Case Number: KC070483 Hearing Date: October 19, 2018 Dept: J

Re: Dorothy Martinez v. Ovations Fanfare, L.P., etc., et al. (KC070483)

PETITION TO COMPEL ARBITRATION AND TO STAY THE PROCEEDINGS

Moving Party: Defendant Cornucopia Foods, LLC dba The Finish Line Sports & Grill

Respondent: Plaintiff Dorothy Martinez; “Response” by Defendants Ovations Fanfare, L.P. dba Spectra Food Services & Hospitality and Adam Avalos

POS: Moving OK; Opposing and Response served by regular mail contrary to CCP § 1005(c); Reply OK

Plaintiff alleges that defendants failed to provide her with meal and rest periods during her work shifts and have failed to compensate her for missed meal and rest periods. Plaintiff further alleges that defendants have converted her tips. Plaintiff also alleges that she has been subjected to a hostile work environment. The complaint, filed 7/24/18, asserts causes of action against Defendants Ovations Fanfare, L.P. dba Spectra Food Services and Hospitality, Spectra by Comcast Spectacor (“Spectra by Comcast”), Cornucopia Foods, LLC dba The Finish Line Sports & Grill, Adam Avalos and Does 1-100 for:

1. Failure to Provide Meal and Rest Periods in Violation of California Labor Code §§ 226.7 and 512;

2. Conversion; and

3. Hostile Work Environment

On 10/1/18, Spectra by Comcast’s default was entered. A Case Management Conference is set for 12/11/18.

Defendant Cornucopia Foods, LLC dba The Finish Line Sports & Grill (“Cornucopia”) moves the court for an order, per 9 U.S.C. § 1 et seq. and CCP §§ 1281.2 and 1281.4, compelling Plaintiff Dorothy Martinez (“plaintiff”) to submit her complaint against it to binding arbitration and staying further proceedings in this action, on the basis that plaintiff entered into an “Employee Acknowledgment and Agreement” with it, which included an arbitration provision.

REQUEST FOR JUDICIAL NOTICE:

Cornucopia’s request for judicial notice is granted.

EVIDENTIARY OBJECTIONS:

Plaintiff’s evidentiary objection the Declaration of Geneva Moody is overruled.

Defendant’s objections to the Declaration of Dorothy Martinez:

1. Sustained as to the language following “January 6, 2014”

2-3. Overruled

4-7. Sustained

Section 2 of the Federal Arbitration Act (“FAA”) provides in relevant part that “[a] written provision in…a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract…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.

“A party seeking to enforce an arbitration agreement has the burden of showing FAA preemption.” Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 687. “A petitioner seeking an order to compel arbitration must show that the subject matter of the agreement involves interstate commerce.” Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 657. The United States Supreme Court interprets the term “involving commerce” in the FAA as “the functional equivalent of the more familiar term ‘affecting commerce’—words of art that ordinarily signal the broadest permissible exercise of Congress’ Commerce Clause power.” Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56 (citation omitted). Thus, “[b]ecause the statute provides for ‘the enforcement of arbitration agreements within the full reach of the Commerce Clause’ [Citation omitted], it is perfectly clear that the FAA encompasses a wider range of transactions than those actually ‘in commerce’—that is, ‘within the flow of interstate commerce’ [Citation omitted].” Id.

To support its claim that the nature of plaintiff’s employment was interstate, Cornucopia offers the declaration of Geneva Moody (“Moody”), its Human Resources Manager. Moody states that Cornucopia managed the food and beverage services available to visitors of the Los Angeles County Fairplex (“Fairplex”) from 4/1/04-10/1/16. (Moody Decl., ¶ 5). Moody further states that visitors to the Fairplex come from states all throughout the country. (Id.). Cornucopia employed plaintiff as a server at the Finish Line Sports & Grill from approximately 10/19/07 through 10/1/16, when the management of food and beverage services was transferred from Cornucopia to Spectra by Comcast Spectacor. (Id., ¶ 6). As a server, plaintiff’s job duties included, but were not limited to, taking orders of food and beverages, and serving food and beverages to restaurant patrons. (Id.). Plaintiff further admits in her own complaint that patrons paid by use of a credit card and/or debit card, which would entail the use of interstate commerce and communication in order for the credit cards to communicate with national banks and fund the transactions. (See Complaint, ¶ 15). Plaintiff specifically claims that she should have personally benefitted from these interstate credit/debit card transactions, alleging that “[t]ips are paid in two ways to Plaintiff…[t]he second way the tips are paid is by credit card and/or debit card (hereinafter ‘credit card’). All tips by credit card that were earned by Plaintiff have not been paid to her.” (Id.). In addition, the “Employee Acknowledgment and Agreement” (“Agreement”) provides that it is controlled by the FAA. Since the Agreement is “a contract evidencing a transaction involving commerce,” it is subject to the FAA. 9 U.S.C. § 2.

Once the court concludes that an arbitration agreement falls within the scope of the FAA, it must determine whether the agreement is valid based on general state law principles regarding contract formation, revocation, and enforcement. See Cione v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625, 634. In doing so, courts must give “due regard to the federal policy favoring arbitration.” Volt Information Sciences, Inc. v. Board of Trustees (1989) 489 U.S. 468, 476. “The court’s role under the Act 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 Systems, Inc. (2000) 207 F.3d 1126, 1130. Under California law, the essential elements for a contract are “(1) parties capable of contracting; (2) their consent; (3) a lawful object; and (4) a sufficient cause or consideration.’” Marshall & Co. v. Weisel (1966) 242 Cal.App.2d 191, 196. A party’s acceptance of a contract may be express or implied. See Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.

Cornucopia contends that plaintiff agreed to be bound by an “Employee Acknowledgment and Agreement” (“Agreement”) via her execution of same on or about 5/5/08 and again on or about 7/27/11. The Agreement (Moody Decl., ¶¶ 7 & 8, Exhs. A & B) provides, in pertinent part, as follows:

“I further agree and acknowledge that the Company and I will utilize binding arbitration to resolve all disputes that may arise out of the employment context. Both the Company and I agree that any claim, dispute, and/or controversy either I may have against the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans) or the Company may have against me, arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Company shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act, in conformity with the procedures of the California Arbitration Act (Cal. Code Civ. Proc. Sec 1280 et seq., including section 1283.05 and all of the Act’s other mandatory and permissive rights to discovery). Included within the scope of this Agreement are all disputes, whether based on tort, contract, statute (including, but not limited to, any claims of discrimination and harassment, whether they be based on the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, as amended, or any other state or federal law or regulation), equitable law, or otherwise, with exception of claims arising under the National Labor Relations Act which are brought before the National Labor Relations Board, claims for medical and disability benefits under the California Workers’ Compensation Act, Employment Development Department claims, or as otherwise required by state or federal law. However, nothing herein shall prevent me from filing and pursuing proceedings before the California Department of Fair Employment and Housing, or the United States Equal Employment Opportunity Commission (although if I choose to pursue a claim following the exhaustion of such administrative remedies, that claim would be subject to the provisions of this Agreement). Further, this Agreement shall not prevent either me or the Company from obtaining provisional remedies to the extent permitted by Code of Civil Procedure Section 1281.8 either before the commencement of or during the arbitration process. In addition to any other requirements imposed by law, the arbitrator selected shall be a retired California Superior Court Judge, or otherwise qualified individual to whom the parties mutually agree, and shall be subject to disqualification on the same grounds as would apply to a judge of such court. All rules of pleading (including the right of demurrer), all rules of evidence, all rights to resolution of the dispute by means of motions for summary judgment, judgment on the pleadings, and judgment under Code of Civil Procedure Section 631.8 shall apply and be observed. Resolution of the dispute shall be based solely upon the law governing the claims and defenses pleaded, and the arbitrator may not invoke any basis (including but not limited to, notions of ‘just cause’) other than such controlling law…Awards shall include the arbitrator’s written reasoned opinion. I understand and agree to this binding arbitration provision, and both I and the Company given up our right to trial by jury or any claim I or the Company may have against each other…” (Id.).

Plaintiff does not appear to challenge Cornucopia’s contention that all of plaintiff’s claims (i.e., for Failure to Provide Meal and Rest Periods in Violation of California Labor Code § 226.7 and § 512, Conversion and Hostile Work Environment, respectively) pertain to her employment and thus expressly fall within the terms of the arbitration provision; rather, plaintiff appears to contend that there is no agreement to arbitrate due to a lack of consent. Plaintiff, however, does not contend that she did not receive and sign the Agreement — in fact, she admits that she signed the first agreement on 5/5/08 and the second agreement on 7/27/11. (Plaintiff Decl., ¶ 2). Plaintiff contends that Moody’s declaration does not provide adequate foundation for the Agreement, despite the fact that plaintiff admits that she signed the Agreement. Moody’s declaration provides adequate foundation in explaining that she had personal knowledge of Cornucopia’s business operations, that she is familiar with the policies and practices regarding employees’ execution of employment agreements, including arbitration agreements, and that she has access to Cornucopia’s employee personnel files and payroll information. (Moody Decl., ¶¶ 3 & 4).

Plaintiff does not argue that she did not have an opportunity to review the terms of the Agreement during her employment, nor that she in any way opposed the Agreement; rather, she contends that she “signed a lot of things in July of 2011” and apparently did not read them closely. (Plaintiff’s Decl., ¶ 4). Plaintiff, then, has submitted no admissible evidence to rebut the fact that she received the Agreement from Cornucopia and executed it. Additionally, plaintiff continued to work for Conucopia until the management of the restaurant transferred in October 2016.

Plaintiff further asserts that the Agreement is not valid because Cornucopia did not specifically agree to arbitrate. The Agreement dated 7/27/11, however, was placed on Cornucopia letterhead, and states that “[t]his will acknowledge that I have received my copy of the CORNUCOPIA FOODS, LLC Employee Handbook and that I will familiarize myself with its contents.” (Moody Decl., ¶ 8, Exh. B). The Agreement next reads, “I understand that this handbook represents the current policies, regulations, and benefits, and that except for employment at-will status and the Arbitration Agreement, any and all policies or practices can be changed at any time by the Company.” (Id.) A plain reading of the Agreement is unambiguous in that the term “Company” refers to Cornucopia. The fact that Cornucopia did not sign the Agreement, moreover, is not fatal. The Second District, Division Three, Court of Appeal in Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 398, determined that the defendant’s intent to be bound by its arbitration clause in its employment application, even though it did not physically sign the document, was “evidenced by the fact that the employment application was printed on its company letterhead and the arbitration clause declared [the defendant’s] intent to be bound thereby.” Here, as in Cruise, the first page of the Agreement plaintiff signed has Cornucopia’s letterhead printed on the top and provides that “[b]oth the Company and I agree that any claim, dispute, and/or controversy either I may have against the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans) or the Company may have against me, arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Company shall be submitted to and determined exclusively by binding arbitration…” (Emphasis added). Plaintiff’s argument is thus not well-taken.

Plaintiff further asserts that the Agreement is unconscionable. “Both procedural and substantive unconscionability must be present before a contract or term will be deemed unconscionable. Both, however, need not be present to the same degree. A sliding scale is applied so that ‘”’the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.’” [Citations.]’” Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 178 (citations omitted).

“’Procedural unconscionability’ concerns the manner in which the contract was negotiated and the circumstances of the parties at that time. It focuses on factors of oppression and surprise. (Ibid.) The oppression component arises from an inequality of bargaining power of the parties to the contract and an absence of real negotiation or a meaningful choice on the part of the weaker party.” Kinney v. United Healthcare Services, Inc. (1999) 70 Cal.App.4th 1322, 1329 (citation omitted.).

Plaintiff contends that the provision is a contract of adhesion, which was presented to her on a “take-it-or-leave-it basis.” Procedural unconscionability is generally satisfied if the agreement constitutes a contract of adhesion. Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal.App.4th 1267, 1280. However, “cases uniformly agree that a compulsory predispute arbitration agreement is not rendered unenforceable just because it is required as a condition of employment or offered on a ‘take it or leave it’ basis.” Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105, 1127. “In fact, where the arbitration provisions presented in a contract of adhesion are highlighted for the employee, any procedural unconscionability is ‘limited.’” Serafin, supra, 235 Cal.App.4th at 179. Plaintiff, moreover, offers no evidence that she was under any duress, economic or otherwise, or that there were any time constraints placed on her with respect to reading, examining, or signing “lot of things” which included the Agreement in July of 2011. She mentions nothing about the circumstances surrounding her execution of the Agreement on or about 5/5/08. Plaintiff further contends that Cornucopia’s failure to provide a copy of the applicable arbitration rules supports a finding of procedural unconscionability. However, the Agreement does not reference any rules from a particular alternate dispute provider. At best, then, Plaintiff has made a limited showing of procedural unconscionability.

Substantive unconscionability “focuses on the terms of the agreement and whether those terms are ‘so one-sided as to “shock the conscience.” Kinney, supra, 70 Cal.App.4th at 1330 (emphasis theirs; citations omitted). “ ‘Substantive unconscionability “may take various forms,” but typically is found in the employment context when the arbitration agreement is ‘one-sided’ in favor of the employer without sufficient justification, for example, when “the employee’s claims against the employer, but not the employer’s claims against the employee, are subject to arbitration.” [Citations.]’ (Id. at p. 1469.).” Serafin, supra, 235 Cal.App.4th at 177.

Plaintiff contends that the provision is substantively unconscionable because the Agreement only binds “the Company,” which is not defined. This argument is rejected for the reasons discussed above.

Finally, plaintiff contends that arbitration should be denied on the basis of CCP § 1281.2(c), which reads: “[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:…(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact….”

It appears, however, that there are two specific and discrete employment periods involved here, the first from pre-10/1/16, when plaintiff was employed by Cornucopia, and the second from post-10/1/16, when plaintiff was not employed by Cornucopia. There is no concern of inconsistency as to liability against either Cornucopia or the other entity defendants because the employment periods did not overlap —whether Cornucopia is responsible for a failure to provide meal and rest periods, failure to pay tips, or for discrimination or harassment are separate and distinct issues from whether the other entity defendants are responsible for same. Furthermore, Ovations Fanfare, L.P. dba Spectra Food Services and Hospitality and Adam Avalos are expressly not opposed to the granting of this motion.

Accordingly, the motion is granted. The court will set a status conference regarding the arbitration in approximately six months. The court determines that a stay of the remainder of the action is not warranted under CCP § 1281.2(c) pending the completion of arbitration.

The court notes that this instant case and Case No. KC070304, Sacks v. Ovations Fanfare, L.P., et al. may be related. The court directs counsel for plaintiff to file a Notice of Related Case in both actions pursuant to California Rules of Court Rule 3.300 forthwith.