Acevedo v. Russell Cellular, Inc.

MARCO ACEVEDO, Plaintiff, v. RUSSELL CELLULAR, INC., Defendant.

Case No. 1:20-cv-01440-NONE-SAB

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

March 16, 2021

FINDINGS AND RECOMMENDATIONS RECOMMENDING GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

(ECF Nos. 7, 9, 10, 13)

OBJECTIONS DUE WITHIN FOURTEEN DAYS

Currently before the Court is Russell Cellular, Inc.'s motion to compel arbitration and stay this action which has been referred to the United Sates magistrate judge pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302. (ECF No. 11.) The Court, having reviewed the record, finds this matter suitable for decision without oral argument. See Local Rule 230(g).

I.BACKGROUND

Marco Acevedo ("Plaintiff") began working for Russell Cellular, Inc. ("Defendant") around November 11, 2019. (Decl. of Robert Lister ("Lister Decl.") ¶ 6, ECF No. 7-3.) In connection with his employment, Plaintiff electronically signed a Dispute Resolution/Binding Arbitration Agreement. (Id., ¶ 7.) The arbitration agreement provided,

In order to obtain an expeditious resolution of any disputes between Employee and Employer and to avoid the costly expense and lengthy delays typically associated with court actions, the undersigned Employee and the Company agree to submit (with the exceptions noted in section 1(C) of this Agreement) any and all claims, disputes or controversies between them relating to employee's employment, wages, benefits, compensation or any other claim arising from Employee's hiring by, employment with, or the termination of Employee's employment with the Company to final and binding arbitration before a neutral arbitrator, and not to any court or a trial by jury or any other forum, regardless of whether these claims or controversies are found in contract or tort (including personal injury) or arise under statute.

(Dispute Resolution/Binding Arbitration Agreement ("Agreement"), ¶ 1, ECF No. 7-3 at 7.¹) The Agreement included a nonexclusive list of covered claims which covers, as relevant here, claims under the Fair Housing and Employment Act ("FEHA"), California Labor Code, and any other federal, state or local laws, regulations, ordinances or constitutions relating to employment rights, benefits and obligations or discrimination or harassment and claims of wrongful termination or discharge. (Id., ¶ 1(B)(1)(3).)

The Agreement also provides that the execution of the Agreement is voluntary.

Employee understands that he or she would not be hired by the employer or be able to continue employment with employer if he or she did not sign this agreement.

The parties indicated below have carefully read this agreement in its entirety and fully understand its contents. Employee voluntarily enters into this agreement without reliance on any provisions of representations by employer other than those contained in this agreement. The parties understand that by entering into this agreement, they agree to and do hereby waive the right to have a court or jury decide disputes between them. The parties also understand that by entering into this agreement, they agree to the terms of Section 3 herein "Class Action Waiver."

Each party agrees to the use of Electronic Signatures and agrees that the Electronic Signatures of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. "Electronic signature" means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record.

By Employee's signature below, Employee affirms that he/she understands English and that if he/she does not, Employee affirms that he/she has had the opportunity to have someone that does understand English read and explain this document to Employee prior to signing it.

(Id., ¶ 11.) The Agreement contains Plaintiff's electronic signature, dated November 6, 2019 at 20:36:28 p.m. (Id., p. 13.) There is also an Acknowlegement of Receipt of Electronic Signature Policy and Authorization to Use Electronic Signature that was electronically signed by Plaintiff on this same date at 21:28:40. (ECF No. 7-3 at 15.)

Plaintiff's employment with Defendant ended around June 1, 2020. (Lister Decl., ¶ 6.)

On September 8, 2020, Plaintiff filed this action alleging violations of the FEHA, Labor Code, and wrongful termination in violation of public policy in the Superior Court for the State of California, County of Kings. (ECF No. 1-3.) On October 8, 2020, Defendant removed this matter to the Eastern District of California. (ECF No. 1.)

On October 28, 2020, Defendant filed a motion to compel arbitration and stay proceedings this action. (ECF No. 7.) On November 10, 2020, Plaintiff filed an opposition to the motion. (ECF No. 9.) Defendant filed a reply on November 17, 2020. (ECF No. 10.) On February 25, 2021, the matter was referred to the magistrate judge for preparation of findings and recommendations. (ECF No. 11.) On March 5, 2021, an order issued and Defendant was ordered to file a declaration in support of the motion to arbitrate within seven days. (ECF No. 12.) On March 12, 2021, Defendant filed the supplemental declaration of Shaneque Watson-Dawkins in support of the motion to compel arbitration.² (ECF No. 13.)

II.LEGAL STANDARD

In 1925 the Federal Arbitration Act ("FAA") was enacted in response to judicial hostility to arbitration agreements. AT&T Mobility LLC v. Concepcion (Concepcion), 563 U.S. 333, 339 (2011). The primary provision of the FAA provides that a contract which evidences an intent to settle a controversy by arbitration "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in law for the revocation of any contract." Concepcion, 563 U.S. at 339 (quoting 9 U.S.C. § 2). The Supreme Court has found that "Section 2 is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any statesubstantive or procedural policies to the contrary[,]" and the effect is to create a body of federal substantive law of arbitrability. Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983). The FAA places arbitration agreements on an equal footing with other contracts and requires the court to enforce such an agreement according to its terms. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010). "A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4.

The court's role in deciding whether a dispute is arbitrable, is "limited to determining (1) whether a valid agreement to arbitrate exists; and if it does (2) whether agreement encompasses the dispute at issue." Chiron Corp. v. Ortho Diagnostic Sys., 207 F.3d 1126, 1130 (9th Cir. 2000)). If the party seeking to compel arbitration establishes these two factors then the court must compel arbitration. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) ("By its terms, the Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.") "To determine whether the parties formed an agreement to arbitrate, courts "apply ordinary state-law principles that govern the formation of contracts." Int'l Bhd. of Teamsters v. NASA Servs., Inc., 957 F.3d 1038, 1042 (9th Cir. 2020) (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). Questions of arbitrability are to "be addressed with a healthy regard for the federal policy favoring arbitration. . . . The Arbitration Act establishes that, as a matter of federal law, 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." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-27 (1985) (quoting Moses H. Cone Memorial Hospital, 460 U.S. at 24-25).

Under California law, "[t]he party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability." Pinnacle Museum Tower Assn. v. PinnacleMkt. Dev. (US), LLC, 55 Cal.4th 223, 236 (2012). "[T]he party seeking to compel arbitration, has the burden of proving the existence of an agreement to arbitrate by a preponderance of the evidence." Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 (9th Cir. 2014); Rejuso v. Brookdale Senior Living Communities, Inc., No. CV175227DMGRAOX, 2018 WL 6174764, at *4 (C.D. Cal. June 5, 2018).

The Court may consider evidence outside the pleadings on a motion to compel arbitration. Manuwal v. BMW of N. Am., LLC, 484 F.Supp.3d 862, 865 n.1 (C.D. Cal. 2020); see also Arredondo v. Sw. & Pac. Specialty Fin., Inc., No. 1:18-CV-01737-DAD-SKO, 2019 WL 4596776, at *4-5 (E.D. Cal. Sept. 23, 2019) (considering evidence presented by the parties in motion to compel arbitration); see also Hansen v. Rock Holdings, Inc., 434 F.Supp.3d 818, 824 (E.D. Cal. 2020) (considering motion to compel arbitration under standard similar to Federal Rule of Civil Procedure 56. "The party opposing arbitration receives the benefit of any reasonable doubts and the court draws reasonable inferences in that party's favor. Only when no genuine disputes of material fact surround the arbitration agreement's existence may the court compel arbitration.").

III.DISCUSSION

Defendant contends that, as part of his employment, Plaintiff entered into a valid arbitration agreement. Defendant argues that Plaintiff had the...