS that Plaintiff is compelled to arbitrate his individual claims 21 against Andy Frain Services, Inc. and Cohesive Networks 2, Inc. Further, the Court 22 | DISMISSES Plaintiff's remaining claims under the Complaint (ECF No. 1). The Clerk of 23 | the Court is directed to close this case. 24 95 IT IS SO ORDERED. 26 | Dated: _March 19, 2024 Donel J bynetto— Hon. Daniel alabretta 27 UNITED STATES DISTRICT JUDGE 28