Flores v. C.H. Robinson Co., Inc. CA4/1 ( 2022 )

Filed 12/19/22 Flores v. C.H. Robinson Co., Inc. CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
ROY FLORES et al., D080906
Plaintiffs and Respondents,
v. (Super. Ct. No. CIVDS2012423)
C.H. ROBINSON COMPANY, INC., et
al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of San Bernardino
County, David S. Cohn, Judge. Reversed.
Ogletree, Deakins, Nash, Smoak & Stewart, Jack S. Sholkoff and
Carmen M. Aguado for Defendants and Appellants C.H. Robinson Company,
Inc., and C.H. Robinson Worldwide, Inc.
Lewis Brisbois Bisgaard & Smith, Raul L. Martinez, Rachel J. Lee and
Vi N. Applen for Defendant and Appellant United Employment Solutions,
Inc.
Protection Law Group, Heather M. Davis, Amir Nayebdadash, Priscilla
Gamino and Kristen Tojo for Plaintiffs and Respondents.
C.H. Robinson Company, Inc., C.H. Robinson Worldwide, Inc.
(collectively Robinson), and United Employment Solutions, Inc. (United),
appeal the order denying their motions to compel arbitration of Roy Flores’s
individual claims for violations of the Labor Code and the unfair competition
law (UCL; Bus. & Prof. Code, § 17200 et seq.). They contend the trial court
erred by ruling they failed to establish the existence of an arbitration
agreement. We agree and reverse.
I.
BACKGROUND
A. Parties’ Relationships
United is a staffing and recruitment agency that supplies employees to
employers in many states. One of Robinson’s divisions markets and
distributes fresh produce globally and maintains facilities throughout the
United States. Robinson contracted with United to supply employees to meet
Robinson’s staffing needs.
Flores went to United for a screening interview and completed an
employment application that had United’s full corporate name at the top of
each page and its address at the bottom. Flores also signed a separate
document that contained the following provision:
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United placed Flores at Robinson’s facility in Los Angeles, where he worked
for approximately five months.
B. Flores’s Lawsuit Against Robinson and United
Flores, acting individually, on behalf of others similarly situated, and
as a private attorney general, sued Robinson and United for violations of the
Labor Code and the UCL. He alleged they jointly employed him and the
other members of the class he sought to represent. In nine separate causes of
action, Flores alleged Robinson and United (1) failed to pay overtime,
(2) failed to pay premiums for missed meal periods, (3) failed to pay
premiums for missed rest periods, (4) failed to pay minimum wages, (5) failed
to pay final wages timely, (6) failed to pay wages timely during employment,
(7) failed to provide accurate wage statements, (8) failed to keep accurate
payroll records, and (9) violated the UCL by these failures. As a 10th cause
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of action, Flores alleged the various Labor Code violations as a representative
of other aggrieved employees under the Private Attorneys General Act
(PAGA; Lab. Code, § 2698 et seq.). On the individual and class claims, he
sought monetary and injunctive relief, interest, costs, and attorney fees. On
the PAGA claim, Flores sought civil penalties, interest, costs, and attorney
fees.
Robinson and United filed separate answers to the complaint in which
they asserted general denials and affirmative defenses but made no mention
of an arbitration agreement. They also responded to Flores’s written
discovery requests without mentioning arbitration.
C. Motions to Compel Arbitration
At a case management conference held approximately two months after
Robinson and United filed their answers, United’s counsel informed the trial
court that United had just discovered that Flores executed an arbitration
agreement and that it intended to file a motion to compel arbitration. The
court set a hearing date three months out.
In its motion to compel arbitration, United argued the agreement
involved interstate commerce, was enforceable under the Federal Arbitration
Act (FAA; 9 U.S.C. § 1 et seq.), and required arbitration of all the claims
except the PAGA claim. United asked the trial court to order Flores to
arbitrate his non-PAGA claims on an individual basis, to dismiss the class
claims, and to stay the PAGA claim until completion of arbitration. In
support of the motion, United’s counsel submitted a declaration stating that
Flores’s counsel refused a request to proceed to arbitration. United’s branch
manager, Maira Fernandez, submitted a declaration stating she maintains
personnel records for current and former employees, provides prospective
employees applications and other documents, and interviews prospective
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employees. Fernandez interviewed Flores and gave him an employment
application and an arbitration agreement. Fernandez provided Flores an
opportunity to read the documents and ask questions, but he asked no
questions and signed the documents. Fernandez also signed the arbitration
agreement. She attached copies of the employment application and
arbitration agreement to her declaration. United’s controller submitted a
declaration stating its clients operate in California, Texas, New York, and
other states, and it contracts with a payroll funding partner headquartered in
Ohio.
Robinson filed a separate motion to compel arbitration in which it
argued it could enforce the arbitration agreement between Flores and United
under the doctrine of equitable estoppel, made arguments similar to those of
United on enforceability of the agreement, and sought the same relief.
Robinson submitted a declaration from the manager of the facility where
Flores had worked that generally described Robinson’s global business
operations and Flores’s job. Attached to the declaration were copies of
staffing services agreements between Robinson and United.
Flores filed separate oppositions to the motions but made the same
arguments in both. He argued: (1) no arbitration agreement had been shown
to exist, because the agreement United submitted did not identify the parties;
(2) the purported agreement was unconscionable, because he had no choice
but to sign it as part of the employment application process, and because the
agreement is overbroad, requires him to pay arbitration costs, and does not
guarantee costs and attorney fees to a prevailing employee; (3) United and
Robinson waived the right to compel arbitration by unreasonably delaying in
filing the motions, failing to assert arbitration as a defense in their answers,
and responding to discovery; and (4) there was no basis to stay the PAGA
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claim if the trial court were to order him to arbitrate his individual claims.
Flores submitted a declaration stating he was not given an opportunity to
review any of the documents he signed when he applied for employment at
United, could not negotiate any terms of the documents, did not recall signing
any document referring to arbitration, was not then aware of what
arbitration is, and was not given copies of any documents he signed.
In reply, United and Robinson argued they adequately proved the
existence of a written arbitration agreement. They also argued Flores did not
adequately prove unconscionability, because execution of the arbitration
agreement involved no oppression or surprise, the agreement is not
overbroad, and it neither requires him to pay arbitration costs nor precludes
an award of costs or attorney fees if he prevails. United and Robinson argued
Flores did not adequately prove waiver, because they moved to compel
arbitration promptly after appearing in the case and learning of the
agreement and did not engage in substantial litigation activity in the
meantime. Finally, United and Robinson argued the PAGA claim should be
severed and stayed to avoid simultaneous proceedings on overlapping factual
and legal issues.
The trial court held a hearing and denied the motions to compel
arbitration “because the moving parties have failed to establish that an
agreement to arbitrate exists.” The court stated that although the
arbitration agreement submitted by United “states that it is a ‘mutual
agreement’ addressing claims arising from employment, including wage and
overtime claims (unquestionably the subject of this lawsuit), it does not
identify the parties to the agreement.” The court also stated that United and
Robinson had “emphasize[d] that this purported arbitration agreement is a
separate, stand-alone agreement,” and “[a]s such, it cannot be ascertained
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who the parties are.” The trial court did not reach the other issues the
parties raised.
II.
DISCUSSION
United and Robinson attack the trial court’s ruling that they failed to
establish the existence of an arbitration agreement. They contend the failure
of the arbitration agreement itself to identify the parties did not prevent
formation of the agreement, because any uncertainty disappears when the
agreement is considered as part of the larger transaction that included an
employment application that clearly identified Flores and United as the
parties. In response, Flores defends the trial court’s ruling. He argues the
failure of the arbitration agreement to identify the parties makes it
unenforceable; and this uncertainty cannot be removed by reference to the
employment application, he says, because United and Robinson argued in the
trial court that the agreement was a stand-alone document. As alternative
grounds for affirmance, Flores asserts the waiver and unconscionability
defenses he asserted in the trial court. United and Robinson respond to the
waiver and unconscionability defenses as they did in the trial court.
As we explain below, the trial court erred in concluding United and
Robinson failed to establish the existence of an agreement to arbitrate.
Because the court did not reach the other issues raised by the parties, some of
which involve factual questions and exercise of discretion, we reverse and
remand to allow the court to consider those issues.
A. Appealability and Standard of Review
An order denying a motion to compel arbitration is appealable. (Code
Civ. Proc., § 1294, subd. (a).) “Whether a valid agreement to arbitrate was
formed is reviewed de novo where the facts are not disputed.” (Juen v. Alain
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Pinel Realtors, Inc. (2019) 32 Cal.App.5th 972, 978.) “Interpreting a written
document to determine whether it is an enforceable arbitration agreement is
[also] a question of law subject to de novo review when the parties do not
offer conflicting extrinsic evidence regarding the document’s meaning.”
(Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 60.)
The parties agree the material facts concerning the existence of an
arbitration agreement are not in dispute, and therefore our review is de novo.
B. Existence of Arbitration Agreement
We begin with some general principles on proving the existence of an
arbitration agreement. “Under both federal and state law, the threshold
question presented by a petition to compel arbitration is whether there is an
agreement to arbitrate.” (Cheng-Canindin v. Renaissance Hotel Associates
(1996) 50 Cal.App.4th 676, 683 (Cheng-Canindin); see 9 U.S.C. § 4 [court
generally must order arbitration “upon being satisfied that the making of the
agreement for arbitration . . . is not in issue”]; Code Civ. Proc., § 1281.2 [court
generally must order arbitration “if it determines that an agreement to
arbitrate the controversy exists”].)1 “The question of whether the parties
agreed to arbitrate is answered by applying state contract law even when it is
alleged that the agreement is covered by the FAA.” (Cheng-Canindin, at
1 We assume for purposes of our decision that the FAA applies. Robinson
and United argued for its application in the trial court and submitted
evidence the arbitration agreement was part of “a contract evidencing a
transaction involving commerce.” (9 U.S.C. § 2; see Allied-Bruce Terminix
Cos. v. Dobson (1995) 513 U.S. 265, 277 [“the word ‘involving,’ like ‘affecting,’
signals an intent to exercise Congress’ commerce power to the full”]; Circuit
City Stores, Inc. v. Adams (2001) 532 U.S. 105, 113-119 [FAA applies to
employment contracts affecting commerce except those of transportation
workers].) Flores did not argue in the trial court that the FAA does not
apply. No party has argued in this court that applying the FAA would
produce a result different from that of applying state law.
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p. 683.) Because the existence of an arbitration agreement is a statutory
prerequisite to an order compelling arbitration, the party seeking the order
has the burden to prove its existence by a preponderance of the evidence.
(Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413
(Rosenthal).) A party moving to compel arbitration may satisfy the initial
burden to prove an arbitration agreement exists simply by submitting a copy
with the motion. (Cal. Rules of Court, rule 3.1330; Baker v. Italian Maple
Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.)
We turn now to the record to determine whether United and Robinson
met their burden to prove the existence of an agreement requiring Flores to
arbitrate his claims. With its moving papers, United submitted as an
attachment to Fernandez’s declaration a copy of a one-page document
including the arbitration agreement on which it relied. Robinson also relied
on the attachment in its moving papers.2 The attachment contains a
paragraph under the heading, “MUTUAL ARBITRATION AGREEMENT –
IMPORTANT – THIS AFFECTS YOUR RIGHTS,” which states that “any
controversy, claim or dispute arising out of or relating to Applicant’s
application or candidacy for employment, employment and/or cessation of
employment . . . will be resolved exclusively by final and binding arbitration
before a neutral Arbitrator.” The paragraph also states, “This is a mutual
agreement and is binding for claims of either party.” Immediately above the
arbitration agreement is another paragraph under the heading,
“AUTHORIZATION,” which refers to “this application” and releases “the
2 Specifically, Robinson requested the trial court take judicial notice of
Fernandez’s declaration and the attached arbitration agreement. In its order
denying the motions to compel arbitration, the court stated it could “take
judicial notice only of the fact that the declaration was filed, not its content,”
and “consider[ed] the declaration as though it was filed in each motion.”
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company” from liability for using information it is authorized to obtain by
investigating statements made and references listed in the application.
Although neither the authorization provision nor the arbitration provision
defines “Applicant,” “the company,” or “either party,” immediately below the
arbitration provision is a signature line containing Flores’s name, and
immediately below that line is a line containing Fernandez’s name next to
“INTERVIEWED BY.” Thus, when the attachment to Fernandez’s
declaration is considered by itself, this much is clear: The attachment
contains an agreement to arbitrate employment-related disputes between
Flores (the “Applicant” for employment) and an unidentified employer (“the
company”) on whose behalf Fernandez interviewed Flores.
The question, then, is whether the failure to identify the employer in
the arbitration provision itself prevented formation of an agreement. This
question must be answered by applying California contract law. (Cheng-
Canindin, supra, 50 Cal.App.4th at p. 683.) Under that law, the existence of
a contract requires that there be “[p]arties capable of contracting” (Civ. Code,
§ 1550, subd. 1) and “that it should be possible to identify them” (id., § 1558).
“We are aware of no rule of law which, to bind the parties to a contract,
imperatively requires the names of all such parties to be inserted in the body
of the instrument. If the contract shows, by some reference, who the parties
to the contract are and so sufficiently identifies them, it is sufficient.” (Union
Trust Co. v. Dickinson (1916) 30 Cal.App. 91, 96.) Here, the arbitration
provision refers to “Applicant’s application . . . for employment” and states it
is “a mutual agreement . . . binding for claims of either party.” To identify
those parties, resort may be had to the employment application, which Flores
completed and signed with the arbitration agreement during the interview by
Fernandez, because documents on the same subject, between the same
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parties, and from the same transaction are to be considered together. (Civ.
Code, § 1642; Holguin v. Dish Network LLC (2014) 229 Cal.App.4th 1310,
1320; Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1675-1676
(Brookwood).) The application prominently identifies United as the employer
on each page and identifies Flores as the “undersigned applicant” in a
paragraph next to which he placed his initials. Consideration of the
employment application thus removes any uncertainty in the identity of the
parties to the arbitration agreement—they are United and Flores. (See
Colonial Ins. Co. v. Montoya (1986) 184 Cal.App.3d 74, 83 [“What might
otherwise be considered an ambiguity is resolved when we look at the total
transaction.”].)
Flores insists the employment application cannot be considered to
determine who are the parties to the arbitration agreement, because in the
trial court United and Robinson asserted the agreement was “a separate, one-
page, stand-alone document.” Flores cites statements to that effect in the
memoranda of points and authorities supporting the motions to compel
arbitration and in Fernandez’s declaration. The trial court cited the same
statements in its order denying the motions to compel arbitration as support
for its conclusion the parties to the arbitration agreement could not be
ascertained. We disagree the cited statements preclude consideration of the
employment application to determine who are the parties to the arbitration
agreement.
United and Robinson made the statements about the separate nature of
the arbitration agreement as part of discussions of the circumstances under
which Flores signed the agreement and in support of arguments that those
circumstances did not involve oppression or surprise that would make the
agreement procedurally unconscionable. (See, e.g., OTO, L.L.C. v. Kho (2019)
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8 Cal.5th 111, 125 [“ ‘The procedural element [of unconscionability] addresses
the circumstances of contract negotiation and formation, focusing on
oppression or surprise due to unequal bargaining power’ ”].) Indeed,
Fernandez stated: “The Mutual Arbitration Agreement was not hidden in a
lengthy agreement, buried in an employee handbook, or written in fine print.
Instead, it was a separate, stand-alone, single-page agreement.” Neither
United nor Robinson made the cited statements in support of the contention
that the arbitration agreement had to stand or fall on its own or that the
court could not consider any other documents in determining its
enforceability. Rather, both United and Robinson pointed out Flores signed
the arbitration agreement at the same time he completed the employment
application on United’s letterhead, and they argued this was sufficient to
form an agreement to arbitrate between him and United. Therefore, the trial
court should have considered Flores’s employment application in determining
whether United and Robinson had proved the existence of an agreement to
arbitrate. (Civ. Code, § 1642 [related documents between same parties in one
transaction “are to be taken together”]; Brookwood, supra, 45 Cal.App.4th at
pp. 1675-1676 [trial court properly considered separate documents containing
arbitration clauses and employment contract with no such clause when all
documents were part of same transaction].)
In failing to consider the employment application, the trial court
erroneously relied on Flores v. Nature’s Best Distribution, LLC (2016)
7 Cal.App.5th 1 (Flores) and Cisco v. Van Lew (1943) 60 Cal.App.2d 575(Cisco) to conclude uncertainty in the identity of the parties to the arbitration
agreement precluded its enforcement. Flores cites the same cases in urging
us to affirm the trial court’s ruling. The cases are distinguishable and do not
support the ruling.
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In Flores, supra, 7 Cal.App.5th at page 9, the defendants “sought to
compel arbitration solely based on the arbitration provision contained in the
[alternative dispute resolution (ADR) agreement] which defendants claimed
plaintiff signed.” The ADR agreement stated it was “between ‘employee and
Company’ ” but did not define either term. (Ibid.) The plaintiff’s name was
printed and signed in the signature block for the employee, but the signature
block for the employer was blank. (Ibid.) The plaintiff had sued four
different entities. (Id. at p. 3.) The ADR agreement also stated it applied to
all employee disputes except those subject to a collective bargaining
agreement (CBA), but the defendants did not submit the CBA with their
moving papers or explain why the ADR agreement and not the CBA applied
to the plaintiff’s claims. (Id. at pp. 4, 10.) Based on the ambiguity about
whether the ADR agreement applied to any of the plaintiff’s claims against
any of the defendants, the Court of Appeal could not “conclude the parties
reached agreement on the matter of submitting any or all of [the] plaintiff’s
claims to final and binding arbitration as contemplated by the [ADR
agreement].” (Id. at p. 11.) No such ambiguity exists in this case. There is
only one arbitration agreement at issue, and the related employment
application makes clear the parties to the agreement are Flores and United.
In Cisco, supra, 60 Cal.App.2d at page 577, the plaintiffs sought
specific performance of an alleged agreement for the sale of real property.
The only writing signed by the defendant did not identify the plaintiffs as
parties or purchasers. (Id. at pp. 578, 583.) The Court of Appeal held the
writing did not comply with the requirements of the statute of frauds (Civ.
Code, § 1624) for an agreement for the sale of real property, including
certainty as to the parties, and hence was not subject to specific performance.
(Cisco, at pp. 581-583.) This case does not involve a contract for the sale of
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real property or the statute of frauds. Moreover, the only writing at issue in
Cisco made no mention of the plaintiffs. Here, by contrast, the employment
application Flores filled out when he signed the arbitration agreement
identified United as the other party to the agreement.
In sum, by submitting with the motions to compel arbitration the
arbitration agreement Flores signed, his related employment application, and
Fernandez’s declaration describing the execution of those documents, United
and Robinson satisfied their burden to prove the existence of an agreement to
arbitrate. (Rosenthal, supra, 14 Cal.4th at p. 413 [party moving to compel
arbitration must prove existence of arbitration agreement]; Cruise v. Kroger
Co. (2015) 233 Cal.App.4th 390, 398-399 [arbitration agreement was formed
between employee and company when employee signed employment
application that was printed on company letterhead and contained
arbitration clause].) The trial court erred by concluding otherwise.
C. Other Issues
The parties raised several other issues in the trial court. Robinson
argued that even though it is not a party to the arbitration agreement, it may
enforce the agreement under the doctrine of equitable estoppel. Both United
and Robinson argued the class claims must be dismissed and the PAGA claim
must be stayed until completion of the arbitration of Flores’s individual
claims. Flores argued that even if an arbitration agreement existed, it could
not be enforced because it was unconscionable and Robinson and United
waived any right to enforce it. Having determined there was no agreement to
arbitrate, the trial court did not rule on these other issues.
The parties have briefed the waiver and unconscionability issues in this
court, but not the equitable estoppel and stay issues. The issues of equitable
estoppel, waiver, and unconscionability may present questions of fact.
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(Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010)
186 Cal.App.4th 696, 708 [equitable estoppel]; Baker v. Osborne Development
Corp. (2008) 159 Cal.App.4th 884, 892 [unconscionability]; Berman v. Health
Net (2000) 80 Cal.App.4th 1359, 1363 [waiver].) The stay issue is a matter
committed to the discretion of the trial court. (Code Civ. Proc., § 1281.4; Cruz
v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 320.) We decline to
address any of these issues in the first instance and leave them for the trial
court on remand. We express no opinion on how the court should resolve any
of them.
III.
DISPOSITION
The order denying the motions to compel arbitration is reversed. The
matter is remanded to the trial court for consideration of the equitable
estoppel, waiver, unconscionability, and stay issues raised by the parties in
support of and in opposition to the motions.
IRION, Acting P. J.
WE CONCUR:
DO, J.
BUCHANAN, J.
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