Elie Hernandez v. Pacific Underground Construction, Inc. et al.

Plaintiff objects to the Declaration of Dean Romeo. The court rules on these objections as follows:

Objection Nos. 1 & 2 are OVERRULED. Plaintiff does not dispute that he was employed by Defendant. (Declaration of Elie Hernandez at ¶ 2.) Plaintiff also acknowledges that he was a member of the Laborers’ International Union of North America, Local 270. (Id. at ¶ 6.) 4

Objection No. 3 is SUSTAINED in so far as Defendant mischaracterizes Exhibit B, but otherwise OVERRULED because “[f]or purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of authentication.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165 (Gamboa).) Moreover, “the custodian of a document need not have been present or employed when the document was created or signed to authenticate a document in the company’s files.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 756, 758 (Iyere).)

Objection No. 4 is OVERRULED because on a petition to compel arbitration, the Defendant meets its burden by attaching the agreement to the petition as it has done so here. (Gamboa, supra, 72 Cal.App.5th at p. 165.)

Objection No. 5 is OVERRULED. Mr. Romeo has been the Chief Financial Officer for 25 years and states that he has “personal knowledge of and access to employee personnel files, employment records, human resources information system, and employee payroll records, which are maintained by Pacific Underground Construction, Inc. in the ordinary course of business. I also have personal knowledge about Pacific Underground Construction Inc.’s general business structure, business operations and employees.” (Declaration of Dean Romeo at ¶ 4.)

Plaintiff also objects to the Declaration of Karin M. Cogbill. The court rules on these objections as follows:

Objection No. 1 is OVERRULED. Secondary evidence is admissible in this instance because there is no genuine dispute that the emails were sent or that Defendant requested Plaintiff to comply with the grievance procedure. The admission of counsel’s declaration is not unfair. (Evid. Code, § 1521.)

Objection No. 2 is OVERRULED. Counsel’s declaration is based on her personal knowledge and reference to the papers filed with respect to the motion to remand.

ANALYSIS

The Federal Arbitration Act (FAA) controls because defendant is engaged in interstate commerce. The basic coverage provision of the FAA “makes the law applicable to contracts evidencing a transaction ‘involving commerce’ (9 U.S.C. § 2), which language reflects that Congress intended the law’s coverage to extend to the full reach of its commerce clause power.” (Nieto v. Fresno Beverage Co. (2019) 33 Cal.App.5th 274, 279 [internal citations omitted].) “Congress’ Commerce Clause power ‘may be exercised in individual cases without showing any specific effect upon interstate commerce’ if in the aggregate the economic activity in question would represent ‘a general practice . . . subject to federal control.’” (Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56-57, quoting Mandeville Island Farms, Inc. v. American Crystal Sugar Co. (1948) 334 U.S. 219, 236.)

Defendant is based in Northern California and “receive[s] equipment and materials for underground pipeline construction and maintenance from across the United States and internationally.” (Romeo Decl. at ¶ 8.) The purchase of supplies originating from outside

California satisfies the interstate commerce requirement. (Scott v. Yoo (20160 248 Cal.App.4th 392, 401-402.)

Under the FAA, the court’s role 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. (9th Cir. 2000) 207 F.3d 1126, 1130.) To determine “whether a valid contract to arbitrate exists,” courts apply “ordinary state law principles that govern contract formation.” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1093, citations omitted.)

Code of Civil Procedure section 1281.2 provides: “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate such controversy, the court shall order the petitioner and respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] The right to compel arbitration has been waived by the petitioner; or [¶] (b) Grounds exist for rescission of the agreement.”

In determining the threshold question of whether an arbitration agreement exists between the parties, the court employs a three-step burden shifting analysis. (Iyere supra, 87 Cal.App.5th at p. 755; Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.) The party seeking to compel arbitration bears the initial burden of showing an agreement to arbitrate. If that burden is met, the burden shifts to the opposing party to show a factual dispute regarding the agreement’s existence. If the opposing party does so, then the burden shifts back to the proponent of arbitration to show the existence of a valid agreement by a preponderance of the evidence. (Iyere, supra, 87 Cal.App.5th at p. 755.)

There is a Valid Agreement to Arbitrate

“A union representative may agree on an employee’s behalf as part of the collective bargaining process to require the employee to arbitrate controversies relating to an interpretation or enforcement of a CBA.” (Cortez v. Doty Bros. Equipment Co. (2017) 15 Cal.App.5th 1, 11 (Cortez), citing 14 Penn Plaza LLC v. Pyett (2009) 556 U.S. 247, 258 [“Nothing in the law suggests a distinction between the status of arbitration agreements signed by an individual employee and those agreed to by a union representative.”].) Defendant has met its burden of proving the existence of an agreement to arbitrate by attaching the CBAs containing the arbitration provisions to its petition. (Gamboa, supra, 72 Cal.App.5th 158 at p. 165 [“The moving party ‘can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the [opposing party’s] signature.”].)

Both collective bargaining agreements provide for arbitration and are not limited grievance procedures. Under both agreements, if any dispute is not resolved between the union and individual employer within three days, “the matter may be submitted by either party to a permanent Board of Adjustment created for the settlement of such disputes.” (Romeo Decl., Ex. A at § 9, ¶ 3; Ex. B at § 9, ¶ 3.) The Board of Adjustments is composed of two members named by the union, two members named by the association, and an “Impartial Arbitrator.” (Id., Ex. A at § 9, ¶ 4; Ex. B at § 9, ¶ 4.) The arbitrator is selected by the parties and is tasked with issuing a final and binding decision if the panel is unable to reach a majority vote. (Id., Ex. A at § 9, ¶¶ 4, 5(c) & (d); Ex. B at § 9, ¶¶ 4, 5(c) & (d).)

The lack of Plaintiff’s signature does not affect the CBAs’ enforceability. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 542 [“The absence of Mendez’s signature on the second collective bargaining agreement is inconsequential. Mendez does not deny that she was a member of the union.”].) “[A] member of a bargaining unit is bound by the terms of a valid collective bargaining agreement, though he is not formally a party to it and may not even belong to the union which negotiated it.” (Florio v. City of Ontario (2005) 130 Cal.App.4th 1462, 1466.) It is undisputed that Plaintiff was a member of the union. (Hernandez Decl. at ¶ 6.) Plaintiff is bound by the terms of CBAs, including the arbitration provisions.

The Scope of the CBAs Encompasses Only Some of Plaintiff’s Claims

“When a CBA includes an arbitration provision, contractual matters under a CBA are presumed arbitrable; that is, arbitration must be granted as long as the CBA is reasonably susceptible to an interpretation in favor of arbitration. [¶] However, the presumption of arbitration in a CBA does not apply to statutory violations . . . Thus, although a union representative negotiating in good faith may waive the employee’s right to pursue in a judicial forum an action for a statutorily protected right . . . the United States Supreme Court has made clear that waiver of the right to prosecute a statutory violation in a judicial forum is only effective if it is explicit, ‘ “ ‘clear and unmistakable.’ ” ’ ” (Cortez, supra, 15 Cal.App.5th at pp. 11-12, internal citations omitted.)

“ ‘In determining whether there has been a sufficiently explicit waiver, the courts look to the generality of the arbitration clause, explicit incorporation of statutory requirements, and the inclusion of specific [statutes]. The test is whether a collective bargaining agreement makes compliance with the statute a contractual commitment subject to the arbitration clause.’” (Wilson-Davis v. SSP America, Inc. (2021) 62 Cal.App.5th 1080, 1094 [quoting Vasquez v. Superior Court (2000) 80 Cal.App.4th 430, 434].) “Broad, general language is not sufficient to meet the level of clarity required to effect a waiver in a [collective bargaining agreement]. In the collective bargaining context, the parties ‘must be particularly clear’ about their intent to arbitrate statutory claims.” (Carson v. Giant Food, Inc. (1999) 175 F.3d 325, 331.)

Here, the CBAs state the grievance procedure applies to any “dispute concerning the interpretation or application of this Agreement.” (Romeo Decl., Ex. A at § 9; Ex. B at § 9.) Both CBAs also state, “[i]n addition to disputes concerning the interpretation or application of this Agreement, all claims and claims for associated penalties arising under the federal Fair Labor Standards Act, the California Labor Code, and Wage Order 16, will be resolved through procedures set forth in this Section 9; such claims may not be brought in a court of law or before any administrative agency such as the California Labor Commissioner.” (Romeo Decl., Ex.

A at § 9, ¶ 20; Ex. B at § 9, ¶ 20.) And the 2022-2027 CBA provides that “all employee disputes concerning violations of, or arising under . . . the California Labor Code Sections identified in California Labor Code Section 2699.5, as amended, the California Private Attorney General Act (Labor Code Section 2698, et. seq.), and a federal, state, and local law concerning wage-hour requirements, wage payment, and meal or rest periods, including claims arising under the Fair Labor Standards Act (hereinafter ‘Statutory Dispute’ or ‘Statutory Disputes’) shall be subject to and must be processed by the employee pursuant to the procedures set forth in Section 9 as the sole and exclusive remedy.” (Id., Ex.

B at § 9, ¶ 21.)

The first through fourth causes of action are not within the scope of the arbitration provisions in the CBAs. The CBAs make no reference to claims arising under CFRA, FEHA, or wrongful termination. As noted by the federal court on the order granting the motion to remand, Plaintiff’s wrongful termination claim derives from California public policy under CFRA and FEHA and not any grievance provisions of the CBA. (Order Granting Motion to Remand at p. 12:21-28.) Plaintiff’s reference to section 3 of the CBAs concerning Employment and Discharge and requiring the parties to comply with FEHA does not function as an explicit waiver of any such claim to arbitration. (See Reply at p. 5:8-13.) General references to state and local law are insufficient. The first through fourth causes of action are not clearly and unmistakably subject to arbitration under the arbitration provisions of either CBA.

The fifth through 10th causes of action are within the scope of the arbitration provisions in the CBAs. As already summarized, the CBAs expressly refer to the California Labor Code. Plaintiff’s fifth through 10th causes of action arise under the California Labor Code. Plaintiff sues for the failure to pay minimum wage; the failure to provide meal periods; the failure to provide rest breaks; the failure to issue accurate and itemized wage statements; the failure to pay wages due at separation; waiting time penalties; and the failure to indemnify.

To the extent Plaintiff argues the ninth and 10th causes of action are not covered by Wage Order 16, they are nevertheless brought under the Labor Code and are derivative of his other wage and hour claims. Labor Code sections 201 to 203, asserted in the ninth cause of action, are identified in Labor Code section 2699.5. Cortez is distinguishable because the CBA in Cortez did not mention the Labor Code and the claims were evaluated under Wage Order 16. (Cortez, supra, 15 Cal.App.5th at p. 14.) Because the CBAs in this case include a clear and unmistakable judicial forum waiver for claims arising under the California Labor Code, Plaintiff’s fifth through 10th causes of action are subject to arbitration.

The petition to compel arbitration is granted as to the fifth through 10th causes of action, and denied as to the first through fourth causes of action. To avoid the risk of inconsistent rulings, the court stays this action in its entirety pending the outcome of arbitration. (Code. Civ. Proc., § 1281.4; 9 U.SC. § 3.)

CONCLUSION

The motion to compel arbitration is GRANTED IN PART as to the fifth through 10th causes of action and DENIED IN PART as to the first through fourth causes of action. This action is STAYED in its entirety pending the outcome of arbitration.

The court will hold a case status review regarding arbitration on July 22, 2027, at 11:00 a.m. in Department 10.

The court will prepare the order.

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