Garcia v. Expert Staffing West ( 2021 )

Filed 12/29/21
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
ROSEANA GARCIA, 2d Civ. No. B307371
(Super. Ct. No. 56-2018-
Plaintiff and Respondent, 00506302-CU-OE-VTA)
(Ventura County)
v.
EXPERT STAFFING WEST et
al.,
Defendants and Appellants.
Respondent Roseana Garcia had an employment
agreement with her former employers, appellants Essential Seasons
and Cool-Pak, LLC. The agreement did not include an arbitration
clause. After that employment ended, Garcia applied for work with
appellant Expert Staffing West. As a part of her application for
employment with Expert Staffing West, Garcia agreed to submit all
disputes between them to arbitration. Her application was rejected.
Garcia later joined an existing class action for wage and
hour violations against all three appellants. She based her claims
on her prior employment by Essential Seasons and Cool-Pak. The
issue presented here is whether the arbitration agreement between
Garcia and Expert Staffing West applies to disputes arising
between Garcia and her former employers. We conclude that the
arbitration clause between a job applicant and her prospective
employer does not apply to disputes between the applicant and her
former employers based on the existence of a business relationship
between the prospective employer and the applicant’s past
employers.
Expert Staffing West and its Chief Executive Officer
Edward Bright, Essential Seasons and its owner/managing partner
Kathleen Winters,1 and Cool-Pak, LLC (collectively “Appellants”)
appeal from the trial court’s orders denying their motion to compel
Garcia to arbitrate her individual claims and denying their motions
to dismiss her class claims and stay the action. Essential Seasons
and Cool-Pak contend the trial court erred when it determined that
the arbitration agreement between Garcia and Expert Staffing
West did not apply to Garcia’s claims against them. We disagree
and affirm.
FACTUAL AND PROCEDURAL HISTORY
Garcia’s Employment at Essential Seasons/Cool-Pak in 2017
Essential Seasons provided contract-based labor
services for agricultural and foodservice companies. Cool-Pak, LLC
is a company that labels, packs, and ships produce.
In 2017, Essential Seasons hired Garcia and placed her
at Cool-Pak as a packer. During the time Garcia was an Essential
Seasons employee, Expert Staffing West provided payroll services to
1 Future references to Expert Staffing West include appellant
Bright and future references to Essential Seasons include appellant
Winters.
2
Essential Seasons.2 Garcia’s employment with Essential Seasons
and Cool-Pak ended in December 2017.
Job Application for Expert Staffing West
In 2019, Garcia applied for employment at Expert
Staffing West. Garcia completed and signed an arbitration
agreement as part of the application package. Garcia did not obtain
employment with Expert Staffing West after completing this
application.
The arbitration agreement stated: “In the event there
is any dispute between Employee and the Company relating to or
arising out of employment or the termination of Employee . . .
regardless of the kind or type of dispute, Employee and the
Company agree to submit all such claims or disputes to be resolved
by final and binding arbitration . . . .” The agreement defined “the
Company” as “Expert Staffing West and all related entities,
including entities where employees are sent to work.” (Italics
added.) The agreement also included a class action waiver, stating:
“neither Employee nor the Company will assert any class action . . .
claims against each other in arbitration, in any court, or otherwise.”
The agreement stated that it was “governed by the Federal
Arbitration Act, 9 U.S.C. § 1 et seq.”
Petition to Compel Arbitration
In 2018, several former employees sued Appellants and
others, alleging various individual and class action wage and hour
2 In addition to providing payroll services, Expert Staffing
West was also a temporary staffing company, which hired
employees for temporary work assignments at client sites, but there
is nothing in the record to suggest that Expert Staffing West was
involved in the hiring or employment of Garcia by Essential
Seasons/Cool-Pak in 2017.
3
claims. In November 2019, the plaintiffs in that lawsuit filed a
Third Amended Complaint, which added Garcia as a plaintiff.
Garcia’s allegations stemmed from her work at Essential
Seasons/Cool-Pak in 2017. Based on Garcia’s claims, Cool-Pak filed
a cross-complaint against Expert Staffing West and Essential
Seasons.
Expert Staffing West filed a petition to compel
arbitration of Garcia’s individual claims, a motion to dismiss
Garcia’s class claims, and a motion to stay the action pending
arbitration, based on the job application with Expert Staffing West,
executed after Garcia’s employment with Essential Seasons/Cool-
Pak had ended. Essential Seasons and Cool-Pak filed joinders to
the petition to arbitrate.
The trial court denied the petition. The court found
that Garcia “had not been employed by (or through) [Expert
Staffing West] for over a year when she signed the agreement at
issue in this case. Moreover, she did not obtain a job as a
consequence of her application for employment of which the
arbitration agreement was a part.” In interpreting the contract to
give effect to the parties’ mutual intent at the time of contracting,
the court noted that the “agreement which Ms. Garcia signed does
not even mention Cool-Pak.” The court found that under the
circumstances, Garcia had not “agreed to arbitrate her claims
against Cool-Pak[,] even conceding the principle of retroactivity as
established by Salgado.[3]” The court also denied the motions to
dismiss and stay the action.
3Salgado v. Carrows Restaurant, Inc. (2019) 33 Cal.App.5th
356 (Salgado).
4
DISCUSSION
Appellants contend the trial court erred when it
determined the arbitration agreement did not apply to Garcia’s
individual wage and hour claims. They argue this result is
compelled by our decision in Salgado, supra, 33 Cal.App.5th 356.
We disagree.
An arbitration agreement is a contractual agreement.
(Salgado, supra, 33 Cal.App.5th at p. 359.) “General contract law
principles include that ‘[t]he basic goal of contract interpretation is
to give effect to the parties’ mutual intent at the time of contracting.
[Citations.] . . . “The words of a contract are to be understood in
their ordinary and popular sense.” [Citations.]’ [Citation.]
Furthermore, ‘[t]he whole of a contract is to be taken together, so as
to give effect to every part, if reasonably practicable, each clause
helping to interpret the other.’ [Citation.]” (Mitri v. Arnel
Management Co. (2007) 157 Cal.App.4th 1164, 1170.)
Although there is a general policy favoring arbitration,
a party cannot be compelled to accept arbitration of a controversy
which they have not agreed to arbitrate. (Avery v. Integrated
Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59 (Avery).)
Without a clear agreement to arbitrate a controversy, courts will
not infer that the right to a jury trial has been waived. (Ibid.)
“‘There is no uniform standard of review for evaluating
an order denying a motion to compel arbitration. [Citation.] If the
court’s order is based on a decision of fact, then we adopt a
substantial evidence standard. [Citations.] Alternatively, if the
court’s denial rests solely on a decision of law, then a de novo
standard of review is employed. [Citations.]’ [Citation.]
Interpreting a written document to determine whether it is an
enforceable arbitration agreement is a question of law subject to de
5
novo review when the parties do not offer conflicting extrinsic
evidence regarding the document’s meaning. [Citation.]” (Avery,
supra, 218 Cal.App.4th at p. 60.) In this case, because the material
facts are not in dispute and there is no conflicting extrinsic evidence
relevant to the meaning of the agreement terms, we review de novo
whether the arbitration agreement applies to Garcia’s claims.
(Avery, supra, 218 Cal.App.4th at p. 60.)
We conclude that the arbitration agreement signed in
2019 “is not susceptible of an interpretation that covers” Garcia’s
prior employment by a different employer. (AT&T Technologies,
Inc. v. Communications Workers of America (1986) 475 U.S. 643,
650.)
The first sentence at the top of the agreement states the
agreement is part of the “onboarding package.” The word
“onboarding”4 reflects that the parties intended the agreement to
apply to new employees of Expert Staffing West. The agreement
states that the parties agreed to arbitrate “any dispute between
Employee and the Company relating to or arising out of the
employment or the termination of Employee,” and “the Company” is
defined as “Expert Staffing West and all related entities, including
where employees are sent to work.”
We conclude that the arbitration clause between a job
applicant and her prospective employer does not apply to disputes
between the applicant and her former employers merely because
her former employers had a business relationship with her
prospective employer.
4“Onboarding” is defined as “the act or process of orienting
and training a new employee.” (Merriam-Webster.com Dictionary,
[as of
Dec. 14, 2021], archived at .)
6
Salgado v. Carrows Restaurant, Inc.
Appellants argue this case is governed by Salgado,
supra, 33 Cal.App.5th 356, and that the broad language of the
arbitration agreement retroactively applies to Garcia’s claims
against prior employers because of the business relationship
between the past and prospective employers. We disagree.
Salgado sued Carrows Restaurant for employment
discrimination and civil rights violations. (Salgado, supra, 33
Cal.App.5th at p. 358.) The following month, Salgado signed an
arbitration agreement with Carrows Restaurant. (Id. at p. 359.)
Carrows moved to compel arbitration based on the arbitration
agreement, and Salgado opposed the motion on the ground that her
lawsuit predated the signing of the arbitration agreement. (Ibid.)
We determined that the language of the agreement was “broad in
scope” and retroactively applied to controversies that occurred
between the same parties before the agreement was signed. (Id. at
pp. 360-361; see also Franco v. Greystone Ridge Condominium
(2019) 39 Cal.App.5th 221 [a broadly worded arbitration agreement
signed after a lawsuit applied to the claims raised in the lawsuit].)
The agreement in Salgado recited that the parties
would “‘utilize binding arbitration as the sole and exclusive means
to resolve all disputes which may arise out of or be related in any
way to [the employee’s] application for employment and/or
employment.’” It also recited that “‘any claim, dispute, and/or
controversy . . . shall be submitted to and determined exclusively by
binding arbitration.’” (Salgado, supra, 33 Cal.App.5th at p. 359.)
We concluded that these provisions were “‘clear and explicit’” and
applied regardless of the age of the claim. (Id. at p. 361.) Rather,
the second provision “unequivocally require[d] arbitration for ‘any
claim’” Salgado had against Carrows. (Ibid.)
7
Salgado, supra, 33 Cal.App.5th 356 does not apply here.
Unlike Salgado, who was a Carrows employee when she signed the
arbitration agreement, Garcia was a job applicant and had never
been employed by Expert Staffing West when she signed the
arbitration agreement. And Garcia’s claims arose when she was
employed by a different company (i.e., Essential Seasons/Cool-Pak)
before she applied for a job with Expert Staffing West. No evidence
supports a finding that the parties intended to benefit Garcia’s
former employers, or that those former employers are prejudiced by
not being able to enforce an arbitration agreement they never
bargained for or executed.
The Former Employers are not Third-Party Beneficiaries
Appellants argue that Essential Seasons and Cool-Pak
can enforce the arbitration agreement because they are
non-signatories or third-party beneficiaries to the arbitration
agreement. We again disagree.
Appellants rely on Garcia v. Pexco, LLC (2017) 11
Cal.App.5th 782 (Pexco), in which the Court of Appeal held that an
employee was required to arbitrate claims against a nonsignatory to
an arbitration agreement. There, the employee was hired by a
temporary staffing company (Real Time) and was assigned to work
at Pexco. (Id. at p 784.) The employee signed an arbitration
agreement with Real Time, but the agreement did not mention
Pexco. (Ibid.) The employee sued Real Time and Pexco for wage
and hour violations which occurred during the employee’s
assignment with Pexco. (Id. at p. 785.) Real Time and Pexco moved
to compel arbitration. (Ibid.) The Court of Appeal determined that
under the principle of equitable estoppel, “‘a nonsignatory
defendant may invoke an arbitration clause to compel a signatory
plaintiff to arbitrate its claims when the causes of action against
8
the nonsignatory are “intimately founded in and intertwined” with
the underlying contract obligations.’ [Citation.]” (Id. at p. 786.)
Because the claims against Real Time and Pexco were based on the
same facts and were inseparable from the arbitrable claims against
Real Time, the employee was “equitably estopped from refusing to
arbitrate his claims with Pexco.” (Id. at p. 788.)
Pexco, supra, 11 Cal.App.5th 782, is distinguishable.
Nothing in the record here supports a finding that Essential
Seasons and Cool-Pak were third-party beneficiaries to the
arbitration agreement. Most significantly, Garcia never obtained a
job through her application with Expert Staffing West. There is no
basis for an estoppel here.
Effect of Agency Allegations
Finally, appellants contend they can enforce the
arbitration agreement because Garcia alleged in her complaint that
Appellants were all agents/alter-egos of one another. A similar
argument was rejected in Barsegian v. Kessler & Kessler (2013) 215
Cal.App.4th 446, 451 (Barsegian).
There, the Kessler defendants argued that because the
complaint alleged that the defendants are agents of each other, all
defendants were entitled to enforce each other’s arbitration
agreement. (Barsegian, supra, 215 Cal.App.4th at p. 451.) In
rejecting this argument, the Court of Appeal observed that
complaints in actions against multiple defendants often include
allegations that the defendants were each other’s agents because
such allegations may ultimately prove to be necessary. (Ibid.) The
court observed that if the “defendants’ argument were sound, then
in every multidefendant case in which the complaint contained
boilerplate allegations of mutual agency, as long as one defendant
had entered into an arbitration agreement with the plaintiff, every
9
defendant would be able to compel arbitration, regardless of how
tenuous or nonexistent the connections among the defendants
might actually be.” (Ibid.) The court concluded that the allegations
in the complaint did not constitute a judicial admission allowing the
Kessler defendants to compel arbitration. (Id. at p. 453.)
We agree with Barsegian, supra, 215 Cal.App.4th 446,
and conclude that the allegations regarding agency in the complaint
did not allow Appellants to compel arbitration of Garcia’s claims.
As in Barsegian, there has been no judicial admission here.
Because the arbitration agreement does not apply to
Garcia’s claims, we conclude that the trial court properly dismissed
the motions to dismiss the class action claims and to stay the
action.
DISPOSITION
The judgment is affirmed. Garcia shall recover costs on
appeal.
CERTIFIED FOR PUBLICATION.
TANGEMAN, J.
We concur:
GILBERT, P. J.
PERREN, J.
10
Henry J. Walsh, Judge
Superior Court County of Ventura
______________________________
Epstein Becker & Green, Michael S. Kun and Kevin
D. Sullivan for Defendants and Appellants Expert Staffing West
and Edward Bright.
Law Offices of Mary E. Lynch and Mary E. Lynch for
Defendants and Appellants Essential Seasons, LLC and Kathleen
Winters.
Ogletree, Deakins, Nash, Smoak & Stewart, Evan R.
Moses and Marlene M. Moffitt for Defendant and Appellant Cool-
Pak, LLC.
Marlin & Saltzman, Stanley D. Saltzman, Karen I.
Gold; Weilbacher & Weilbacher, Brian R. Weilbacher, Lisa D.
Walker; Law Office of William P. Haney and William P. Haney
for Plaintiff and Respondent.