1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 | Antonia Vargas and Maria Barrera, No. 2:24-cev-00712-KJM-JDP 12 Plaintiffs, ORDER 13 v. 14 Capstone Logistics, LLC, et al., 1S Defendants. 16 17 Defendant Capstone Logistics, LLC moves to compel arbitration of most of the claims 18 | brought by plaintiffs Antonia Vargas and Maria Barrera. As explained in this order, Capstone has 19 | shown Barrera agreed to arbitrate, but the parties have cited contradictory evidence about whether 20 | Vargas also agreed to arbitrate, so the court grants the motion in part and otherwise holds it in 21 | abeyance. 22 | I. BACKGROUND 23 Vargas and Barrerra claim Capstone violated California labor law. See generally Compl. 24 | 418, ECF No. 1-1. They allege Capstone did not allow them to take breaks, did not pay overtime 25 | wages, did not reimburse them for business expenses, did not take mandatory precautions against 26 | COVID-19, gave them inaccurate wage statements and delayed their final paychecks. See id. 27 | 4§§ 18-26. Vargas and Barrera originally filed this action in California Superior Court. They 28 | proposed to litigate both on behalf of a proposed class and as representatives under California’s
1 Private Attorneys General Act. See generally id. Capstone removed the case to this court under 2 the Class Action Fairness Act of 2005. See generally Not. Removal, ECF No. 1; 28 U.S.C. 3 § 1332(d). 4 After Capstone removed the case, it moved to compel arbitration of Barrera and Vargas’s 5 individual claims, to dismiss claims they were seeking to assert on behalf of a proposed class and 6 to stay their non-individual claims under the Private Attorneys General Act. See Mot. Compel at 7 i, ECF No. 7. According to Capstone’s human resources manager, Capstone has had a 8 “mandatory arbitration program” since long before Barrera and Vargas began working for the 9 company in 2022. See Dickinson Decl. ¶¶ 4–6, ECF No. 7-2. The arbitration program is spelled 10 out in the company’s employee manual, which was available online when Barrera and Vargas 11 started. See id. ¶¶ 6–9. 12 The company’s records show Barrera signed into its online system and acknowledged and 13 accepted the arbitration policy. See id. ¶¶ 9–19. The company does not have similar records for 14 Vargas. Although the company’s records show Vargas created a username and password and 15 began filling out some forms, those records do not include a confirmation showing she ever heard 16 about or saw the handbook or arbitration policy. See id. ¶¶ 20–22. The company relies on a 17 declaration by Vargas’s manager to fill this apparent gap. See generally Garcia Decl., ECF No. 18 7-1. According to the manager’s declaration, it was his practice to “complete a thorough 19 onboarding and orientation with each new associate.” Id. ¶ 7. At a trial, he would testify that he 20 went “page-by-page” through the handbook and arbitration policy on Vargas’s first day, which 21 took about “two hours.” Id. ¶¶ 8–12. Vargas disagrees. She also has submitted a declaration. 22 See generally Vargas Decl., ECF No. 17-1. She remembers spending only about five minutes 23 with her manager on her first day, not two hours. Id. ¶ 3. He told her what her salary would be 24 and asked for her social security number. Id. He did not explain she was agreeing to arbitration, 25 and he did not show her the handbook or even mention it. Id. ¶ 4. Before Capstone moved to 26 compel arbitration, she did not know about the arbitration policy, she never received a copy and 27 she did not know how to find it. Id. ¶ 7. 1 Despite this disagreement, there seems to be no question Capstone’s arbitration policy, if 2 enforced, would require Barrera and Vargas to submit the majority of their claims to individual 3 arbitration. By the terms of the arbitration agreement, employees “agree to use binding 4 arbitration, instead of going to court, as the sole and exclusive means to resolve any ‘Covered 5 Claims’ that arise or have arisen.” Arbitration Agreement ¶ 2, Dickinson Decl. Ex. C, ECF No. 6 7-2. “Covered Claims” include “any claim, dispute and/or controversy that [an employee] may 7 have against the Company,” including claims of “unpaid wages” and “any other similar federal, 8 state or local law or regulation which may apply to the parties’ employment relationship.” Id. ¶ 3. 9 The agreement also includes a class action waiver: “Covered Claims will be arbitrated only on an 10 individual basis.” Id. ¶ 5. The agreement “shall not be construed to allow or permit the 11 consolidation or joinder of other claims or controversies involving any other employees or 12 parties, or permit such claims or controversies to proceed as a class or collective action.” Id. And 13 by the terms of the agreement, employees agree continued employment “is deemed to be an 14 acceptance” of the arbitration agreement. Id. ¶ 2. 15 Barrera does not contest Capstone’s assertion she agreed to these terms. Only Vargas puts 16 forward any opposition to Capstone’s motion to compel arbitration. She contends Capstone 17 cannot compel her to arbitrate because she did not agree to arbitrate any claims. See generally 18 Opp’n, ECF No. 17. Briefing is now complete. See generally Reply, ECF No. 18. The court 19 submitted the matter without oral arguments. 20 II. DISCUSSION 21 The parties to a federal lawsuit “are not required to arbitrate their disagreements unless 22 they have agreed to do so.” Davis v. Nordstrom, Inc., 755 F.3d 1089, 1092 (9th Cir. 2014). 23 Contracts to arbitrate can be inferred from the circumstances and the parties’ actions, but a “clear 24 agreement” is necessary. Id. (quoting Avery v. Integrated Healthcare Holdings, Inc., 25 218 Cal. App. 4th 50, 59 (2013)). A clear agreement can be inferred from an employee’s 26 decision to continue working after receiving reasonable notice that the employer has made an 27 arbitration agreement part of its policy, as long as that agreement “does not interfere with vested 28 employee benefits.” Id. at 1093 (quoting Asmus v. Pac. Bell, 23 Cal. 4th 1, 11 (2000)). 1 If one party disputes another’s claim that they agreed to arbitrate, the Federal Arbitration 2 Act requires the district court to “hear the parties” and determine whether “the making of the 3 arbitration agreement” is “in issue.” 9 U.S.C. § 4. That is, the court decides whether there is a 4 “genuine dispute of material fact” under the standard of Federal Rule of Civil Procedure 56, 5 which governs motions for summary judgment. Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667, 6 670 (9th Cir. 2021). Under that rule, a dispute is “genuine” if “a reasonable jury could return a 7 verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A 8 fact is “material” if it “might affect the outcome of the suit under the governing law.” Id. If there 9 is a genuine dispute of material fact, the court “shall proceed summarily to the trial thereof.” 10 9 U.S.C. § 4. 11 Barrera’s agreement to arbitrate is not “in issue” under this standard. There is no genuine 12 dispute of material fact that she agreed to arbitrate her claims individually.
Free access — add to your briefcase to read the full text and ask questions with AI
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 | Antonia Vargas and Maria Barrera, No. 2:24-cev-00712-KJM-JDP 12 Plaintiffs, ORDER 13 v. 14 Capstone Logistics, LLC, et al., 1S Defendants. 16 17 Defendant Capstone Logistics, LLC moves to compel arbitration of most of the claims 18 | brought by plaintiffs Antonia Vargas and Maria Barrera. As explained in this order, Capstone has 19 | shown Barrera agreed to arbitrate, but the parties have cited contradictory evidence about whether 20 | Vargas also agreed to arbitrate, so the court grants the motion in part and otherwise holds it in 21 | abeyance. 22 | I. BACKGROUND 23 Vargas and Barrerra claim Capstone violated California labor law. See generally Compl. 24 | 418, ECF No. 1-1. They allege Capstone did not allow them to take breaks, did not pay overtime 25 | wages, did not reimburse them for business expenses, did not take mandatory precautions against 26 | COVID-19, gave them inaccurate wage statements and delayed their final paychecks. See id. 27 | 4§§ 18-26. Vargas and Barrera originally filed this action in California Superior Court. They 28 | proposed to litigate both on behalf of a proposed class and as representatives under California’s
1 Private Attorneys General Act. See generally id. Capstone removed the case to this court under 2 the Class Action Fairness Act of 2005. See generally Not. Removal, ECF No. 1; 28 U.S.C. 3 § 1332(d). 4 After Capstone removed the case, it moved to compel arbitration of Barrera and Vargas’s 5 individual claims, to dismiss claims they were seeking to assert on behalf of a proposed class and 6 to stay their non-individual claims under the Private Attorneys General Act. See Mot. Compel at 7 i, ECF No. 7. According to Capstone’s human resources manager, Capstone has had a 8 “mandatory arbitration program” since long before Barrera and Vargas began working for the 9 company in 2022. See Dickinson Decl. ¶¶ 4–6, ECF No. 7-2. The arbitration program is spelled 10 out in the company’s employee manual, which was available online when Barrera and Vargas 11 started. See id. ¶¶ 6–9. 12 The company’s records show Barrera signed into its online system and acknowledged and 13 accepted the arbitration policy. See id. ¶¶ 9–19. The company does not have similar records for 14 Vargas. Although the company’s records show Vargas created a username and password and 15 began filling out some forms, those records do not include a confirmation showing she ever heard 16 about or saw the handbook or arbitration policy. See id. ¶¶ 20–22. The company relies on a 17 declaration by Vargas’s manager to fill this apparent gap. See generally Garcia Decl., ECF No. 18 7-1. According to the manager’s declaration, it was his practice to “complete a thorough 19 onboarding and orientation with each new associate.” Id. ¶ 7. At a trial, he would testify that he 20 went “page-by-page” through the handbook and arbitration policy on Vargas’s first day, which 21 took about “two hours.” Id. ¶¶ 8–12. Vargas disagrees. She also has submitted a declaration. 22 See generally Vargas Decl., ECF No. 17-1. She remembers spending only about five minutes 23 with her manager on her first day, not two hours. Id. ¶ 3. He told her what her salary would be 24 and asked for her social security number. Id. He did not explain she was agreeing to arbitration, 25 and he did not show her the handbook or even mention it. Id. ¶ 4. Before Capstone moved to 26 compel arbitration, she did not know about the arbitration policy, she never received a copy and 27 she did not know how to find it. Id. ¶ 7. 1 Despite this disagreement, there seems to be no question Capstone’s arbitration policy, if 2 enforced, would require Barrera and Vargas to submit the majority of their claims to individual 3 arbitration. By the terms of the arbitration agreement, employees “agree to use binding 4 arbitration, instead of going to court, as the sole and exclusive means to resolve any ‘Covered 5 Claims’ that arise or have arisen.” Arbitration Agreement ¶ 2, Dickinson Decl. Ex. C, ECF No. 6 7-2. “Covered Claims” include “any claim, dispute and/or controversy that [an employee] may 7 have against the Company,” including claims of “unpaid wages” and “any other similar federal, 8 state or local law or regulation which may apply to the parties’ employment relationship.” Id. ¶ 3. 9 The agreement also includes a class action waiver: “Covered Claims will be arbitrated only on an 10 individual basis.” Id. ¶ 5. The agreement “shall not be construed to allow or permit the 11 consolidation or joinder of other claims or controversies involving any other employees or 12 parties, or permit such claims or controversies to proceed as a class or collective action.” Id. And 13 by the terms of the agreement, employees agree continued employment “is deemed to be an 14 acceptance” of the arbitration agreement. Id. ¶ 2. 15 Barrera does not contest Capstone’s assertion she agreed to these terms. Only Vargas puts 16 forward any opposition to Capstone’s motion to compel arbitration. She contends Capstone 17 cannot compel her to arbitrate because she did not agree to arbitrate any claims. See generally 18 Opp’n, ECF No. 17. Briefing is now complete. See generally Reply, ECF No. 18. The court 19 submitted the matter without oral arguments. 20 II. DISCUSSION 21 The parties to a federal lawsuit “are not required to arbitrate their disagreements unless 22 they have agreed to do so.” Davis v. Nordstrom, Inc., 755 F.3d 1089, 1092 (9th Cir. 2014). 23 Contracts to arbitrate can be inferred from the circumstances and the parties’ actions, but a “clear 24 agreement” is necessary. Id. (quoting Avery v. Integrated Healthcare Holdings, Inc., 25 218 Cal. App. 4th 50, 59 (2013)). A clear agreement can be inferred from an employee’s 26 decision to continue working after receiving reasonable notice that the employer has made an 27 arbitration agreement part of its policy, as long as that agreement “does not interfere with vested 28 employee benefits.” Id. at 1093 (quoting Asmus v. Pac. Bell, 23 Cal. 4th 1, 11 (2000)). 1 If one party disputes another’s claim that they agreed to arbitrate, the Federal Arbitration 2 Act requires the district court to “hear the parties” and determine whether “the making of the 3 arbitration agreement” is “in issue.” 9 U.S.C. § 4. That is, the court decides whether there is a 4 “genuine dispute of material fact” under the standard of Federal Rule of Civil Procedure 56, 5 which governs motions for summary judgment. Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667, 6 670 (9th Cir. 2021). Under that rule, a dispute is “genuine” if “a reasonable jury could return a 7 verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A 8 fact is “material” if it “might affect the outcome of the suit under the governing law.” Id. If there 9 is a genuine dispute of material fact, the court “shall proceed summarily to the trial thereof.” 10 9 U.S.C. § 4. 11 Barrera’s agreement to arbitrate is not “in issue” under this standard. There is no genuine 12 dispute of material fact that she agreed to arbitrate her claims individually. She signed into 13 Capstone’s system and acknowledged the handbook and arbitration agreement, as summarized 14 above, and nothing suggests the arbitration agreement conflicted with any vested right she might 15 have had. 16 By contrast, the record includes conflicting evidence about whether Vargas agreed to 17 arbitrate her claims. There is no record of her acknowledging the policy through Capstone’s 18 online system, and as summarized above, she disputes her former manager’s assertions about a 19 two-hour meeting on her first day. Her dispute with Capstone is “genuine” and “material” under 20 Rule 56. If, on the one hand, a fact-finder credits the manager’s testimony, an arbitration 21 agreement could be inferred from Vargas’s decision to continue working. See Davis, 755 F.3d 22 at 1093. The opposite would be true if a fact-finder instead accepted Vargas’s version of events. 23 It is not enough that the policy and handbook were available to her; California law requires 24 “reasonable notice.” See, e.g., Cerletti v. Ecolab, Inc., No. 18-00008, 2018 WL 11471626, at *4 25 (N.D. Cal. Feb. 27, 2018) (finding no agreement given lack of notice or even receipt); Pearson v. 26 P.F. Chang’s China Bistro, Inc., No. 13-2009, 2015 WL 12910914, at *5–6 (S.D. Cal. Feb. 23, 27 2015) (reasoning similarly). 1 Capstone incorrectly dismisses Vargas’s declaration as “self-serving.” See Reply at 4. A 2 declaration is not objectionable simply because it is self-serving. See United States v. Shumway, 3 199 F.3d 1093, 1104 (9th Cir. 1999). A party has little reason to submit evidence that does not 4 serve its purposes. See id. Rejecting a claim merely because it is uncorroborated would amount 5 to an assessment of the declarant’s credibility, and credibility determinations are not provided for 6 by the Rule 56 standard. Anderson, 477 U.S. at 255. A court may disregard a declaration only if 7 it asserts conclusions rather than facts. Nigro v. Sears, Roebuck & Co., 784 F.3d 495, 497–98 8 (9th Cir. 2015). Vargas’s declaration does not assert conclusions. She simply tells a different 9 story than her manager does. 10 The cases Capstone cites do not lead the court to a different conclusion. See Reply at 4. 11 They exemplify the longstanding state-law contract rule that prevents people from avoiding 12 contracts by arguing they signed the contract without reading it. See Vega v. Tempoe, LLC, 13 No. 20-02322, 2021 WL 3615913, at *3 (C.D. Cal. Apr. 16, 2021) (applying California law); 14 Augustine v. TLC Resorts Vacation Club, LLC, No. 18- 01120, 2018 WL 3913923, at *5 (S.D. 15 Cal. Aug. 16, 2018) (applying Nevada law); Totten v. Kellogg Brown & Root, 152 F. Supp. 3d 16 1243, 1250 (C.D. Cal. 2016) (applying California law). Capstone has cited no evidence showing 17 Vargas signed the arbitration agreement, and it is unclear on this record whether she knew about 18 it before Capstone filed its current motion. 19 Finally, Capstone objects to Vargas’s declaration as irrelevant and prejudicial. See 20 generally Evid. Objs., ECF No. 20. Her descriptions of the meeting with her manager and 21 whether she knew about the handbook or arbitration policy are relevant under Rule 401. They 22 support her claim that she did not agree to arbitrate. See Fed. R. Evid. 401 (“Evidence is relevant 23 if: (a) it has any tendency to make a fact more or less probable than it would be without the 24 evidence; and (b) the fact is of consequence in determining the action.”). The court perceives no 25 prejudice under Rule 403 if it considers her declaration. And Capstone does not explain what 26 dangers or prejudices her declaration put in play, let alone why those dangers substantially 27 outweigh the strong probative value of that declaration. 1 III. CONCLUSION 2 Vargas has cited evidence to show “the making of the arbitration agreement” is “in issue” 3 under section 4 of the Federal Arbitration Act, but only with respect to her claims. There is no 4 dispute Barrera agreed to arbitrate her claims individually. 5 “[O]nce a district court concludes that there are genuine disputes of material fact as to 6 whether the parties formed an arbitration agreement, the court must proceed without delay to a 7 trial on arbitrability and hold any motion to compel arbitration in abeyance until the factual issues 8 have been resolved.” Hansen, 1 F. 4th at 672. The court therefore orders as follows: 9 The motion to compel arbitration is granted in part as to the claims by Maria 10 Barrera. She must pursue her claims individually in arbitration, including her 11 claims under the California Private Attorneys General Act. 12 The motion to compel arbitration otherwise remains pending and is held in 13 abeyance until the factual dispute above has been resolved. The parties shall file a 14 joint status report within twenty-one days providing proposed dates for trial and 15 clarifying whether they believe trial should be by jury or a bench proceeding. The 16 report shall include trial plans for both parties, identifying witnesses, exhibits and 17 time necessary. 18 Capstone’s request to stay the plaintiffs’ non-individual claims under the Private 19 Attorneys General Act is likewise held in abeyance. 20 IT IS SO ORDERED. 21 DATED: November 18, 2024.