Monplaisir v. Integrated Tech Group, LLC ( 2020 )

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 10 PAUL MONPLAISIR, et al., 11 Plaintiffs, No. C 19-01484 WHA 12 v. 13 INTEGRATED TECH GROUP, LLC, et al., ORDER COMPELLING ARBITRATION 14 Defendants. 15 16 INTRODUCTION 17 In this wage-and-hour putative class action, defendant employers move to compel 18 arbitration as to a subset of plaintiff employees. Because the arbitration agreement is valid, 19 covers the claims in suit, and is not unconscionable, ARBITRATION IS ORDERED. 20 STATEMENT 21 The facts of this case are set out in prior orders. Briefly, defendants Integrated Tech 22 Group, LLC and ITG Communications LLC install cable and communication equipment across 23 the nation. The complaint alleges that defendants made plaintiffs work significant portions of 24 their day off-the-clock, including trainings, pre-shift work, meal periods, driving time, and other 25 added work. Additionally, defendants allegedly pressured plaintiffs to alter or not submit 26 billing records. Plaintiffs filed this action in March 2019, alleging various state and federal law 27 wage-and-hour claims. An August 6 order granted plaintiffs’ motion for conditional class 1 close of the opt-in period (Dkt. No. 76). The period closed on January 9 (Dkt. No. 164), so this 2 order now addresses the motion to compel. 3 Defendants invoke an arbitration agreement against many plaintiffs, including opt-in 4 plaintiffs. Since around January 2017, defendants have included an arbitration agreement in 5 new-hire packets (Dkt. No. 65 at 9). The agreement provides for arbitration to resolve “all 6 disputes . . . arising out of or relating to Parties’ employment relationship or termination of that 7 relationship” (Dkt. No. 65-8 at ¶ 1). The agreement also includes a class action waiver (id. at ¶ 8 5) and specifies “[c]ommon law claims shall be decided in accordance with Florida substantive 9 law” (id. at ¶ 10). Of the more than 2,600 potential plaintiffs, defendants contend 10 approximately 1,400 signed the arbitration agreement. This order follows full briefing and oral 11 argument. 12 ANALYSIS 13 Under the Federal Arbitration Act, a district court determines “whether a valid arbitration 14 agreement exists, and if so, whether the agreement encompasses the dispute at issue.” Lifescan, 15 Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). Here, plaintiffs do 16 not dispute the arbitration agreement, which “govern[s] the resolution of all disputes . . . arising 17 out of or relating to the Parties’ employment relationship or termination of that relationship,” 18 covers the wage and hour claims in suit (Dkt. No. 65-8 ¶ 2). Thus, the only issue is whether the 19 arbitration agreement is valid and enforceable. 20 Plaintiffs contend: (1) the arbitration agreement is unconscionable; (2) defendant ITG 21 Communications may not enforce the arbitration agreement; and (3) procedural defects mean 22 certain plaintiffs never agreed to arbitrate. 23 1. UNCONSCIONABILITY 24 “Under California law, a contractual clause is unenforceable if it is both procedurally and 25 substantively unconscionable.” Courts use a sliding scale: more substantive unconscionability 26 requires less procedurally unconscionability to render the contract term unenforceable, and vice 27 versa. But “both must be present” for a court to deem a contract unenforceable as 1 unconscionable. Davis v. O’Melveny & Myers, 485 F.3d 1066, 1072 (9th Cir. 2007) (overruled 2 on other grounds) (emphasis added). 3 Here, AT&T Mobility v. Concepion, 563 U.S. 333 (2011), and Epic Systems v. Lewis, 584 4 U.S. __, 138 S. Ct. 1612 (2018), effectively foreclose any substantive unconscionability 5 challenge to the arbitration agreement plus class-action waiver. So plaintiffs challenge the 6 agreement as “unfairly one sided” because several employee arbitration agreements leave blank: 7 (1) the identity and address of the ITG officer “to whom the employee should send notice in 8 order to initiate any arbitration proceeding,” and (2) the “location of the arbitration proceeding” 9 (Dkt. No. 67 at 11–12). At the hearing the parties represented that fifty-five opt-in plaintiffs’ 10 agreements left the notice provision blank, five other opt-in plaintiffs’ agreements left the 11 location provision blank, and 121 further opt-in plaintiffs’ agreements left both blank. To 12 plaintiffs, the blanks make it unfairly difficult for employees to invoke the dispute resolution 13 process. 14 These blanks are troubling omissions to contracts that defendants drafted. But at the 15 hearing, defendants stipulated to filling the blanks with the most plaintiff-favorable terms. The 16 location provision now permits plaintiffs to arbitrate their claims in any county of their 17 choosing. And the closing of opt-in period moots the notice provision because ITG has notice 18 of plaintiffs’ wish to sue (Dkt. No. 164). Moreover, the agreement specifies the American 19 Arbitration Association as the arbitrator, and commits defendants to pay the arbitrator’s fees 20 and costs (Dkt. Nos. 65 at 5; 65-6 at ¶¶ 2, 14). These terms ease this order’s conclusion that the 21 agreement is substantively conscionable. 22 In sum, unenforceability for unconscionability requires both procedural and substantive 23 defects. Plaintiffs’ pleas of procedural unconscionability cannot, as a matter of law, overcome 24 the lack of substantive unconscionability. See Davis, 485 F.3d at 1072. The arbitration 25 agreement is, thus, not unconscionable. 26 2. ENFORCEMENT BY ITG COMMUNICATIONS, LLC. 27 Plaintiffs next contend one defendant, ITG Communications, may not invoke the 1 ITG Communications is, strictly, not a signatory to the asserted agreement between the 2 employees and Integrated Tech Group, LLC (Dkt. Nos. 65-8, 67 at 5–6). Ordinarily it would be 3 a close call whether ITG Communications could invoke the arbitration agreement against 4 plaintiffs. But here, we enjoy a unique circumstance. Defendants have stipulated, for the 5 purposes of this litigation, that they are plaintiffs’ joint employers (Elizabeth Stone Tr., Dkt. 6 No. 128-5 at 119–20). Thus, ITG Communications, as joint employer, may arbitrate plaintiffs’ 7 wage and hour claims alongside Integrated Tech Group. 8 3. CONTRACT VALIDITY. 9 Last, plaintiffs note a language barrier that might simply preclude contract formation. The 10 argument has merit. The “mutual manifestation of assent, whether by written or spoken word or 11 by conduct, is the touchstone of contract.” Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 12 1175 (9th Cir. 2014). The manifestation of assent is judged objectively. See Cal Fire Local 13 2881 v. Cal. Pub. Empls. Ret. Sys., 435 P.3d 433, 455 (Cal. 2019) (Kruger, J., concurring); 14 1 WITKIN, SUMMARY OF CAL. L., CONTRACTS § 767 (11th ed. 2017). And, where a party’s 15 conduct could not reasonably be taken as assent to contract, for example where the terms are 16 hidden, no contract is formed. See Barnes & Noble, 763 F.3d at 1177 (citing Specht v. 17 Netscape, 306 F.3d 17, 29 (2d Cir. 2002)). 18 It could certainly be found that otherwise assenting conduct cannot so indicate where one 19 party’s limited English reasonably precludes contract comprehension absent translation. 20 Defendants’ response that “[a]ll technicians are required to read, comprehend, and write English 21 in order to effectively communicate with customers, clients, and co-workers to fulfill their job 22 duties” is unconvincing (Dkt. No. 71 at 11). English competence to install cable hardware is 23 one thing — the “English” used in most contracts is quite another. 24 But plaintiffs offer insufficient evidence of a language barrier, merely two identical 25 statements alleging “English is my second language and I did not understand all the complex 26 legal documents” (Dkt. Nos. 67-4, 67-5 at ¶ 6). The bare allegation that “English is my second 27 language” is not probative of English proficiency. Education and practice with the language is. 4. DEFENDANTS’ MOTION TO STAY PROCEEDINGS Under 9 U.S.C. § 3, the Court “shall on application of one of the parties stay the trial until such arbitration has been had in accordance with the terms of the agreement.” Our court of ° appeals has acknowledged that this language “seems to direct that the action ‘shall’ be stayed pending completion of arbitration.” Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072, ° 1073 (9th Cir. 2014); see also Kilgore v. KeyBank, Nat’l Ass’n, 718 F.3d 1052, 1057 (9th Cir. ° 2013). Following this dictum yields the pragmatic result. Plaintiffs’ PAGA claims are ’ derivative of the substantive claims — half of which will proceed to arbitration and half of ° which remain before the Court. There is no use proceeding on the PAGA claims here with ° potentially half the class missing. All PAGA claims are STAYED pending resolution of the arbitration proceedings. CONCLUSION The arbitration being valid, enforceable, and not unconscionable, defendants’ motion to 4 compel arbitration against all plaintiffs who signed the agreement (Dkt. Nos. 65-5 164-1 S (indexes), 65-6, 164-2, 164-3 (agreements)) is GRANTED. The remainder of plaintiffs will proceed on their primary claims. All PAGA claims, for all plaintiffs, are STAYED. 17 IT IS SO ORDERED. Z 18 19 Dated: March 2, 2020. 20 21 22 (A: ALSUP 3 UNITED STATES DISTRICT JUDGE 24 25 26 27 28