Erwin v. ALDI Foods, Inc. ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 RICHARD ERWIN on behalf of himself No. 1:22-cv-01207-ADA-BAM and all others similarly situated, 12 Plaintiff, 13 ORDER GRANTING DEFENDANT’S v. UNOPPOSED MOTION TO COMPEL 14 ARBITRATION AND DISMISSING ALDI FOODS, INC., an Illinois THE ACTION WITHOUT PREJUDICE 15 corporation, and DOES 1 through 50, inclusive, (ECF No. 9) 16 Defendants. 17 18 This matter is before the Court on Defendant ALDI Foods, Inc.’s 1 motion to compel 19 arbitration. (ECF No. 9.) For the reasons explained below, the Court grants Defendant’s motion 20 and dismisses this action without prejudice. 21 BACKGROUND 22 A. Procedural History 23 On July 25, 2022, Plaintiff Richard Erwin filed a class action Complaint in the Superior 24 Court of California on behalf of himself and all others similarly situated against Defendant ALDI 25 Foods, Inc., alleging eight state law causes of action: (1) Failure to Pay Wages (Cal. Lab. Code §§ 26 27 1 Plaintiff incorrectly named Defendant; instead, ALDI Foods, Inc. is AI California, LLC. (ECF No. 1 at 2.) The sole member of AI California, LLC is ALDI, Inc. with its place of incorporation 28 in the State of Illinois; it owns 100% of Defendant. (Id. at 6-7.) 1 1924, 1199); (2) Failure to Provide Lawful Meal Periods Or Compensation in Lieu Thereof (Cal. 2 Lab. Code §§ 226.7, 512; IWC Wage Orders); (3) Failure to Provide Rest Periods Or Compensation 3 In Lieu Thereof (Cal. Lab. Code § 226.7; IWC Wage Orders); (4) Failure to Reimburse Employees 4 (Cal. Lab. Code § 2802); (5) Failure to Timely Pay Wages During Employment (Cal. Lab. Code § 5 204); (6) Failure to Timely Pay Wages Due at Termination (Cal. Lab. Code. §§ 201-03); (7) 6 Knowing and Intentional Failure to Comply with Itemized Employee Statement Provisions (Cal. 7 Lab. Code § 226(b)); and (8) Violation of Unfair Competition Law (Cal. Bus. & Prof. Code §§ 8 17200-08). (ECF No. 1 at 2.) Plaintiff seeks to represent a class of current and former California 9 employees of Defendant categorized as hourly, non-exempt employees. (Id. at 35.) 10 Defendant answered Plaintiff’s Complaint on September 20, 2022, with 28 defenses listing 11 “Arbitration” first and arguing Plaintiff’s “claims are barred by their contractual agreement to 12 arbitrate their individual claims,” pursuant to an agreement Plaintiff signed at the start of his 13 employment with Defendant. (ECF No. 1 at 2, 50.) Defendant then removed to this Court on 14 September 22, 2022. (ECF No. 1 at 2.) On October 28, 2022, Defendant filed this motion to 15 compel Plaintiff to arbitrate his claims, requesting dismissal of Plaintiff’s action without prejudice. 16 (ECF No. 9.) On November 14, 2022, Plaintiff filed a Statement of Non-Opposition to Defendant’s 17 motion, conceding, “Plaintiff’s counsel has reviewed Defendant’s presented arbitration agreement 18 and finds that the agreement covers the claims present in Plaintiff’s operative complaint” and 19 agreeing to Defendant’s “requested relief.” (ECF No. 11 at 2.)2 20 B. Factual Background 21 Defendant employed Plaintiff between approximately March 2020 to July 25, 2021, as a 22 non-exempt Cashier and Stocking employee. (ECF No. 1 at 34.) His duties included, but were not 23 limited to, working on the cash register and stocking shelves with inventory. (Id.) Plaintiff alleges 24 Defendant implemented policies and procedures that precluded Plaintiff from being paid minimum 25 2 In its Statement of Non-Opposition, Plaintiff misstates Defendant’s requested relief as “a stay of 26 this matter as presented in [Defendant’s] Motion to Compel Arbitration.” (ECF No. 11 at 2.) 27 Defendant, in an attempt to clarify, filed a Statement of Non-Opposition highlighting Plaintiff’s misstatement. (ECF No. 12 at 2.) The Court construes Plaintiff’s statement as reflecting non- 28 opposition to Defendant’s repeatedly stated request for dismissal without prejudice. 1 wage for all hours worked, such as, requiring Plaintiff and non-exempt employees to undergo 2 COVID-19-related temperature checks prior to clocking in. (Id.) Plaintiff alleges he and other 3 non-exempt employees were frequently required to work without 10-minute breaks every four 4 hours, and without 30-minute lunch breaks after five hours due to a lack of staffing and heavy 5 workload. (Id.) Defendant did not compensate Plaintiff for its failure to provide these rest breaks 6 and failed to provide itemized wage statements documenting employees’ hours. (Id. at 34-35.) 7 Plaintiff alleges Defendant failed to reimburse him and other non-exempt employees for all 8 business expenses necessarily incurred, such as phone usage and purchasing both box-cutters and 9 his uniform for work. (ECF No. 1 at 35, 41.) On the day Defendant terminated Plaintiff, Defendant 10 did not provide Plaintiff with his final paycheck. (Id.) 11 C. The Arbitration Agreement 12 Defendant’s motion to compel arbitration relies on the arbitration agreement signed by the 13 parties. (ECF No. 9-3 at 27.) The Agreement provides that “Company and Employee agree that 14 any employment-related legal claims or controversies (‘Claims’) that Employee may have against 15 the Company, or that the Company may have against Employee, must be resolved by arbitration 16 instead of the courts, and the parties mutually waive their right to a trial before a judge or jury in 17 federal or state court in favor of arbitration under this Agreement” (id. at 7) and that “arbitration 18 shall be final and binding upon the parties” (id. at 9). The Agreement requires all Claims only be 19 brought in “the party’s individual capacity, and not as a plaintiff or class member in any class, 20 collective[,] or representative proceeding . . . except that if a waiver of representative claims is not 21 permissible by law,” such as Private Attorney General Actions in the State of California. (Id. at 7.) 22 LEGAL STANDARDS 23 A. Motion to Compel Arbitration 24 The Federal Arbitration Act (FAA) governs arbitration agreements. 9 U.S.C. § 2. The FAA 25 affords parties the right to obtain an order directing arbitration proceed in the manner provided for 26 in the agreement. 9 U.S.C. § 4. To decide on a motion to compel arbitration, the Court must 27 determine: “(1) whether a valid agreement to arbitrate exists [within the contract] and, if it does, 28 (2) whether the agreement encompasses the dispute at issue.” Boardman v. Pacific Seafood Group, 1 822 F.3d 1011, 1017 (9th Cir. 2016) (Boardman) (brackets in original)). Given the “emphatic 2 federal policy in favor of arbitral dispute resolution,” Mitsubishi Motors Corp. v. Soler Chrysler– 3 Plymouth, 473 U.S. 614, 631 (1985), “‘doubts concerning the scope of arbitrable issues should be 4 resolved in favor of arbitration, whether the problem at hand is the construction of the contract 5 language itself or an allegation of waiver, delay, or a like defense to arbitrability.’” Id. at 6 626 (quoting Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983)). 7 B. Motion to Stay 8 Under Section 3 of the FAA, a court, “upon being satisfied that the issue involved . . . is 9 referable to arbitration, shall on application of one of the parties stay the trial of the action until 10 such arbitration has been had in accordance with the terms of the agreement.” 9 U.S.C. § 3. And 11 yet, the Court has discretion to dismiss an action it has compelled to arbitration under Rule 12(b)(6) 12 if it finds all the claims are arbitrable. See Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 13 368 F.3d 1053, 1060 (9th Cir. 2004) (Thinket). 14 ANALYSIS 15 A. The Court Grants Defendant’s Unopposed Motion to Compel Arbitration 16 Defendant moves to compel Plaintiff to “arbitrate his claims in binding arbitration” arguing 17 that the “valid and enforceable written Agreement to Arbitrate” executed by Plaintiff and Defendant 18 “covers all of the claims asserted in this lawsuit.” (ECF No. 9-1 at 7.) Defendant states the 19 Agreement “contains a class action waiver that requires Plaintiff to arbitrate his claims on an 20 individual basis.” (Id. (emphasis in original).) Plaintiff filed a Statement of Non-Opposition to 21 Defendant’s motion; he does not oppose the Court ordering his claims to arbitration because his 22 “counsel has reviewed Defendant’s presented arbitration agreement and finds that the agreement 23 covers the claims present in Plaintiff’s operative complaint.” (ECF No. 11 at 2.) 24 The Court has reviewed the Agreement and concludes that Defendant has demonstrated that 25 a valid agreement to arbitrate exists and that it covers the dispute at issue. See Boardman, 822 F.3d 26 at 1017. Accordingly, the Court grants Defendant’s motion to compel arbitration. 27 B. The Court Dismisses the Action Without Prejudice 28 Defendant requests that the Court, after granting its motion to compel arbitration, dismiss 1 | this action without prejudice. (ECF No. 9.) Plaintiff filed a Statement of Non-Opposition agreeing 2 | “to Defendant ALDI FOODS, INC.’s requested relief.” (ECF No. 11 at 2.) Because all of 3 | Plaintiff's claims are subject to arbitration under the parties’ Agreement, the Court can discern no 4 | reason to stay this action; further, Plaintiff has not provided the Court with any reason why it should 5 | doso. See Thinket, 368 F.3d at 1060. 6 Thus, the Court dismisses this action without prejudice. 7 CONCLUSION 8 Accordingly: 9 1. Defendant’s motion to compel arbitration (ECF No. 9) is granted; 10 2. The action is dismissed without prejudice; and 11 3. The Clerk of the Court is directed to close this case. 12 13 14 | IIS SO ORDERED. 15 Dated: _ January 11, 2023 6 UNITED f£TATES DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 27 28