Nevarez v. Flexport, Inc., et al.

(Stanley Mosk Courthouse: Dept. 516) September 8, 2026 DEPARTMENT 516 LAW AND MOTION RULINGS Case Number: 26STCV09519 Hearing Date: September 8, 2026 Dept: 516 Judge James I. Montgomery Department 516 Hearing Date: September 8, 2026 Case Name: Nevarez v. Flexport, Inc., et al. Case No.: 26STCV09519 Matter: Motion to Compel Arbitration and Stay Proceedings Moving Party: Defendants Integrity Staffing Solutions, Inc., and Flexport, Inc. Responding Party: Plaintiff Siriya Leala Nevarez, on behalf of herself and current and former aggrieved employees Tentative Ruling: Defendants Integrity Staffing Solutions, Inc., and Flexport, Inc.'s motion is denied.

On March 24, 2026, Plaintiff Siriya Leala Nevarez ("Plaintiff"), on behalf of herself and current and former aggrieved employees, filed her Private Attorneys General Act of 2004, Labor Code sections 2698, et seq. ("PAGA") representative action against Defendants Integrity Staffing Solutions, Inc., and Flexport, Inc. ("Defendants"). Defendants move to compel arbitration of Plaintiff's individual PAGA claims pursuant to the arbitration agreement that Plaintiff signed when she signed her onboarding paperwork. Plaintiff opposes the motion.

Legal Standard

Under both the Federal Arbitration Act and California law, arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract. (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) Code of Civil Procedure section 1281.2 authorizes the court to order arbitration of a case if it finds the parties agreed to arbitrate that dispute, "and that a party to the agreement refuses to arbitrate that controversy." (Code Civ. Proc., Sec. 1281.2, subd. (a).) Arbitration agreements should be liberally interpreted and ordered unless the agreement clearly does not apply to the dispute in question. (Weeks v. Crow (1980) 113 Cal.App.3d 350, 353; Segal v. Silberstein (2007) 156 Cal.App.4th 627, 633.)

The party moving to compel arbitration has the initial burden to (1) affirmatively admit and allege the existence of a written arbitration agreement, and (2) prove the existence of that agreement by a preponderance of the evidence. (Rosenthal v. Great W. Fin. Sec. Corp, 14 Cal. 4th 394, 413 (Rosenthal).) Once this is met, the burden shifts to the responding party to prove that the agreement is unenforceable by a preponderance of the evidence. (Ibid.)

"'Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.'" (California Correctional Peace Officers Assn. v. State¿ (2006) 142 Cal.App.4th 198, 205.)

Evidentiary Objections

Plaintiff makes seven evidentiary objections to Susan Baxter's declaration. The Court overrules all seven evidentiary objections. Defendants make eight evidentiary objections to Plaintiff's declaration. The Court overrules all eight evidentiary objections. Defendants make three evidentiary objections to Brett Szmanda's declaration. The Court overrules all three evidentiary objections.

Analysis

Defendants move to compel the arbitration of Plaintiff's individual PAGA claims against them and stay the matter pending arbitration.

Federal Arbitration Agreement

Both parties dispute whether the Federal Arbitration Act ("FAA") controls. Defendant argues that the FAA applies, but Plaintiff argues that she is exempt from the FAA. "The court's role under the Act is therefore 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.)

Here, the Arbitration Agreement ("Agreement") states that the governing law is: The Federal Arbitration Act ("FAA") (9 U.S.C. Sec. 1 et seq.) applies to this Agreement, which evidences a transaction involving commerce. If a court determines the FAA does not apply to a particular dispute or to the parties, the parties agree and stipulate that Delaware Uniform Arbitration Act will apply, and acknowledge that the Company maintains its corporate headquarters in Delaware and conducts significant business operations in Delaware. (Baxter Decl., Ex. 1, Sec. 14.) The parties expressly agreed to the provisions of the FAA.

However, Plaintiff argues that she is exempt from the FAA as a transportation worker engaged in foreign or interstate commerce. Section 1 of the FAA states that: "Maritime transactions", as herein defined, means charter parties, bills of lading of water carriers, agreements relating to wharfage, supplies furnished vessels or repairs to vessels, collisions, or any other matters in foreign commerce which, if the subject of controversy, would be embraced within admiralty jurisdiction; "commerce", as herein defined, means commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation, but nothing herein contained shall 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 (emphasis added).)

"Section 1 of the Federal Arbitration Act (FAA or Act) excludes from the Act's coverage "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." (Circuit City Stores, Inc. v. Adams (2001) 532 U.S. 105, 109 (Circuit).) The Supreme Court provided a test to determine what employees would be exempt from the FAA under the category of any other class of workers engaged in foreign or interstate commerce. (See Southwest Airlines Co. v. Saxon (2022) 596 U.S. 450, 455 (Southwest).)

The Supreme Court looked to: (1) the class or performance of work by the employee; and (2) that an employee falls in a "class of workers directly involved in transporting goods across state or international borders falls within Sec. 1's exemption." (Southwest, supra, 596 U.S. at pp. 456-57.) The Court also stated, "while we did not provide a complete definition of "transportation worker," we indicated that any such worker must at least play a direct and "necessary role in the free flow of goods" across borders. [Citation.] Put another way, transportation workers must be actively "engaged in transportation" of those goods across borders via the channels of foreign or interstate commerce." (Id. at p. 458.) "That language focuses on "'the performance of work'" rather than the industry of the employer." (Bissonnette v. LePage Bakeries Park St., LLC (2024) 601 U.S. 246, 253.)

Plaintiff cites to Ortiz v. Randstad Inhouse Services, LLC (9th Cir. 2024) 95 F.4th 1152. The Court finds that Plaintiff's reliance on Ortiz supports her argument. In Ortiz, the employee declared "his duties as follows: (1) "unloading and picking up the packages and transporting them to the warehouse racks to organize them," (2) "transport[ing] the packages to the picking section of the warehouse," (3) "assisting Pickers in obtaining packages so they could be shipped out," and (4) "assist[ing] the Outflow Department to prepare packages to leave the warehouse for their final destination." (Ortiz v.

Randstad Inhouse Services, LLC (9th Cir. 2024) 95 F.4th 1152, 1158.) However, the Court concluded that while the Court correctly assumed that plaintiff was not "involved in unloading shipping containers upon their arrival or loading them into trucks when they left the warehouse," he was involved in the handling of products at the heart of the supply chain. (Id. at p. 1161.)

Plaintiff declares that as a Material Handler she "regularly sorted and physically moved merchandise throughout the warehouse." (Nevarez Decl., P. 5.) She specifically moved pallets full of merchandise to the warehouse loading and staging area. (Ibid.) She handled products manufactured outside California. (Nevarez Decl., P.P. 6-10.) Thus, the FAA does not apply because Plaintiff is exempt from the FAA.

Existence of a Valid Agreement

Defendants seek to compel arbitration under the 2025 Agreement. In support of the existence of the Agreement, Defendants submit as evidence the executed Agreement signed by Plaintiff on July 10, 2025. The Agreement states that: . . . the Company and I mutually agree to resolve by arbitration all disputes, claims or controversies, past, present or future, including without limitation, claims arising out of or related to my application for employment, employment, and/or the termination of my employment that the Company may have against me or that I may have against the Company, or its · officers, directors, employees, or agents in their capacity as such or otherwise, · benefit plans or the plans' sponsors, fiduciaries, administrators, affiliates and agents, · customers and clients, including the customers and clients to which I am assigned to work, · successors and assigns, each and all of which may enforce this Agreement as direct or third-party beneficiaries. (Baxter Decl., Ex. 1, Sec. 2.)

Plaintiff does not dispute that she signed the agreement. At this point in the analysis to establish the existence of an agreement to arbitrate, it is sufficient for the defendants to provide a copy of the arbitration agreement or state the paragraph verbatim.¿(See Rosenthal, supra, 14 Cal. 4th at p. 413; Cal. Rules of Court, Rule 3.1330.) The court need not make an evidentiary determination of its validity at this stage. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846 (Ruiz); Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219 (Condee).) Thus, Defendant has met its burden.

PAGA Claim

Plaintiff argues that her individual claim is not subject to arbitration. The PAGA provisions in the Agreement state, 8. CALIFORNIA PRIVATE ATTORNEYS GENERAL ACT ("PAGA") INDIVIDUAL ACTION REQUIREMENT. You and the Company agree to arbitrate PAGA claims on an individual basis only. Therefore, any claim by You under PAGA to recover for unpaid wages, civil penalties, or other individual relief must be arbitrated under this Agreement (the "PAGA Individual Action Requirement"). You and the Company also agree and stipulate that any non-individual PAGA claims shall be stayed in the trial court, pending a final determination and written decision by the arbitrator in arbitration with respect to your alleged status as an "aggrieved employee," and you and the Company agree that the arbitrator, and not the court, will make this determination.

The arbitrator is without authority to preside over any PAGA claim by you on behalf of any other person or joined by or consolidated with another person's or entity's PAGA claim. This PAGA Individual Action Requirement clause will be severable from this Agreement if there is a final judicial determination that it is invalid, unenforceable, unconscionable, void or voidable. In such case, the PAGA action must be litigated in a civil court of competent jurisdiction--not in arbitration--but the portion of the PAGA Individual Action Requirement that is enforceable shall be enforced in arbitration. . . .

15. CONSTRUCTION: Except as provided in the Class and Collective Action Waivers and the California Private Attorneys General Act ("PAGA") Individual Action Requirement section above, if any provision of this Agreement is adjudged to be void, voidable or otherwise unenforceable, in whole or in part, such provision will, without affecting the validity of the remainder of the Agreement, be: (i) modified to the extent necessary to render such term or provision enforceable preserving to the fullest extent possible the intent and agreements herein, or (ii) to the extent such modification is not permissible, severed from this Agreement. All remaining provisions will remain in full force and effect. (Baxter Decl., Ex. 1, Sec.Sec. 8, 15 (italics added).)

Plaintiff cites to Iskanian and Villalobos to argue that Defendants cannot compel her to arbitrate her individual claims under PAGA. The Court agrees. In Iskanian, the Court held that where "an employment agreement compels the waiver of representative claims under the PAGA, it is contrary to public policy and unenforceable as a matter of state law." (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384.) In Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, the United States Supreme Court held that "the FAA preempts the rule of [Iskanian] insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate." (Id. at p. 662.)

But, in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, the California Supreme Court confirmed that Viking River allowed PAGA claims to be split into individual and non-individual claims. (Id. at p. 1118.) However, here, where the FAA does not apply, "'an employee's predispute agreement to arbitrate PAGA claims is not enforceable without the state's consent' . . . - has not been overruled." (Villalobos v. Maersk, Inc. (2025) 114 Cal.App.5th 1170, 1199.) Defendants do not address these arguments in their motion or reply. Thus, because the FAA does not apply, Plaintiff cannot be compelled to arbitrate her individual claim. Because the Court has determined that there is no existence of an arbitrable issue regarding Plaintiff's individual PAGA claim, the Court will not address the issue of unconscionability.

Stay of Proceedings

Code of Civil Procedure section 1281.4 provides that if the court has ordered the arbitration of a controversy, it "shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies."¿ (Code Civ. Proc., Sec. 1281.4.) ¿ Thus, the Court denies Defendants' motion to stay the proceedings.

Conclusion

Defendant's motion to compel arbitration is denied.

Case Number: 26STCV17056 Hearing Date: September 8, 2026 Dept: 516 Judge James I. Montgomery Department 516 Hearing Date: September 8, 2026 Case Name: Lopez Avarado v. Pliego Case No.: 26STCV17056 Motion: Motion to be Relieved as Counsel Moving Party: Counsel for Plaintiff Jerry Lopez Alvarado Opposing Party: None Tentative Ruling: The Motion to be Relieved as Counsel is granted.

Plaintiff's counsel - Matthew K. Joy - seeks to be relieved as counsel of record for Plaintiff Jerry Lopez Alvarado. No opposition was filed. Counsel Matthew K. Joy has complied with all statutory and procedural requirements.