Zenelaj v. Handybook Inc.

82 F. Supp. 3d 968, 2015 U.S. Dist. LEXIS 26068, 2015 WL 971320
CourtDistrict Court, N.D. California
DecidedMarch 3, 2015
DocketCase No. 14-cv-05449-TEH
StatusPublished
Cited by14 cases

This text of 82 F. Supp. 3d 968 (Zenelaj v. Handybook Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zenelaj v. Handybook Inc., 82 F. Supp. 3d 968, 2015 U.S. Dist. LEXIS 26068, 2015 WL 971320 (N.D. Cal. 2015).

Opinion

ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION

THELTON E. HENDERSON, District Judge

This matter is before the Court on Defendant’s motion to compel the arbitration of Plaintiffs’ complaint. After carefully considering the arguments presented in the Parties’ written and oral submissions, Defendant’s motion to compel arbitration is hereby GRANTED, for the reasons set forth below.

BACKGROUND

Defendant Handybook is a technology company that offers an online platform through which customers in need of cleaning services can connect to independent cleaning professionals. Plaintiffs Vilma and Greta Zenelaj are independent cleaning professionals and users of this platform that have filed a class action lawsuit alleging that cleaners using the platform are misclassified as independent contractors, unlawfully denying them access to the employment benefits and protections required by California law. Oct. 30, 2014 Compl. (Docket No. 1-1). As a result of this misclassification, Plaintiffs allege that Defendant failed to pay overtime and minimum wages, reimburse required business expenses, provide meal periods and rest periods, furnish accurate itemized wage statements, pay earned wages upon discharge, and remit gratuities. Plaintiffs additionally allege that Defendant engaged in unfair business practices. Finally, the Complaint seeks penalties under the Private Attorneys General Act (“PAGA”) for violations of the California Labor Code.

On December 15, 2014, Defendant removed this action to federal court based on diversity jurisdiction. (Docket No. 1). On December 22, 2014, Defendant filed the present motion to compel arbitration of Plaintiffs’ claims. (Docket No. 8). Plaintiffs responded (Docket No. 16), and Defendant timely replied (Docket No. 17). On February 23, 2015, the Court heard oral argument on Defendant’s motion.

LEGAL STANDARD

The Federal Arbitration Act (“FAA”) applies to arbitration agreements in any contract affecting interstate commerce. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001); 9 U.S.C. § 2. Section 4 of the FAA ensures that “private agreements to arbitrate are enforced according to their terms.” Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989). Accordingly, a party to an arbitration agreement can petition a United States District Court for an order directing that “arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. In addition, the FAA contains a mandatory stay provision. Id. § 3.

Under the FAA, arbitration agreements “shall be valid, irrevocable, and enforceable save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “[T]he FAA’s purpose is to give preference (instead of mere equality) to arbitration provisions.” Mortensen v. Bresnan Communications, LLC, 722 F.3d 1151, 1160 (9th Cir.2013). Nonetheless, arbitration “is a matter of consent, not coercion.” Volt, 489 U.S. at 479, 109 S.Ct. 1248. In accordance with this principle, the Supreme Court has held that parties may agree to limit the issues subject to arbitration, and to arbitrate according to specific rules. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985); Volt, 489 U.S. at 479, 109 S.Ct. 1248.

[971]*971“[T]he party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) (internal citations omitted). A court must defer to arbitration “unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute,” and “doubts should be resolved in favor of coverage.” AT & T Tech., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986).

DISCUSSION

Plaintiffs argue that the arbitration provision of the Parties’ Agreement is unconscionable and cannot be enforced. Opp’n at 9-23. Plaintiffs further argue that even if the arbitration provision is valid, their employment misclassification claims are not covered by the provision because they do not “relate to” the Agreement. Id. at 3-6.

Conversely, Defendant contends that this Court cannot decide whether the arbitration provision in this case is unconscionable or applicable, because the arbitration provision delegates those threshold issues to an arbitrator. Mot. at 7. In light of prevailing case law, this Court is obligated to agree. Consequently, the Court need only determine whether Defendant’s assertion of arbitrability is “wholly groundless.” Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1371 (Fed.Cir.2006) (applying Ninth Circuit law). The Court finds that it is not. However, the Court also finds that the Agreement’s waiver of Plaintiffs’ representative PAGA claims is invalid under state law, although an arbitrator must determine the proper forum in which those representative claims should proceed.

I. The Scope, Validity, and Application of the Arbitration Provision Must Be Decided by the Arbitrator.

Generally, in deciding whether to compel arbitration, a court must determine two “gateway” issues: (1) whether there is an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute. Howsam v. Dean Witter Reynolds, 537 U.S. 79, 84, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002). However, these gateway issues can be expressly delegated to the arbitrator where “the parties clearly and unmistakably provide otherwise.” AT & T, 475 U.S. at 649, 106 S.Ct. 1415 (emphasis added); see also First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995) (“Courts should not assume that the parties agreed to arbitrate arbitrability unless there is ‘clea[r] and unmistakable]’ evidence that they did so.”). In cases where the parties “clearly and unmistakably intend to delegate the power to decide arbitrability to an arbitrator,” a court’s inquiry is “limited ... [to] whether the assertion of arbitrability is ‘wholly groundless.’ ” Qualcomm Inc. v. Nokia Corp.,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Dodev v. Citibank N.A.
D. Arizona, 2025
Keeton v. Tesla
California Court of Appeal, 2024
SteppeChange LLC v. Veon Ltd.
354 F. Supp. 3d 1033 (N.D. California, 2018)
Smythe v. Uber Technologies, Inc.
California Court of Appeal, 2018
Smythe v. Uber Techs., Inc.
233 Cal. Rptr. 3d 895 (California Court of Appeals, 5th District, 2018)
Crooks v. Wells Fargo Bank, N.A.
312 F. Supp. 3d 932 (S.D. California, 2018)
State ex rel. Pinkerton v. Fahnestock
531 S.W.3d 36 (Supreme Court of Missouri, 2017)
Cordas v. Uber Technologies, Inc.
228 F. Supp. 3d 985 (N.D. California, 2017)
Brinkley v. Monterey Financial Services, Inc.
242 Cal. App. 4th 294 (California Court of Appeal, 2015)
Brinkley v. Monterey Fin. Servs., Inc.
196 Cal. Rptr. 3d 1 (California Court of Appeals, 4th District, 2015)
Levin v. Caviar, Inc.
146 F. Supp. 3d 1146 (N.D. California, 2015)
Mohamed v. Uber Technologies, Inc.
109 F. Supp. 3d 1185 (N.D. California, 2015)
Nanavati v. Adecco USA, Inc.
99 F. Supp. 3d 1072 (N.D. California, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
82 F. Supp. 3d 968, 2015 U.S. Dist. LEXIS 26068, 2015 WL 971320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zenelaj-v-handybook-inc-cand-2015.