Memorandum Points and AuthoritiesCal. Super. - 6th Dist.February 24, 2020PAUL V. SIMPSON, BAR NO. 83878 psimpson@sgijlaw.com MATTHEW A. MALLET, BAR NO. 203393 mmallet@sgiilaw.corn SIMPSON, GARRITY, INNES & JACUZZI Professional Corporation 601 Gateway Boulevard, Suite 950 South San Francisco, California 94080 Telephone: (650) 615-4860 Fax: (650) 615-4861 Attorneys for Defendant Drill Tech Drilling &Shoring, Inc. SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SANTA CLARA IZAYA JOHNSON, on behalf of himself, all ) others similarly situated, ) ) Plaintiff, ) ) v. ) ) DRILL TECH DRILLING & SHORING, ) INC.; a California corporation; and DOES 1 ) - 50, inclusive, ) ) Defendants. ) ) ) ) ) ) ) ) ) ) ) 132606-23 00520544_DOCX 1 1 Case No. 20CV363895 ASSIGNED FOR ALL PURPOSES TO THE HON. PATRICIA M. LUCAS DEPT. 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT DRILL TECH DRILLING & SHORING, INC.'S PETITON TO COMPEL ARBITRATION Date: January 27, 2021 Time: 1:30 p.m. Dept.: 3 Complaint Filed: February 24, 2020 FAC Filed: April 27, 2020 Trial Date: Not Yet Set MPA ISO PETITION TO COMPEL ARBITRATION Electronically Filed by Superior Court of CA, County of Santa Clara, on 11/9/2020 3:51 PM Reviewed By: R. Walker Case #20CV363895 Envelope: 5266124 20CV363895 Santa Clara - Civil TABLE OF CONTENTS Page No. I. INTRODUCTION 1 II. SUMMARY OF FACTS 2 A. Drill Tech's Business and Johnson's Employment. 2 B. The Relevant CBA Arbitration Provisions. 3 C. Plaintiff Files a Lawsuit and Refuses to Honor the Arbitration Agreement. 4 III. LEGAL ARGUMENT 7 A. Federal and California Law Favor Arbitration. 7 1. The Federal Arbitration Act creates a strong presumption in favor of arbitration. 7 2. California law favors enforcement of arbitration agreements. 8 B. A Valid Agreement to Arbitrate, Negotiated by Plaintiff's Exclusive Bargaining Representative, Existed. 9 C. Defendant Did Not Waive Its Right to Compel Arbitration 10 1. Plaintiff has not been prejudiced by Defendant seeking to compel arbitration 12 IV. CONCLUSION 13 {32606-2.3 00520544.DOCX 1 1 TABLE OF CONTENTS TABLE OF AUTHORITIES Page No. Cases 14 Penn Plaza LLC v. Pyett (2009) 556 U.S. 247; 29 U.S.C.S. §159(a) 9 American Express Co. v. Italian Colors Restaurant (2013) 570 U.S. 228 9 AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28 Cal. App. 5th 923 10 Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Cal. 4th 83 8 AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 7 AT&T Tech., Inc. v. Commun. Workers of Am. (1986) 475 U.S. 643 8 Berman v. Health Net (2000) 80 Ca1.App.4th 1359 12 Bigler v. Harker Sch. (2013) 213 Cal.App.4th 727 8 Christensen v. Dewor Developments (1983) 33 Ca1.3d 778 12 Coast Plaza Doctors Hosp. v. Blue Cross of Calif. (2000) 83 Cal. App. 4th 677 8 Communications Workers v. Beck (1988) 487 U.S. 735 9 Cortez v. Doty Bros. Equipment Co. (2017) 15 Ca1.App.5w 1 9-10 Green Tree Fin. Corp. v. Randolph (2000) 531 U.S. 79 7 Groom v. Health Net (2000) 82 Cal.App.4th 1189 12 Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193 10 Kilgore v. KeyBank, N.A. (9th Cir. 2012) 673 F.3d 947 7 (32606-2.3 00520544.DOCX 1 1 - ii - TABLE OF AUTHORITIES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Lewis v. Fletcher Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436 11 Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534 9 Mission Viejo Emerg. Med. Assocs. v. Beta Healthcare Group, (2011) 197 Cal. App. 4th 1146 8 Moses H Cone Mem. Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1 7, 8 Peterson v. Shearson/American Exp., Inc. (10th Cir. 1988) 849 F.2d 464 11 Rosenthal v. Great W. Fin. Sec. Corp. (1996) 14 Cal.4th 394 8 Sobremonte v. Superior Court (1998) 61 Ca1.App.4th 980 11, 12 St. Agnes Medical Center v. PacifiCare of California (2003) 31 Ca1.4th 1187 10-11, 12, 13 Steelworkers v. Warrior & Gulf Nay. Co. (1960) 363 U.S. 574 9 Statutes California Business & Professions Code 17200 et seq 1, 5 California Code of Civil Procedure § 1281.2 California Labor Code § 201 § 202 § 203 §204 § 212 § 223 §226 1, 1, 1, 3, 5, 4, 5, 8,9 5 5 10, 13 4 3 10, 13 10, 13 § 226.7 1, 4 § 510 1, 4 § 512 1, 4 § 1194 1, 4, 10, 13 § 1197 1, 4, 10, 13 § 1198 1, 4, 10, 13 § 2698 1, 5 § 2699.6 1, 4, 6 § 2802 1, 5. 10, 13 {32606-23 00520544.DOCX 1 TABLE OF AUTHORITIES Other Authorities 9 U.S.0 § 1 7 9 U.S.0 § 2 7, 8 29 U.S.C.S. §159(a) 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 132606-2.3 00520544.DOCX 1 1 - iv - TABLE OF AUTHORITIES I. INTRODUCTION Plaintiff Izaya Johnson ("Plaintiff' or "Johnson"), a union cement mason, filed this lawsuit as class action against his former union signatory employer, Drill Tech Drilling & Shoring, Inc. ("Drill Tech" or the "Company") seeking relief for alleged: failure to provide meal periods (Labor Code Sections 226.7, 512 and 1198); failure to provide rest periods (Labor Code Sections 226.7 and 1198); unpaid overtime and unpaid minimum wages and paying lower wages than required by contract or statute while purporting to pay legal wages (Labor Code Sections 223, 510, 1194, 1197 and 1198; failure to indemnify (Labor Code Section 2802); pay statement violations (Labor Code Section 226); waiting time penalties associated with the failure to be paid wages due upon termination (Labor Code Section 203); and derivative claims arising under California's unfair competition law ("UCL") (Business & Professions Code Section 17200 et seq.) and the Private Attorney General Act ("PAGA") (Labor Code Section 2698 et seq.). At the time of his termination, however, Plaintiffs employment was subject to a collective bargaining agreement ("CBA") which provided for binding arbitration of disputes for certain Labor Code statutory claims. The CBA also provided a separate grievance procedure for specific contractual claims.' Here, Defendant seeks arbitration of certain of Plaintiffs statutory claims for: unpaid minimum wages or "off the clock work" (Labor Code Sections 1194, 1197 and 1198); failure to indemnify (Labor Code Section 2802); pay statement violations (Labor Code Section 226(a)); waiting time penalties associated with the failure to be paid wages due upon termination (Labor Code Section 203); paying lower wages than required by contract or statute while purporting to pay legal wages (Labor Code Sections 223); and claims arising under the UCL insofar as those claims are derivative of the aforementioned alleged Labor Code claims as there is an enforceable mandatory 1 Plaintiffs alleged Labor Code causes of action for failure to provide meal and rest periods, failure to provide overtime wages, and his derivative UCL claims all fail to state a cause of action as a matter of law based on California Labor Code statutory carveouts for certain union employees, like Johnson, covered by a valid CBA with the requisite provisions. Plaintiffs PAGA claim also fails to state a cause of action as a matter of law as provided by Labor Code Section 2699.6. given a valid PAGA waiver in the 2019-2023 CBA. These claims are not subject to the mandatory arbitration process that is the subject of Defendant's Petition to Compel. Defendant has requested that Plaintiff voluntarily dismiss these claims. If not dismissed , Defendant intends to file a summary judgment or, in the alternative, summary adjudication of the claims after the Court rules on its petition to compel arbitration of certain statutory claims. (32606-2.3 00520544.DOCX 1 1 - 1 - MPA ISO PETITION TO COMPEL ARBITRATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 arbitration agreement as this case is still in the nascent stage of litigation, and Plaintiff has suffered no prejudice, Defendant's petition to compel arbitration should be granted. II. SUMMARY OF FACTS A. Drill Tech's Business and Johnson's Employment. Defendant Drill Tech, a California corporation, is a full service engineering contractor founded in 1994. The Company specializes in tunneling, shafts, deep foundation, ground improvement, and earth retention in both private and public works construction projects. (Declaration of Shannon Creson ("Creson Decl."), ¶2.) Johnson was at all relevant times employed in a "construction occupation" as a union cement mason on the Peninsula Corridor Electrification Design-Build Project, part of California's High-Speed Rail Project ("Project"), which was a public works construction project. (Id., ¶3.) During Johnson's employment with Drill Tech, the Company was bound to a Project Labor Agreement ("PLA") which incorporated construction union master labor agreements between the District Council of Plasterers' and Cement Masons' of Northern California and its affiliate local unions, including Cement Masons Local 300, and Associated General Contractors of California, Inc. ("AGC"). (Id., ¶4, Exh. A.) Johnson's employment at Drill Tech spanned two such agreements, the 2016-2019 AGC/Cement Masons Master Labor Agreement (the "2016 - 2019 Agreement") and the 2019-2023 AGC/Cement Masons Master Labor Agreement (the "2019 - 2023 Agreement"). (Id., ¶4, Exhs. B and C.) Johnson was a member of the District Council of Plasterers and Cement Masons of Northern California, Local 300 ("Local 300") and was dispatched to Drill Tech as a union cement mason by Local 300 to start work on the Project in November 2017. Johnson was employed by Drill Tech as a union cement mason on the Project from on or about November 30, 2017 through July 18, 2019. His terms and conditions of employment were covered by the PLA and the 2016 - 2019 and 2019 - 2023 Cement Masons Master Labor Agreements. (Id., ¶5; Plaintiff Izaya Johnson's Responses to Defendant Drill Tech Drilling & Shoring, Inc.'s Request for Admission (Set One), Response to Request for Admission ("RRFA") No. 5, which is attached to the Declaration of Paul V. Simpson ("Simpson Decl.") as Exhibit A.) {32606-2.3 00520544 DOCX 1 1 - 2 - MPA ISO PETITION TO COMPEL ARBITRATION B. The Relevant CBA Arbitration Provisions. The AGC/Cement Masons Master Labor Agreements under which Johnson was employed provided for binding arbitration of disputes concerning application or interpretation of the Agreement. Section 5 of the 2016 - 2019 Agreement is entitled "Grievance Procedure." It provides that "[a]ny dispute concerning any application or interpretations of this Agreement, other than jurisdictional disputes as referenced in Section 6, shall be subject to the following procedure: ..." It then elaborates, in subsections A through J, the steps taken in the event a dispute arises on a job. First, the dispute is to be reported to the individual employer or to the business agent of the appropriate local Union or District Council who would attempt to adjust the grievance or dispute at the jobsite level. If the grievance or dispute is not satisfactorily adjusted at that level, then within three days the matter may be submitted to a permanent Board of Adjustment created for the settlement of such disputes. The Board of Adjustment is composed of two members named by the Union, two members named by the employer, and an impartial arbitrator. If at any point during the proceedings the panel is unable to reach a majority vote, the arbitrator then participates and his or her decision is final and binding. (Creson Decl.), ¶4. Exh. B. §5 at pp. 12 - 13.) The 2016 - 2019 Agreement was in effect from July 1, 2016 through June 30, 2019. (Creson Decl., ¶4. Exh. B §18 at p. 18.) The 2019 - 2023 Agreement, subsections A through J, reads the same as the 2016 - 2019 Agreement. (Creson Decl., ¶4. Exh. C §5 at pp. 14 - 16.) However, the 2019 - 2023 Agreement added an important subsection K, which reads: In addition to claims for meal period and rest period violations governed by Section 7, the following claims and claims for associated penalties shall be resolved exclusively through the procedures set forth in this Section 5, and shall not be brought in a court of law or before any administrative agency such as the California Labor Commissioner: all claims arising under the Fair Labor Standards Act, the California Labor Code and the Industrial Welfare Commission Orders for: unpaid wages, e.g., claims for hours worked off the clock, overtime wages, minimum wages, incorrect rate(s) of pay and travel time; heat illness recovery violations; waiting time penalties; reimbursement of expenses, e.g., tools, cell phone charges, mileage and subsistence; recordkeeping of personnel files, time records and payroll records; in violation of Labor Code Sections 212 and 226. (32606-2.3 00520544.DOCX 1 } - 3 - MPA ISO PETITION TO COMPEL ARBITRATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (Creson Decl., ¶4. Exh. C §5. K. at pp. 15 - 16.) In addition, subsection K includes a second paragraph, which reads: For rest period and meal period claims, time limit for bringing such claims is the time limit for bringing grievances under this Section 7. For all other claims covered by Section 5, the intent of the parties is to use the shortest time limit permitted by applicable law, as determined by the arbitrator. All substantial and procedural rights applicable to mandatory arbitration of employment claims shall be observed (e.g., the right to more than minimal discovery, payment of costs by the employer, a written award, etc.). The permanent arbitrator shall manage all such claims with due regard for the rights of the employees and the inherent advantages of arbitration over court proceedings. (Creson Decl., ¶4. Exh. C §5. K. at p. 16.) Thus, Section 5.K. sets up dual processes for arbitration of grievances, depending on whether the grievances relate to certain state and federal statutory claims and other non-statutory contractual rights, such as meal period, rest period and overtime provisions of the collective bargaining agreement. The 2019-2023 CBA also provides a contractual basis for addressing PAGA claims.2 The 2019 - 2023 Agreement took effect as of July 1, 2019 and shall remain in effect until June 30, 2023. (Creson Decl., ¶ 4, Exh. C, §18 at p. 32.) This was the Agreement in effect when Plaintiff left Defendant's employment on July 18, 2019. C. Plaintiff Files a Lawsuit and Refuses to Honor the Arbitration Agreement. Johnson never pursued any grievance against Drill Tech under the applicable CBAs. (RFA, No. 21 at Simpson Decl., Exh. A.) Instead, Plaintiff filed his original class action Complaint against Drill Tech on February 20, 2020, and a First Amended Complaint ("FAC"), the operative complaint, on April 27, 2020. (FAC, at Simpson Decl., Exh. B.) The FAC contains eight causes of action, including: (1) failure to provide meal periods (Labor Code §§ 204, 223, 226.7, 512 and 1198); (2) failure to provide rest periods (Labor Code §§ 204, 223, 226.7 and 1198); (3) failure to pay hourly and overtime wages (Labor Code §§ 223, 510, 1194, 1197 and 1198); (4) failure to 2 The 2019 - 2023 Agreement added Attachment G, entitled "Private Attorney General Act Waiver / Arbitration Claims." This waiver includes the necessary provisions required under Labor Code Section 2699.6 for a statutory carveout of PAGA claims by union employees in the construction industry covered by valid CBAs with the requisite terms. (Creson Decl., ¶4. Exh. C, Attachment G at p. 40.) 132606-2.3 00520544.DOCX 1 1 - 4 - MPA ISO PETITION TO COMPEL ARBITRATION indemnify (Labor Code § 2802); (5) failure to provide accurate written wage statements (Labor Code § 226); (6) failure to timely pay all final wages (Labor Code §§ 201 - 203); (7) unfair competition (Business & Professions Code §§ 17200 et seq.); and (8) civil penalties (Labor Code §§ 2698 et seq.). Defendant served its Answer to the FAC on June 30, 2020, alleging Failure to Exhaust as its twentieth affirmative defense. (Answer to First Amended Complaint ("Answer"), at Simpson Decl., Exh. C.) This affirmative defense stated: Defendant is informed and believes, and based upon such information and belief alleges, that the FAC, and each and every purported cause of action alleged therein, is barred, in whole or in part, because Plaintiff failed to timely and completely exhaust his requisite administrative and/or contractual remedies available to him under applicable Collective Bargaining Agreements, the California Labor Code or other provisions of law prior to commencing this action. Defendant raised a twenty-first affirmative defense of Failure to Grieve. This affirmative defense stated: Defendant alleges that the FAC and each cause of action set forth therein, or some of them, cannot be maintained against Defendant because Defendant alleges that Plaintiff and/or putative class members failed to grieve and arbitrate their claims despite a clear and unmistakable requirement in the applicable collective bargaining agreements to do so, and thereby failed to exhaust their contractual remedies. (Ibid.) Before the filing and service of Defendant's Answer, there was one Case Management Conference ("CMC") (with a second scheduled for November 4, 2020), an exchange of letters and emails between counsel, and the propounding of and response to written discovery (e.g., Requests for Admission, Requests for Production of Documents and Interrogatories). No depositions have been taken. (Simpson Decl., ¶5.) On October 1, 2020, Defendant's counsel Paul V. Simpson emailed Plaintiff's counsel Shaun Setareh advising him that the CBA in effect at the time of Plaintiffs termination on July 18, 2019 (i.e., the 2019 - 2023 Agreement) required the mandatory arbitration of all claims asserted in Plaintiff's civil action. Defendant's counsel advised that absent Plaintiff's agreement to either seek dismissal of the civil action without prejudice or an agreement to stipulate to an {32606-2.3 00520544.DOCX 1 I - 5 - MPA ISO PETITION TO COMPEL ARBITRATION arbitration of all claims pursuant to the terms of the 2019 - 2023 Agreement, Defendant would move to compel arbitration. (Simpson Decl., ¶6, Exh. D.) Simpson did not hear back from Setareh until receiving an email on October 9, 2020, wherein Plaintiffs counsel did not agree to dismiss the civil action without prejudice or to stipulate to arbitration of all claims. Instead, Plaintiff's counsel responded: "There is a clear waiver here and there are other defenses to the enforceability of the arbitration agreement. All rights reserved." (Id., ¶7.) Simpson responded that same day, stating "I do not believe there is a waiver as the case is in its seminal stage and Plaintiff has suffered no prejudice. If you believe you have substantive defenses to enforceability, let me know and I will consider them before filing the motion. Until then, we will have to agree to disagree." Defendant has not received a subsequent, let alone a substantive, response from Plaintiff detailing Plaintiffs perceived defenses to the enforceability of the arbitration agreement. (Id., ¶8.) Defendant's counsel subsequently wrote to Plaintiffs counsel to explain why several of Plaintiff's claims fail to state a cause of action and should be dismissed and others are subject to mandatory arbitration under the 2019-2023 Agreement. In the letter, dated October 16, 2020, Simpson explained that Plaintiff's causes of action for failure to provide meal and rest periods, and failure to provide overtime wages all fail to state a cause of action as a matter of law, as does Plaintiff's UCL claim to the extent the allegations are based on meal period, rest period and overtime claims, based on California Labor Code statutory carveouts for union employees, like Johnson, covered by a valid CBA with the requisite provisions. (Id., ¶9, Exh. E.) Simpson also explained that the PAGA cause of action is barred by Labor Code Section 2699.6. (Ibid.) Simpson wrote: "To limit the disputed claims without expending unnecessary time, expense and court involvement, I respectfully request you consider the legal points set forth herein. And, if you concur with our analysis, agree to dismiss them from the lawsuit before our next case management conference..." Defendant did not receive a substantive response to this letter. (Ibid.) On November 4, 2020, one day after the second CMC, Simpson again wrote to Plaintiff's counsel, William Pao and Setareh, asking if Plaintiff would agree to arbitration pursuant to Section 5.K. of the 2019 - 2023 Agreement and indicated that, if not, Defendant would file a Petition to Compel Arbitration. (Id., ¶10, Exh. E.) Pao responded later that same day indicating 132606-23 00520544.DOCX 1 1 - 6 - MPA ISO PETITION TO COMPEL ARBITRATION Plaintiff's position was that Plaintiff was not subject to mandatory arbitration and not barred from pursuing his claims in court by means of a class action as there was no express class action waiver. Plaintiff's counsel also addressed the viability of Plaintiff's PAGA claim and again argued that Defendant had waived its right to compel arbitration. (Ibid.) Because Plaintiff has refused to stipulate to arbitration, Defendant now petitions this Court for an order compelling Plaintiff's claims to a binding arbitration of certain statutory causes of action. III. LEGAL ARGUMENT A. Federal and California Law Favor Arbitration. 1. The Federal Arbitration Act creates a strong presumption in favor of arbitration. The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., "creates a body of federal substantive law establishing and regulating the duty to honor an agreement to arbitrate" that is applicable in both state and federal courts. (Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 25, fn. 32.) The FAA creates a strong presumption in favor of arbitration. (See AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 346 [Describing the FAA as "embodying a national policy favoring arbitration" and a "liberal federal policy favoring arbitration agreements."].) The FAA provides that a "written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract[,] . . . shall be valid, irrevocable, and enforceable save upon grounds as exist at law or in equity for the revocation of any contract." (9 U.S.C. § 2.) Under the FAA, the basic role for this Court is limited to determining whether the movant has shown (1) that a valid arbitration agreement exists, and, if so, (2) that the arbitration agreement encompasses the claims at issue. (Kilgore v. KeyBank, N.A. (9th Cir. 2012) 673 F.3d 947, 955-56.) If the movant carries its burden, the party opposing arbitration must proffer evidence demonstrating that the arbitration agreement is invalid. (See Green Tree Fin. Corp. v. Randolph (2000) 531 U.S. 79, 91-92.) {32606-23 00520544.DOCX 1 } - 7 - MPA ISO PETITION TO COMPEL ARBITRATION Doubts as to whether Plaintiff's claims are subject to arbitration must be resolved in favor of arbitration. (See Moses H. Cone Mem. Hosp., supra, 460 U.S. at 24-25; AT&T Tech., Inc. v. Commun. Workers of Am. (1986) 475 U.S. 643, 650 ["[A]n order to arbitrate . . . should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage."].) 2. California law favors enforcement of arbitration agreements. The California Arbitration Act ("CAA"), like the FAA, requires courts to enforce an arbitration agreement where one party has shown the existence of an agreement to arbitrate that encompasses the dispute in question, unless the party opposing arbitration demonstrates that the agreement is invalid or unenforceable. (See Cal. Civ. Proc. Code § 1281.2 (CAA); 9 U.S.C. § 2 (FAA).) The moving party bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence. (See Mission Viejo Emerg. Med. Assocs. v. Beta Healthcare Group, (2011) 197 Cal. App. 4th 1146, 1153.) Once the moving party has established the existence of the arbitration agreement, the burden shifts to the party opposing arbitration to establish the factual basis for any defense to the enforcement of the arbitration agreement. (Id. at 1154; Rosenthal v. Great W. Fin. Sec. Corp. (1996) 14 Ca1.4th 394, 413.) California courts have uniformly acknowledged the state's strong public policy in favor of enforcing arbitration agreements. (See Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Cal. 4th 83, 97 ["California law, like federal law, favors enforcement of valid arbitration agreements."].) Consequently, courts will "indulge every intendment to give effect to [arbitration] proceedings." (Bigler v. Harker Sch. (2013) 213 Cal.App.4th 727, 735.) Doubts regarding the arbitrability of a dispute must be resolved in favor of arbitration. (See, e.g., Coast Plaza Doctors Hosp. v. Blue Cross of Calif (2000) 83 Cal. App. 4th 677, 686 [Emphasizing the "general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute."].) / / / 132606-2.3 00520544.DOCX I I - 8 - MPA ISO PETITION TO COMPEL ARBITRATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. A Valid Agreement to Arbitrate, Negotiated by Plaintiff's Exclusive Bargaining Representative, Existed. A court should grant a petition to compel arbitration if it determines that an agreement to arbitrate the controversy exists. (Cortez v. Doty Bros. Equipment Co. (2017) 15 Cal.App.5th 1, 11; Code of Civil Procedure §1281.2.) The fundamental question is whether the parties have agreed to arbitrate their dispute, and this "is a matter of contract." (American Express Co. v. Italian Colors Restaurant (2013) 570 U.S. 228, 233; Cortez, supra, 15 Cal.App.5th at 11.) "[A] party that has not agreed to arbitrate a controversy cannot be compelled to do so." (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.) A union, under the National Labor Relations Act, may be the exclusive bargaining representative of employees. (14 Penn Plaza LLC v. Pyett (2009) 556 U.S. 247, 251; 29 U.S.C.S. §159(a).) In this role, the Union has exclusive and broad authority to bargain on behalf of its members over their 'rates of pay, wages, hours of employment, or other conditions of employment' and in the administration of the collective bargaining agreement. (14 Pen Plaza LLC, supra, 556 U.S. at 251, quoting 29 U.S.C.S. §159(a) and citing Communications Workers v. Beck (1988) 487 U.S. 735, 739.) An arbitration provision is a freely negotiated term between a union and employers that qualifies as a condition of employment subject to mandatory bargaining under 29 U.S.C.S. §159(a). (14 Pen Plaza LLC, supra, 556 U.S. at 256; Steelworkers v. Warrior & Gulf Nay. Co. (1960) 363 U.S. 574, 578 ["[A]rbitration of labor disputes under collective bargaining agreements is part and parcel of the collective bargaining process itself."].) It does not matter that Johnson, as an individual, did not sign an arbitration agreement. (14 Pen Plaza LLC, supra, 556 U.S. at 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."].) Where an agreement to arbitrate appears in a CBA, an employee need not sign a CBA to be bound by the arbitration provision. "The 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, supra, 15 {32606-23 0052Q544.DOCX 1 1 - 9 - MPA ISO PETITION TO COMPEL ARBITRATION Cal.App.5th at 11.) The presumption of arbitration in a CBA, however, does not apply to statutory violations unless the waiver of the right to prosecute a statutory violation in a judicial forum is made explicit, clear and unmistakable. (Id., at 16-17.) Here, an agreement to arbitrate existed. It was negotiated by Plaintiff's representative, his Union, with Plaintiffs employer, and was one of the union master agreements, or CBAs, contained in the PLA for the High-Speed Rail Project, a public works project. Plaintiffs brief tenure at Drill Tech spanned two CBAs, the 2016 - 2019 Agreement and the 2019 - 2023 Agreement. The operative Agreement at the time Plaintiff left Drill Tech was the 2019 - 2023 Agreement. This Agreement covers the controversies raised by Plaintiff in his First Amended Complaint, including statutory violations involving the California Labor Code and IWC Orders. (2019 - 2023 Agreement, Section 5.K.) The arbitration provisions assure Plaintiff of all substantive and procedural rights applicable to mandatory arbitration of employment claims, the right to more than minimal discovery, and a statute of limitations (except for rest and meal period claims) permitted by applicable law. (Ibid.) Defendant specifically seeks arbitration on Plaintiffs statutory claims for unpaid minimum wages or "off the clock work" (Labor Code Sections 1194, 1197 and 1198); failure to indemnify (Labor Code Section 2802); pay statement violations (Labor Code Section 226 (a)); waiting time penalties associated with the failure to be paid wages due upon termination (Labor Code Section 203); paying lower wages than required by contract or statute while purporting to pay legal wages (Labor Code Sections 223); and claims arising under the UCL (in so far as those claims are derivative of the aforementioned claims). In the 2019 - 2023 Agreement, Plaintiff waived his right to prosecute these statutory violations in a judicial forum, and this waiver is made explicit, clear and unmistakable in the language of Section 5, subsection K. C. Defendant Did Not Waive Its Right to Compel Arbitration. "There is no fixed stage in a lawsuit beyond which further litigation waives the right to arbitrate." (Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1204.) Indeed, a party resisting arbitration on the ground of waiver bears a "heavy burden" and doubts regarding a waiver allegation should be resolved in favor of arbitration. (St. Agnes Medical Center v. 132606-2,3 00520544 DOCX 1 1 - 10 - MPA ISO PETITION TO COMPEL ARBITRATION PacifiCare of California (2003) 31 Ca1.4th 1187, 1195.) Whether there has been a waiver is a fact sensitive inquiry, where a number of factors are relevant. These factors can include: (1) whether the party's actions are inconsistent with the right to arbitrate; (2) whether 'the litigation machinery has been substantially invoked" in the parties `were well into preparation of a lawsuit" before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) "whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place'; and (6) whether the delay 'affected, misled, or prejudiced' the opposing party. (Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992, quoting Peterson v. Shearson/American Exp., Inc. (10th Cir. 1988) 849 F.2d 464, 467-468.) No one of these factors is dominant, except prejudice, as each case must be examined in context. (Lewis v. Fletcher Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436, 444.) Conduct inconsistent with the exercise of the right to arbitrate may suggest waiver. However, a party filing a judicial action or a defendant answering a complaint "does not per se waive the right to demand arbitration later." (Hoover, supra, 206 Cal.App.4th 1193, 1204.) Engaging in partial or piecemeal litigation of issues in dispute, for instance demurrers or motions to strike, may justify a finding of waiver. (Lewis, supra, 205 Cal.App.4th at 448-449.) Defendant has engaged in no pretrial motions in this case thus far, and there has been no partial or piecemeal litigation of the issues in dispute. The machinery of litigation has not been substantially invoked in this case. The parties have engaged in one round of written discovery limited to Plaintiff s individual claims. No depositions have been taken. There have been no pretrial motions. No trial date has yet been set in this case. The delay between the filing of the Complaint and Defendant's request for arbitration has not been unreasonably long, especially as the parties and the Court have had to deal with the COVID-19 pandemic which started at about the same time Plaintiff filed his initial Complaint. Defendant has not filed a counterclaim is case, nor has Defendant taken any important intervening steps in this litigation. The discovery in which the parties have already engaged would be available to the parties in an arbitration proceeding under the 2019 - 2023 Agreement. (See Section 5.K.) Finally, Plaintiff has not been "affected, misled, or prejudiced" by {32606-2J 00520544,DOCX 1 I - I I - MPA ISO PETITION TO COMPEL ARBITRATION Defendant seeking arbitration. Defendant's counsel has repeatedly reached out to Plaintiff's counsel to discuss the viability of arbitration and to parlay with Plaintiff over the arguments for and against arbitration. While Plaintiffs counsel has not substantively engaged in this process, Plaintiff cannot contend they have been misled or otherwise "affected." A review of these factors (with prejudice being addressed below) demonstrates that there is no ground for finding of a waiver and this Court should grant Defendant's petition to compel arbitration. 1. Plaintiff has not been prejudiced by Defendant seeking to compel arbitration. Whether or not a party is prejudiced can be a critical factor in waiver determinations. (St. Agnes Medical Center, supra, 31 Cal.4th at 1203.) Participating in litigation alone does not result in a waiver and courts will not find prejudice where an opposing party only shows that it incurred court costs and legal expenses. (Id., at 1203; Groom v. Health Net (2000) 82 Cal.App.4th 1189, 1197 [Expense of responding to motions for preliminary pleadings is not the type of prejudice that bars a petition to compel arbitration.].) "Prejudice typically is found only where the petitioning party's conduct has substantially undermined this important public policy [of arbitration as a speedy and relatively inexpensive means of dispute resolution] or substantially impaired the other side's ability to take advantage of the benefits and efficiencies of arbitration." (St. Agnes Medical Center, supra, 31 Ca1.4th at 1204.) An example of prejudice includes where a petitioning party used judicial discovery processes to gain information about the other side's case it could not have gained in arbitration. (Berman v. Health Net (2000) 80 Cal.App.4th 1359, 1366.) An example of prejudice includes a party unduly delaying and waiting until the eve of trial to seek to compel arbitration. (Sobremonte, supra, 61 Cal.App.4th at 995-996.) An example of prejudice includes a petitioning party's lengthy delays resulting in lost evidence. (Christensen v. Dewor Developments (1983) 33 Cal.3d 778, 784.) Nothing akin to these examples exists in the record in the short history of this case. Here the parties have not litigated the merits or substance of Plaintiffs claims. Defendant has not used judicial discovery to gain information about Plaintiffs case that otherwise would not be available 132606-23 00520544.DOCX 11 - 12 - MPA ISO PETITION TO COMPEL ARBITRATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 in arbitration. The limited information obtained in discovery to date by both sides is the same information that would have been obtained in the early stages of an arbitration. Defendant's actions have not impaired Plaintiff's ability to have the arbitrable issues in this action resolved fairly through arbitration. (See St. Agnes Medical Center, supra, 31 Ca1.4th at 1204.) Plaintiff has not been prejudiced by Defendant's petition to compel arbitration. IV. CONCLUSION Defendant Drill Tech's petition to compel arbitration on Plaintiff's claims for unpaid minimum wages or "off the clock work" (Labor Code Sections 1194, 1197 and 1198), failure to indemnify (Labor Code Section 2802), pay statement violations (Labor Code Section 226 (a)), waiting time penalties associated with the failure to be paid wages due upon termination (Labor Code Section 203), paying lower wages than required by contract or statute while purporting to pay legal wages (Labor Code Sections 223), and claims arising under the UCL (in so far as those claims are derivative of the aforementioned claims) should be granted. State and federal law favors arbitration of disputes, there has been no waiver of Defendant's right to seek to compel arbitration, and Plaintiff has not suffered any prejudice. Date: November 9, 2020 Respectfully Submitted, SIMPSON, GARRITY, INNES & JACUZZI Professional Corporation By: PAUL V. SIMPSON MATTHEW A. MALLET Attorneys for Defendant Drill Tech Drilling & Shoring, Inc. (32606-23 00520544.DOCX 1 1 - 13 - MPA ISO PETITION TO COMPEL ARBITRATION PROOF OF SERVICE I, Estelle Franklin, am employed in the City of South San Francisco, County of San Mateo. I am over the age of eighteen years and not a party to the within action. My business address is Simpson, Garrity, Imes & Jacuzzi, PC, 601 Gateway Boulevard, Suite 950, South San Francisco, CA 94080. My electronic service address is estelle@sgijlaw.com. I hereby certify that on November 9, 2020, I served the MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT DRILL TECH DRILLING & SHORING, INC.'S PETITON TO COMPEL ARBITRATION on the interested parties in this action by electronic transmission via the Odyssey file California program whose e-filing system will electronically serve the following attorneys of record who have consented to receive electronic service of documents in this matter: SERVICE LIST Shaun Setareh, Esq. Attorneys for Plaintiff William Pao, Esq. Izaya Johnson Setareh Law Group 315 South Beverly Drive, Suite 315 Beverly Hills, CA 90212 Phone: (310) 888-7771 Fax: (310) 888-0109 Email: shaun@setarehlaw.com; williarn(alsetarehlaw.conr, jose&setarehlaw.com; lauren@setarehlaw.com: calendariiiisetarehlaw.com Judge Patricia M. Lucas Department 3 Superior Court of California County of Santa Clara 191 North First Street San Jose, California 95113 Phone: 408-882-2130 Department3(1tsc sec urt.org [Z] [By Electronic Transmission] I caused said document to be sent by electronic transmission to the e-mail address(es) indicated for the party(ies) listed above. {32606-23 00520544 DOCX 1 1 - PROOF OF SERVICE I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed this date at Walnut Creek, Calj,f9rnia. Dated: November 9, 2020 Est Frank {32606-2.3 00520544.DOCX 1 I - 2 - PROOF OF SERVICE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28