Abraham Olan v. Simplified Driver Staffing LLC

amend as to the sixth cause of action. Defendant Wal-Mart's demurrer to the ninth cause of action is overruled. The Court hereby orders Defendant Wal-Mart to file its answer within 21 days.

8 - Abraham Olan v. Simplified Driver Staffing LLC Defendant Simplified Driver Staffing LLC's Motion to Compel Arbitration and Stay Action Defendant Simplified Driver Staffing LLC moves to compel arbitration of this action brought against it by Plaintiff Abraham Olan. Defendant also asks the Court to stay this action pending arbitration. Existence of Agreement The party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties. (CCP Sec. 1281.2.)

It can meet the "initial burden to show an agreement to arbitrate by attaching a copy of the arbitration agreement purportedly bearing the opposing party's signature." (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.) "At this step, a movant need not 'follow the normal procedures of document authentication' and need only 'allege the existence of an agreement and support the allegation as provided in' " California Rules of Court, rule 3.1330. (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755.)

Here, Defendant meets its initial burden by attaching a copy of the arbitration agreement. (Perez Decl., Ex. 1.) On the bottom of the fifth page, Plaintiff's electronic signature appears. (Id., at p. 5.) Defendant meets its burden. Plaintiff disputes that he ever signed the agreement. (Olan Decl., P.P. 5-7.) Plaintiff argues that Defendant does not meet its burden of showing that the electronic signature is his. The Court disagrees. Defendant provides substantial evidence showing Plaintiff himself signed the agreement.

Laiza Perez, Defendant's Human Resources Assistant, clearly attests that she is "personally familiar with Simplified's. . . record-keeping practices with respect to personnel and other employment-related records and have the authority to certify those records." (Perez Reply Decl., P. 2.) S he states that the arbitration agreement was signed through the TempWorks system, which requires the user to create a unique username and password. (Id., P.P. 6-7.) She attests she is "personally familiar with the TempWorks system, how it works, and the process that Simplified employees and employment candidates go through using the TempWorks system to review certain Simplified policies and procedures, provide employment-related information and have them complete, sign and acknowledge receipt of various employment-related documents." (Id., P. 5.)

Perez submits an HR Center Data Log that shows Plaintiff's review and signature process in connection with several employment documents, including

the arbitration agreement. (Id., P. 13; see also Ex. 3.) This evidence is sufficient to authenticate the agreement and establish that Plaintiff signed the agreement. Delegation Clause "Parties to an arbitration agreement may agree to delegate to the arbitrator, instead of a court, questions regarding the enforceability of the agreement. [Citation.] They 'can agree to arbitrate almost any dispute--even a dispute over whether the underlying dispute is subject to arbitration.' " (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 241.) "There are two prerequisites for a delegation clause to be effective.

First, the language of the clause must be clear and unmistakable. [Citation.] Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability." (Id. at p. 242.) Here, the agreement does not include a clear and unmistakable delegation clause. Defendant argues that the agreement's incorporation of the AAA rules, which in turn provide that an arbitrator has the power to rule on all arbitrability issues, constitutes a clear and unmistakable agreement to delegate.

The Court disagrees. "[I]n the context of a mandatory arbitration agreement between an employer and an hourly worker, that the incorporation of the rules of an arbitration provider - without expressly specifying in the parties' agreement that under those rules the arbitrator will decide the scope and validity of the arbitration agreement - is not clear and unmistakable evidence of the parties' intent to have those issues decided by the arbitrator." (Villalobos v. Maersk, Inc. (2025) 114 Cal.App.5th 1170, 1178.)

Here, neither the four-page "Mutual Arbitration Policy" nor the "Employee Agreement to Arbitrate" reference any delegation clause. Thus, there is insufficient evidence showing the parties mutually agreed to delegate gateway issues of arbitrability to the arbitrator. Federal Arbitration Act - Transportation Worker Exemption Plaintiff argues the Federal Arbitration Act (FAA) does not apply because he falls into the transportation worker exemption to the act. He further contends that because the FAA transportation worker exemption applies, the FAA does not preempt application of California Labor Code 229.

The Court agrees. The FAA does not "apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." (9 U.S.C. Sec. 1.) "[A] transportation worker's employment agreement does not become subject to the FAA simply because the agreement declares that it is subject to the FAA. By stating that it is subject to and governed by the FAA, the agreement necessarily incorporates section 1 of the FAA, which includes the exemption for transportation workers." (Garrido v.

Air Liquide Industrial U.S. LP (2015) 241 Cal.App.4th 833, 839-840.) Plaintiff meets his burden of showing he belonged to "a class of workers engaged in foreign or interstate commerce." (9 U.S.C. Sec. 1.) "The party opposing

arbitration bears the burden of demonstrating that the exemption applies." (Performance Team Freight Systems, Inc. v. Aleman (2015) 241 Cal.App.4th 1233, 1241.) This exemption does not require the employee to "work for a company in the transportation industry." (Bissonnette v. LePage Bakeries Park St., LLC (2024) 601 U.S. 246, 252.) Instead, "a transportation worker is one who is 'actively' ' "engaged in transportation" of ... goods across borders via the channels of foreign or interstate commerce.' [Citation.]

In other words, any exempt worker 'must at least play a direct and "necessary role in the free flow of goods" across borders.' " (Id. at p. 256.) The transportation worker exception "emphasizes the actual work that the members of the class, as a whole, typically carry out." (Southwest Airlines Co. v. Saxon (2022) 596 U.S. 450, 456.) Plaintiff declares that he worked as a commercial truck driver. (Olan Decl., P. 2.) Plaintiff testifies, "My duties included picking up containers or cargo from the Ports of Los Angeles and Long Beach and transporting that cargo to Defendant's yards and customer facilities.

I transported cargo for [sic] or to facilities associated with customers such as Amazon, Target, and Starbucks. My assignments included long-distance routes within California and routes to destinations outside California, including Las Vegas, Nevada. . . . I understood that at least some of the cargo had arrived from or was destined for locations outside California." (Id., P.P. 17-20.) Plaintiff was personally engaged in the transportation of goods across borders; thus, the Court finds that the FAA does not apply.

As such, Labor Code section 229 is not preempted. Labor Code Section 229 Plaintiff argues that his fifth cause of action for wages due at separation and his fifteenth cause of action for violation of unfair competition law "to the extent derivative of that wage claim" should remain in this Court, because they are not arbitrable under Labor Code section 229. Here, the Court agrees that Plaintiff's fifth cause of action is not arbitrable under Labor Code section 229. Labor Code section 229 provides that a cause of action that seeks to collect "due and unpaid wages" pursuant to Labor Code sections 200 through 244 can be maintained in court, despite an agreement to arbitrate. (Khalatian v.

Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 656.) However, this includes recovery of only the unpaid wages themselves, not any waiting-time penalties under section 203. (See Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 684.) Therefore, to the extent the fifth cause of action seeks only unpaid wages, it is not arbitrable. However, Plaintiff's cause of action for unfair competition is arbitrable. In Lane, supra, 224 Cal.App.4th at p. 684, the appellate court held that a claim for unfair competition is not subject to Section 229's arbitration exclusion.

Unconscionability Plaintiff argues the agreement is unconscionable. "Both procedural and substantive unconscionability must be shown for the defense to be established,

but 'they need not be present in the same degree.' " (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125 (OTO).) "The burden of proving unconscionability rests upon the party asserting it." (Id. at p. 126.) A. Procedural Unconscionability Plaintiff shows minimal procedural unconscionability. " 'The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power.' " (OTO, supra, 8 Cal.5th at p. 125.) The "analysis 'begins with an inquiry into whether the contract is one of adhesion.' [Citation.]

An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power 'on a take-it-or-leave-it basis.' " (Id. at p. 126.) For an adhesive contract, the court must consider "whether circumstances of the contract's formation created such oppression or surprise that closer scrutiny of its overall fairness is required." (Ibid.) " ' " ' Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form.' " ' " (Ibid.)

While Plaintiff argues in his memorandum of points and authorities that the agreement was presented on a take-it-or-leave it basis and there was no opportunity to negotiate its terms, Plaintiff's attached declaration states that he has no memory of the agreement at all. Specifically, he states: "I was never shown or provided with the Mutual Arbitration Policy during my employment. I did not review that policy or sign any acknowledgment stating that I had received or reviewed it." (Olan Decl., P. 8.)

To the extent the agreement actually was a condition of employment such that it needed to be signed in order to submit his employment documents, this alone presents only minimal procedural unconscionability under the circumstances. An arbitration agreement offered on a "take it or leave it basis" does not render the agreement unenforceable. (See Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105, 1127.) Plaintiff also argues that the agreement is procedurally unconscionable because the applicable AAA arbitration rules were not attached to the arbitration agreement and were only incorporated by reference.

Failing to attach the arbitration rules is procedurally unconscionable only when those rules themselves are unfair. (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1246.) Here, rules published by the American Arbitration Association are widely used and generally accepted as fair. Moreover, the AAA rules are "easily accessible to the parties" because they "are available on the Internet." (Lane, supra, 224 Cal.App.4th at p. 691 [discussing AAA rules].) Moreover, the agreement itself directs the employees to AAA's website for an electronic copy of the rules and the Human Resources department for a physical copy. (Perez Decl., Ex. 1, at p. 5.)

B. Substantive Unconscionability Plaintiff identifies one substantively unconscionable provision. "Substantive unconscionability

examines the fairness of a contract's terms." (OTO, supra, 8 Cal.5th at p. 129.) " '[T]he unconscionability doctrine is concerned not with "a simple old-fashioned bad bargain" [citation], but with terms that are "unreasonably favorable to the more powerful party." ' " (Id. at p. 130.) The agreement states, "Further, Company and I agree to forego and waive any right to join or consolidate claims in arbitration with others or to bring non-individual, collective or class claims in arbitration, unless such procedures are agreed to by both Company and me." (Perez Decl., Ex. 1, at p. 5.)

A clause prohibiting employees from bringing class or collective actions is substantively unconscionable because " only employees bring [such claims] against employers." (Navas v. Fresh Venture Foods, LLC (2022) 85 Cal.App.5th 626, 636.) Also, to the extent the agreement seeks to waive representative PAGA claims, it is unconscionable. It is substantively unconscionable to require employees "to waive any right to bring a representative action under the Labor Code Private Attorneys General Act of 2004 ... despite the fact that 'an employee's right to bring a PAGA action is unwaivable.' " (Najarro v.

Superior Court (2021) 70 Cal.App.5th 871, 882.) This unconscionable provision is severable. "The strong legislative and judicial preference is to sever the offending term and enforce the balance of the agreement" unless the agreement is "permeated by unconscionability." (Lange v. Monster Energy Company (2020) 46 Cal.App.5th 436, 453, internal quotes, citations, and alterations omitted.) Here, the agreement contains a severability clause and is not permeated by unconscionability. The Court will therefore sever the offending waiver.

Plaintiff also argues that the agreement is one-sided because it states that "the AAA Rules may be modified from time to time." This is not one-sided; it simply states that AAA, not Defendant, may modify the rules. In fact, the agreement provides "I further acknowledge that the mutual obligation to arbitrate may not be modified or rescinded except by mutual consent of both me and the Company." (Perez Decl., Ex. 1, at p. 5.) Plaintiff argues that the agreement's provision prohibiting Plaintiff from arbitrating worker's compensation and unemployment claims is unconscionable.

The Court disagrees. "Workers' compensation and unemployment benefits are governed by their own adjudicatory systems; neither is a proper subject matter for arbitration." (Mercuro v. Superior Court (2002) 96 Cal.App.4th 167, 176.) Excluding such claims from arbitration is merely a statement of the law.

Disposition

Defendant Simplified Driver Staffing LLC's motion to compel arbitration is granted in part. The parties are ordered to arbitrate this case, with the exception of the fifth cause of action for recovery of unpaid wages. The case is hereby stayed pending resolution of the arbitration proceeding. Once the arbitration is complete, the parties can request that the stay be lifted so Plaintiff can pursue the fifth cause of

action. The Court hereby severs the following provision from the agreement: "Further, Company and I agree to forego and waive any right to join or consolidate claims in arbitration with others or to bring non-individual, collective or class claims in arbitration, unless such procedures are agreed to by both Company and me." (Perez Decl., Ex. 1, at p. 5.) | Home -->)" -->