Defendants Notice of Motion And Motion To Compel Arbitration And Dismiss Or Stay Action Memorandum of Points And Authorities

Motion

Cal. Super. - 4th Dist.January 17, 2019

BUCHALTER 10 11 12 13 14 15 16 17 18 19 20 2 22 23 24 25 26 27 28 A PROFESSIONAL CORPORATION Los ANGELES BUCHALTER A Professional Corporation TRACY A. WARREN (SBN: 228013) 655 West Broadway, Suite 1625 San Diego, CA 92101 Telephone: (619) 219-5335 Email: twarren@buchalter.com BUCHALTER A Professional Corporation ARTHUR CHINSKI (SBN: 48945) KALLEY R. AMAN (SBN: 217337) RONALD J. ARIAS (SBN: 315198) 1000 Wilshire Boulevard, Suite 1500 Los Angeles, CA 90017-2457 Telephone: (213) 891-0700 Facsimile: (213) 896-0400 Email: kaman@buchalter.com ELECTRONICALLY FILED Superior Court of California, County of San Diego 03/04/2019 at 03:28:00 PM Clerk of the Superior Court By Richard Day, Deputy Clerk Attorneys for Defendants THE CHEESECAKE FACTORY INCORPORATED and THE CHEESECAKE FACTORY RESTAURANTS, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN DIEGO MARIO FLORES ORELLANA, an Individual, Plaintiff, Vv. THE CHEESECAKE FACTORY INCORPORATED, a Delaware Corporation; THE CHEESECAKE FACTORY RESTAURANTS, INC., a California Corporation; and DOES 1 - 50, Inclusive, Defendants. BN 35670168v1 CASE NO. 37-2019-00003184-CU-OE-CTL Assigned to the Hon. Gregory W. Pollack Department: 71 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND DISMISS OR STAY ACTION; MEMORANDUM OF POINTS AND AUTHORITIES [Declaration of Laurie Lambert-Gaffney and Proposed Order Concurrently Filed Herewith] Date: May 10, 2019 Time: 9:30 a.m. Dept.: 71 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND DISMISS OR STAY ACTION Nn ~~ O N a 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BUCHALTER A PROFESSIONAL CORPOR ATION LOS ANGELES TO PLAINTIFF AND HIS ATTORNEY OF RECORD: PLEASE TAKE NOTICE that on May 10, 2019 at 9:30 a.m., or as soon thereafter as this matter may be heard in Department 71 of the above-entitled Court located at Hall of Justice, 330 West Broadway, San Diego, CA 92101, Defendants The Cheesecake Factory Incorporated and The Cheesecake Factory Restaurants, Inc. (together, “Cheesecake™) will and hereby do move this Court for an order compelling arbitration of Plaintiff Mario Flores Orellana’s (“Plaintiff”) claims alleged in this action. Cheesecake makes this motion pursuant to Federal Arbitration Act, 9 U.S.C. Section 1, et seq., and California Code of Civil Procedure Sections 1281.2 and 1281.4 on the ground that Plaintiff executed an enforceable arbitration agreement whereby he agreed to arbitrate any and all disputes with Cheesecake, including all of the claims alleged in the action. This motion is based upon this notice of motion, the ached memorandum of points and authorities, the declaration of Laurie Lambert-Gaffney and exhibits thereto, the pleadings and records on file with the Court, and such other matters as may be presented at the hearing on this motion. DATED: March 4, 2019 BUCHALTER A Professional Corporation J) (CS op Hin TRACY A. WARREN Attorneys for Defendants THE CHEESECAKE FACTORY INCORPORATED and THE CHEESECAKE FACTORY RESTAURANTS, INC. By: BN 35670168v1 1 DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BUCHALTER Table of Contents Page L INTRODUCTION .oc.cocosmsssissionsnansiifisnmemnssnsans svnnsn 55555855 Ei nhasannsasansnsssssilsbsnss i E008 fins ce sihRorasns 1 II. BACKGROUND FACTS suusissssssssmssusssnsssnsesomssmmss sss ssa sess is6s (as ess mes 1 A. Plaintiff Entered Into A Pre-Employment Agreement With Cheesecake To ATDILrate DISPULES. ...vviveiiiirieeieiieceecieee sere estes sees eree eraser assassins eseesse esse ess sr eseansans 1 B. Plaintiff Transferred to Cheesecake’s San Diego Restaurant and Subsequently Filed His Complaint. ...........cceeveeererenenne. eee beeen sheers ns 4 IIL. THE COURT SHOULD COMPEL PLAINTIFF TO ARBITRATION AND DISMISS OR STAY THE ACTION PENDING COMPLETION OF THE ARBITRATION vss sususnsumsmsnsnesnsesssemssesss ss vsssswss mi ses 3s 555s 05s S008 0s ye es (Fas sas asa 5 The FAA Governs The Plaintiff's Agreements To Arbitrate.........ccccceevvevierennnnnee. 5 B. The FAA Mandates Enforcement of Plaintiff’s Agreement To Arbitrate .............. 6 C. California Law Mandates Enforcement Of Plaintiff's Arbitration Agreement ...... 7 D. The Parties Mutually Assented To Arbitrate Plaintiff's Claims ..........ccccccevvevennenn 9 E. Plaintiff’s Individual Claims Fall Within The Scope Of The Arbitration J ECR C Econo ss 0 A RT ESM ENB EEF 10 F. The Court Should Stay All Further Proceedings Pending Its Ruling On this Motion And Dismiss Or Stay The Action Once The Motion Is Granted Pending Completion Of The Arbitration ...........ccccvveeveeieciveeniececre secre 10 IV. CONCLUSION cotinine onesie encanta nnes 11 BN 35670168v1 i DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION BUCHALTER 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A PROFESSION AL CORPORATION Li 05 ANGELES Table of Authorities Page(s) Cases 24 Hour Fitness, Inc. v. Superior Court (Munshaw) (1998) 66 CalAPP.ALh 1199 oii creer sees eens 8 Allied-Bruce Terminix Companies, Inc. v. Dobson T1995) B13 TLS. 285 sonussessssivnsunmvuss swans sorssssnssssssmsss sss ssmssas isms sss miss sisi 5 5 masse ssi 6 Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.dth 83 .....ceoeeiieeeeeeceeeee erecta eee sbeebs tenet ss re es 8,9 AT&T Technologies, Inc. v. Communication Workers of America (1986) 47 U.S. 043... eects estes eee b esse sbeebs beets b es e estes beet e sre sate nt eben ae ene 7 Aviation Data, Inc. v. American Express Travel Related Services Co. (eh 013 I PR 0 WAN Re re SR -- TROUSER ------------ 6 Cione v. Foresters Equity Servs. (1997) 58 Tal ADD AI B25 csusnsmssnsssssnssos mmission sss sms sass sams sam 8 Circuit City v. Adams (2001) 532 TLS. 105 ieee esterases eee ere sree sae se sess 6,7 Dean Witter Reynolds, Inc. v. Byrd (LOBE) ATO LISS. D3... eeremermomnmmsmemmssnns snssnmsionssins eh 65is650.48544884 550.5553 845 55 S508 549TH AREA SAH COSTAR 7 Fittante v. Palm Springs Motors, Inc. (2003) 105 Cal. ADD AE TOB .cusuuncassusnsssnsssasussussusassssnssssssiesss ms ses o ama ss srssie snus 8 Franco v. Arakelian (2015) 234 Cal. APP.Ath O47 conics seers 11 Harris v. TAP Worldwide, LLC (2016) 248 Cal. APDP.Ath 373 eee seers 9 Mission Viejo Emergency Med. Assocs. v. Beta Healthcare Group (2011) 197 CAl APPA LIAO... memoria ois 8855756 4555 0 AS 55S HES PAF 55 8 Oblix, Inc. v. Winiecki (7th Cir. 2004) 374 B30 AB8.cuuninnissssmmanssnsrnsnssss ms ns mens ses sss s s sao in 7 Perry v. Thomas (1987) 482 U.S. 483... eres teehee t ears sae estes terrane sree ar ene 6 Posner v. Gunwald Marx, Inc. (1961) S6 Cal.2d 109 coerce sbeebs ese sb ees 8 Prima Paint Corp. v. Flood & Conklin Mfg. Co. CLIT) S38 LLEL FES. co eamscommmmsmsamm anamnsemsasasmssmsnasassa assassin mse smsssmsoiioiban Eadie Se SARs 7 BN 356701681 ii DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION A PROFE BUCHALTER LOS ANGELES £$510N Al. CORPORATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 oN Serafin v. Balco Properties Ltd., LLC EE CR 6 00 KN LT ----- RE ----------- 9 Southland Corp. v. Keating (1984) 465 U.S. 1. reteset ebb sheaths bese eb eaten b esterase ese ene seen 7 Spellman v. Sec., Annuities & Ins. Servs, Inc. (1992) 8 Cal. APP. Ath 452 .....nee ee 7 Spinello v. Amblin Entertainment (1994) 29- Cal APD AI 1ID0 cusssunnsemsnnsssnsssmsssnssansssssisaswsssssis 55s i ym 5am ss 9 Stirlen v. Supercuts, Inc. (1997) ST Cal. APP. 4th 1519 coors eee eee 8 Vaden Discovery Bank (2009) 556 U.S. 49... sees b ebb tebe etter eb ete b eben ne ene 7 Statutes ELS: Drvcsunmnansvsnsssosominsss on esses ms sams ams ov sas em 3 AS AS EG REA PH N39 YS EAA A 6,7 Cal. Code Civ. Proc. § 1281. ....cuvciireeeeireeeeeeeeeeeeeeeeee sser eens 7 Cal. COE CIV. PrOC. § 1281.2. oom eeeeeeeeseeseee ees eesseeeseseesessesseesessesssessseesssseeesssseseesseensesenes 9 Cal. Code Civ. Proc. § 1281.4... eects erecta ese n eens e eres saree sebe as eraessasbans 12 Government Code § 12940(1)........ccuieiiiieieeiiie eects eee eee eee errant ee ennes 5 Government Code § 129800101). ousmvsscmsomsummmmasossssmosmsssissmnmmssmsssss ssmsss s is s u sm 4,5. GoyErment Cote B T2OBONIEY: osmmsmnmsssomnsosusmsmmemssmssmmsss nsen s mss ss anes a sis 5 Labor Code § 1102.5(C) .uerrieriiiieieeieeiie cesses cesses e seers ees nena esa esse e sree states sree sreaersae sabe nas 5 Labor Code § T174(A) uevviriiiiiiiiiieeiieiieirteerieiee sre ee este ebe sie este ssse sat eate s ee sseense teesteeesse eases su s sas 5 Labor Code § 201... cece eee estes beset eae ee beeen rest reer reser ane srne es rraessreaen 5 Labor Code § 202... steerer teeta eee este eee sabes beer eb serene nates 5 LABOTICOUE. § 203 icuuuusses cummmnssn vuvssans sumassisn uses snes mss ssos asasss sass sisi ws ss (530s asx AT ES8as HARARE SH TOTS 335 5 LABOTCOAE. § 226. cxumvvmmsssmvmmmmasmsnmssssrrsmimssasmsss os samme ye sea dom 08 SE SoS SH eS SEA SR EAR TRE 5 Labor COE § 226.7 ....vvieiiiierieiiieeiieeeciere sete sectreestrre setae s asesbaeeebaesessesesssae esse esssasassse esse eaasserantan sntens 5 LabOT COA § S12. crete eects e reser ese be sabes reese east erst esa a sarees ae ete saben rae naeas 5 Labor Code § 08.0... .cciuiiiiiieiiciei cites e cere srt resets errr estes ears esate eerste se sntaestbe errs eestaesrneeesreeeeanes 1,5 BN 35670168v1 111 DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION NO 00 NN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BUCHALTER A PROFESSION AL CORFOR ATION 1.05 ANGELES MEMORANDUM OF POINTS AND AUTHORITIES IL INTRODUCTION This case arises out of Plaintiff Mario Flores Orellana’s (“Plaintiff”) employment at The Cheesecake Factory restaurants in Arlington, Virginia and San Diego, California. Plaintiff asserts eleven causes of action in the Complaint for hostile work environment - sexual harassment in violation of the Fair Housing and Employment Act (“FEHA”), race/national origin harassment in violation of FEHA, retaliation in violation of FEHA, retaliation and wrongful termination in violation of the California whistleblower statute, retaliation and wrongful termination in violation of Labor Code § 98.6, failure to prevent harassment and retaliation from occurring in violation of FEHA, constructive discharge in violation of public policy, failure to provide rest periods, failure to provide meal periods, failure to timely pay wages, and failure to provide accurate wage statements. The Court must compel this case to arbitration because Plaintiff executed an enforceable arbitration agreement with Cheesecake prior to commencing his employment with Cheesecake wherein the parties agreed to arbitrate all claims arising out of the Plaintiff’s employment. The arbitration agreement covers every claim alleged in this action and complies with the requirements of the Federal Arbitration Act (“FAA”) and California law for the enforcement of employment-related arbitration agreements. Having agreed to individually arbitrate any and all disputes with Cheesecake, Plaintiff has no grounds for pursuing his claims in Court. Under the FAA and Code of Civil Procedure Sections 1281.2 and 1281.4, Plaintiff's claims must be compelled to arbitration and the action must be dismissed or stayed pending the outcome of arbitration. IL BACKGROUND FACTS A. Plaintiff Entered Into A Pre-Employment Agreement With Cheesecake To Arbitrate Disputes. On or about September 28, 2016, Cheesecake hired Plaintiff as a line cook at its Arlington, Virginia restaurant. (Declaration of Laurie Lambert-Gaffney (“Lambert-Gaffney Decl.”), § 4.) That day, Plaintiff received Cheesecake’s Staff Member Handbook in electronic BN 35670168v1 1 MEMORANDUM OF POINTS AND AUTHORITIES BUCHALTER Nn OO 0 3 O&A Wn 10 11 12 13 14 15 16 17 18 19 20 21 rs 23 24 25 26 27 28 A PROFESSION Al. CORPORATION 1. 05 ANGELES format using Cheesecake’s Equifax Compliance Center software. (Lambert-Gaffney Decl., § 3-4, Ex. 2.) Plaintiff indicated that he received the Staff Member Handbook and that he understood it was his responsibility to review the Staff Member Handbook, by electronically initialing an acknowledgement of receipt. (Lambert-Gaffney Decl., § 4, Ex. 2.) The Staff Member Handbook contained the following Arbitration Provision in its Handbook Receipt & Confidentiality Agreement: I RECOGNIZE THAT DIFFERENCES MAY ARISE BETWEEN ME AND THE COMPANY DURING, OR FOLLOWING, MY EMPLOYMENT WITH THE COMPANY. I AGREE TO PARTICIPATE IN IMPARTIAL DISPUTE- RESOLUTION PROCEEDINGS AS A CONDITION OF AND AS CONSIDERATION FOR THE OFFER OF EMPLOYMENT BY THE COMPANY. IF I, OR THE COMPANY, DETERMINE THAT THE COMPANY’S INTERNAL PROCEDURES FOR HANDLING CLAIMS (INCLUDING BUT NOT LIMITED TO, REPORTING CLAIMS TO MY MANAGER, THE AREA DIRECTOR OF OPERATIONS, THE CARELINE, AND/OR THE STAFF RELATIONS DEPARTMENT), HAVE NOT RESULTED IN A MUTUALLY ACCEPTABLE RESOLUTION OF DISPUTES BETWEEN ME AND THE COMPANY, I AGREE TO PARTICIPATE IN ARBITRATION PROCEEDINGS IN MY INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF, CLAIMANT, OR CLASS MEMBER IN ANY PURPORTED CLASS ACTION, COLLECTIVE ACTION, OR OTHER REPRESENTATIVE OR JOINT PROCEEDING, IN ACCORDANCE WITH THE TERMS OF THE MUTUAL AGREEMENT TO ARBITRATE CLAIMS. (Lambert-Gaffney Decl., § 4, Ex. 1.) Plaintiff also received electronically the same Arbitration Provision contained in the Staff Member Handbook set forth above. Plaintiff electronically initialed the Arbitration Provision, which was in English and Spanish, acknowledging that he agreed to arbitrate his claims against Cheesecake. (Lambert-Gaffney Decl., 9 4, Ex. 2.) On or about October 11, 2016, Plaintiff executed a pre-employment Mutual Agreement to Arbitrate Claims in English and Spanish whereby he and Cheesecake agreed to arbitrate any disputes between them relating to Plaintiff's employment at Cheesecake. (Lambert-Gaffney Decl, 9 5, Ex. 3.) The claims covered by the arbitration agreement include any and all claims arising out of Plaintiff's employment with Cheesecake, including, but not limited to, claims for violation of any State statute or regulation. In pertinent part, the agreement provides as follows: Claims Covered by the Agreement The Company and I agree to arbitrate before a neutral arbitrator any and all disputes or claims between the Company and me that arise out of or relate to my recruitment, employment or separation from employment with the Company BN 35670168v1 2 DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION BUCHALTER 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A PROFESSION AL CORPORATION Los ANGELES (currently existing or which may arise in the future), including claims involving and/or against any current or former officer, director, shareholder, agent or employee of the Company, and/or against any current or former Company benefit plan sponsors, fiduciary or administrator, whether the disputes or claims arise under common law, in tort, in contract, or pursuant to a statute, regulation, or ordinance now in existence or which may in the future be enacted or recognized, including, but not limited to, the following claims: Claims for wrongful termination of employment, retaliation, violation of public policy, constructive discharge, infliction of emotional distress, misrepresentation, discrimination, negligence, interference with contract or prospective economic advantage, defamation, unfair business practices, and any other tort or tort-like causes of action relating to or arising from the employment relationship or the formation or termination thereof; Claims under any and all federal, state, or municipal statutes, regulations, or ordinances, including but not limited to laws that prohibit discrimination, harassment, or retaliation in employment (for example, those related to or based upon but not limited to, a person's race, sex, religion, national origin, age, marital status, medical condition, disability or being in another protected class) such as but not limited to Title VII of the Civil Rights Act of 1964, the Civil Rights Acts of 1866 and 1991, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Section 1981 of the Civil Rights Act, the Worker Adjustment and Retraining Notification Act, and the Sarbanes-Oxley Act of 2002 and/or any state or local fair employment or right to leave laws; Claims for wages or other compensation or benefits and/or for payments, penalties, interest, and/or liquidated damages related thereto (including, but not limited to claims for non-payment, underpayment, or incorrect payment of wages, overtime, commissions, bonuses, severance, employee fringe benefits, stock options, payments for missed breaks, payments for late final pay, payments relating to itemized wage statements, associated penalties and the like) whether such claims are pursuant to alleged express or implied contract or obligation, equity, or any federal, state, or municipal laws concerning wages, compensation or employee benefits including but not limited to claims under the Fair Labor Standards Act of 1938, the Equal Pay Act of 1963, and other applicable federal, state and municipal statutes, regulations or ordinances. (Lambert-Gaffney Decl., § 5, Ex. 3, pgs. 1-2.) The Agreement provides that Cheesecake will bear the costs of the arbitration (Lambert- Gaffney Decl., § 5, Ex. 3, pg. 5) and that the arbitration would proceed pursuant to the Employment Arbitration Rules and Mediation procedures issued by the American Arbitration Association. (Lambert-Gaffney Decl., § 5, Ex. 3, p. 4.) Plaintiff’s arbitration agreement is governed and controlled by the FAA. It provides in pertinent part as follows: BN 35670168v1 3 DEFENDANT'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BUCHALTER A PROFESSIONAL CORPORATION 1.0S ANGELES Applicability of the Federal Arbitration Act The Company and I agree that the arbitration and this Agreement shall be controlled and governed by the Federal Arbitration Act (“FAA”) and acknowledge that the Company’s business and the nature of my employment affect interstate commerce. This Agreement evidences a transaction in interstate commerce, and thus the FAA governs the interpretation and enforcement of this Agreement. (Lambert-Gaftney Decl., 5, Ex. 3, pg. 1.) Plaintiff acknowledged that he entered into the arbitration agreement voluntarily and had the right to consult with legal counsel. Immediately above his and Cheesecake’s signatures, the agreement provides: Knowing and Voluntary Agreement By Staff Member I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN THIS AGREEMENT, AND THAT I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF. I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO AND HAVE BEEN ADVISED TO DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL OR REPRESENTATIVE OF MY CHOOSING AND HAVE AVAILED MYSELF OF THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO. (Lambert-Gaffney Decl., § 5, Ex. 3, pg. 6.) B. Plaintiff Transferred to Cheesecake’s San Diego Restaurant and Subsequently Filed His Complaint. In June 2017, Plaintiff transferred to Cheesecake’s San Diego location and continued his employment as a line cook until his voluntary termination in October 2018. (Lambert-Gaftney Decl., § 6.) Notwithstanding his agreement to arbitrate this dispute, on January 17, 2019, Plaintiff filed a lawsuit against Cheesecake for claims covered by the Arbitration Agreement. Specifically, Plaintiff alleges the following causes of action arising out of his employment: 1) hostile work environment - sexual harassment in violation of Government Code §12940()(1); 2) race/national origin harassment in violation of Government Code §12940(j)(1); BN 35670168v1 4 DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION 1 3) retaliation in violation of Government Code §12940(h); 2 . . . . 4) retaliation and wrongful termination in violation of Labor Code §1102.5(c); 3 4 5) retaliation and wrongful termination in violation of Labor Code §98.6; 5 6) failure to prevent harassment and retaliation from occurring in violation of 6 Government Code § 12940(k); 7) constructive discharge in violation of Public Policy; 8 9 8) failure to provide lawfully-required rest periods in violation of Labor Code §226.7; 10 9) failure to provide lawfully-required meal periods in violation of Labor Code §§512 11 and 226.7; 12 . . CL 10) failure to timely pay wages in violation of Labor Code §§201, 202, and 203; 13 14 11) failure to provide accurate wage statements in violation of Labor Code §§226 and 1174(d). 15 ib Cheesecake requested that Plaintiff enter into a stipulation to arbitrate based upon the 17 Arbitration Agreement, but Plaintiff refuses to honor the terms of his agreement. 18 19/ TH. THE COURT SHOULD COMPEL PLAINTIFF TO ARBITRATION AND DISMISS OR STAY THE ACTION PENDING COMPLETION OF THE 20 ARBITRATION 2] A. The FAA Governs The Plaintiff’s Agreements To Arbitrate 22 The FAA applies to any arbitration agreement affecting interstate commerce including 23|| employment agreements, with certain exceptions not applicable here: 24 A written provision in any [| contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such 25 contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out 26 of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation 27 of any contract. 28 BUCHALTER 4 rosea Gomoymox BN 35670168 5 1.05 ANGELES DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION BUCHALTER Oo 0 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (9 U.S.C. § 2; see Circuit City v. Adams (2001) 532 U.S. 105.) According to the United States Supreme Court, the interstate commerce requirement in the FAA is satisfied if the “transaction” remotely “involved” interstate commerce - even if the contracting parties did not contemplate an interstate commerce connection. (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 273 (a lifetime termite protection contract between Alabama homeowners and Termite Protection Co. “involved commerce” because Termite Protection Co. was a multistate firm and shipped materials from outside the state); Perry v. Thomas (1987) 482 U.S. 483 (employment agreement between stock brokerage and an account executive involves interstate commerce and is subject to FAA).) The arbitration agreement in this case is a contract affecting interstate commerce because Cheesecake is a publicly traded national restaurant chain that engages in interstate commerce. It oversees the operation of 200 The Cheesecake Factory restaurants in 41 states (including California), Puerto Rico and the District of Columbia. Cheesecake has employees in each of these states, recruits employees for various restaurants across state lines, and allows managers to move back and forth across state lines. Cheesecake therefore transacts business in many states across the country and manages this national business across state lines from its principal business office in Calabasas, California. Further, Cheesecake receives shipments from across state lines in California for its California restaurant locations and in North Carolina and California for its two bakery facilities. (Lambert-Gaffney Decl., § 7.) Furthermore, Plaintiff’s arbitration agreement specifically states that it is governed by the FAA. (Lambert-Gaffney Decl. 45 Ex. 3, pg. 1; see Aviation Data, Inc. v. American Express Travel Related Services Co. (2008) 152 Cal.App.4th 1522, 1534-35 (enforcing clause providing that FAA applies to the arbitration agreement).) Accordingly, the FAA governs Plaintiff's arbitration agreement and mandates its enforcement. B. The FAA Mandates Enforcement of Plaintiff’s Agreement To Arbitrate Under the FAA, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation. (9 U.S.C. § 2; Dean Witter Reynolds, BN 35670168v1 6 DEFENDANT'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION BUCHALTER A PROFESSIONAL 1.05 ANGELES . CORPORAFIO 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 oF 28 Inc. v. Byrd (1985) 470 U.S. 213, 218; see also Cal. Code Civ. Proc. § 1281.) The United States Supreme Court has mandated that courts enforce contractual arbitration clauses unless the arbitration clause cannot possibly be interpreted to encompass the claims at issue. (AT&T Technologies, Inc. v. Communication Workers of America (1986) 47 U.S. 643, 650.)! Courts may consider two questions when ruling on a motion to compel arbitration: First, whether the parties have executed an arbitration clause covering the dispute; and Second, whether one party has refused to abide by the arbitration clause. (Prima Paint Corp. v. Flood & Conklin Mfg. Co. (1967) 338 U.S. 395, 403-04.) If both questions are answered in the affirmative, the court HHA grant the motion to compel. (Id) “By its terms, the Federal Arbitration Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” (Dean Witter, supra, 470 U.S. at 218.) Here, Plaintiff executed an arbitration agreement and separately acknowledged in an employee handbook receipt that he agreed to arbitrate all disputes arising out of his employment. (See Lambert-Gaffney Decl. § 3-5, Exs. 2-3.) By bringing this action, Plaintiff now refuses to abide by his arbitration agreement. Applying the two-part inquiry above, the Court must enforce Plaintiff's arbitration agreement and grant this motion.? (See Prima Paint Corp., supra, 388 U.S. at 403-404.) Cs California Law Mandates Enforcement Of Plaintiff’s Arbitration Agreement Notwithstanding governance of the arbitration agreement in this case by the FAA, the result would be the same under the California Arbitration Act. The California Arbitration Act mandates that courts grant motions to compel arbitration where the parties have a valid agreement !' California courts have recognized that the FAA embraces a strong public policy in favor of arbitration. (Spellman v. Sec., Annuities & Ins. Servs, Inc. (1992) 8 Cal.App.4th 452, 458-459.) This policy in favor of arbitration applies equally in the employment context. (Circuit City Stores, supra, 532 U.S. at 123; see also Oblix, Inc. v. Winiecki (7th Cir. 2004) 374 F.3d 488, 491 (applying California law, court held that the FAA requires that form arbitration agreements be enforced to the same degree as any other form agreements; “[s]tandard form agreements are a fact of life . . 7.) 2 Federal and state courts have concurrent jurisdiction under FAA. The FAA creates a “substantive rule applicable in state as well as federal courts.” (Southland Corp. v. Keating (1984) 465 U.S. 1, 15-16; see also Vaden Discovery Bank (2009) 556 U.S. 49.) BN 35670168v1 7 DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION BUCHALTER n ~~ O N Wn to arbitrate: On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petition and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists. (Cal. Code Civ. Proc. § 1281.2.) Like Federal law, California law favors the enforcement of valid arbitration agreements. (Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 97.) The scope of arbitration agreements must be liberally construed and any doubts are to be resolved in favor of arbitration. (Cione v. Foresters Equity Servs. (1997) 58 Cal. App.4th 625, 641-42 (emphasis added); see also Posner v. Gunwald Marx, Inc. (1961) 56 Cal.2d 169, 183-184 (contractual provisions to arbitrate are to be liberally construed); 24 Hour Fitness, Inc. v. Superior Court (Munshaw) (1998) 66 Cal.App.4th 1199, 1215 (arbitration agreement in employee handbook found to be enforceable “because of the strong public policy in favor of arbitration” and because “courts will indulge every intendment to give effect to such proceedings™).) Under California law, courts must enforce arbitration agreements unless the party opposing arbitration demonstrates that the agreement is both procedurally and substantively unconscionable. (24 Hour Fitness, supra, 66 Cal.App.4th at 1212-1213 (citing Stirlen v. Supercuts, Inc. (1997) 51 Cal. App. 4th 1519, 1532-1533).) Procedural unconscionability focuses on two factors: oppression and surprise. (Fittante v. Palm Springs Motors, Inc. (2003) 105 Cal.App.4th 708, 723; Armendariz, supra, 24 Cal.4th at 114.) Surprise involves the extent to which the supposedly agreed-upon terms of the bargain are hidden in a prolix printed form drafted by the party seeking to enforce the disputed terms with no distinguishable headings or obvious indications that the applicant is giving up legal rights. (/d.) Substantive unconscionability focuses on the terms of the agreement and whether they are unduly harsh or unreasonably one-sided. (Armendariz, supra, 24 Cal.4th at 114.) Both substantive and procedural unconscionability must be present in order to invalidate an arbitration agreement. (Id.; Mission Viejo Emergency Med. Assocs. v. Beta Healthcare Group (2011) 197 Cal. App.4th 1146, 1159.) The rules of procedural and substantive unconscionability may not BN 356701681 8 DEFENDANT'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 97 28 BUCHALTER prevent enforcement of the basic agreement to arbitrate; rather, particular provisions may be subject to challenge on these grounds. (Spinello v. Amblin Entertainment (1994) 29 Cal.App.4th 1390, 1395.) Plaintiff cannot demonstrate procedural or substantive unconscionability here. The element of oppression is entirely lacking and Plaintiff cannot contend that he was surprised by an arbitration agreement that he acknowledged - in writing - that he read, understood and agreed to follow. (See Serafin, supra, 235 Cal.App.4th at 175-76 (enforceable arbitration agreement was set out in its own separate document and clearly labeled).) Further, Cheesecake provided the arbitration provisions and agreement in English and Spanish to ensure that Plaintiff understood its terms. (Lambert-Gaffney Decl., § 4-5, Exs. 2-3.) Furthermore, the arbitration agreement here is bilateral, does not limit Plaintiffs statutorily imposed remedies, allows for ample discovery by both parties, and Cheesecake has agreed to bear the costs of arbitration. (Lambert-Gaffney Decl., 95, Ex. 3, pg. 5.) The arbitration agreement, therefore, meets the Armendariz requirements and its terms must be enforced. D. The Parties Mutually Assented To Arbitrate Plaintiff’s Claims In the Complaint, Plaintiff alleges that his signature on the Arbitration Agreement is a forgery and the agreement is therefore not enforceable. But Plaintiff cannot now claim that the parties’ mutual assent to arbitrate does not exist. (See Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal. App.4th 165, 176 (an employer's right to modify its “policies or practices at any time” does not render an arbitration agreement illusory because California law prevents a party from exercising a discretionary power, such as the power to modify, in bad faith or in a way that deprives the other party of the benefits of the agreement).) In Harris, the plaintiff signed an acknowledgement form that included acknowledging receiving both the employee handbook and the arbitration agreement. (Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 383.) The plaintiff claimed that he never signed an agreement to arbitrate, but the acknowledgement form’s arbitration provision in the employee handbook stated that receipt and agreement to the mandatory arbitration policy is “an absolute prerequisite” to hiring and continued employment and specifically referenced the separate “Agreement to Arbitrate.” (/d.) The court held that the BN 35670168v1 9 DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BUCHALTER A PROFESSIONAL CORPORATION LOS ANGELES fact that the plaintiff either chose not to read or take the time to understand these provisions is legally irrelevant, and that an agreement to arbitrate may be express or implied so long as it is written. (/d.) Finally, the Agreement to Arbitrate was enforceable because plaintiff's commencement of performance under the employee handbook constituted assent to its terms. (Id. at 384.) Here, Plaintiff signed acknowledgement forms that included acknowledging receiving Cheesecake’s Staff Member Handbook (containing the arbitration provision) and acknowledging that his agreement to arbitrate under the terms of the “Mutual Agreement to Arbitrate Claims” was a condition of and consideration for the offer of employment by Cheesecake. (Lambert- Gaftney Decl., § 4, Exs. 1-2.) Accordingly, Plaintiff and Cheesecake mutually assented to arbitrate Plaintiff’s claims. E. Plaintiff’s Individual Claims Fall Within The Scope Of The Arbitration Agreement In the arbitration agreement, Plaintiff agreed to individually and separately arbitrate any and all disputes or claims between Plaintiff and Cheesecake that arise during, between or following the Plaintiff’s employment with Cheesecake. (Lambert-Gaffney Decl, § 5, Ex. 3, pg. 1-2.) Plaintiff also specifically agreed to arbitrate claims for discrimination, harassment, retaliation, wrongful termination, wages or other compensation due, and claims for violation of any federal or state statute or regulation. (Lambert-Gaffney Decl., § 5, Ex. 3, pg. 1-2.) Consequently, as every claim in the action arises out of his employment with Cheesecake and involves claims for wrongful termination and violations of the California Labor Code and Government Code, there can be no dispute that each of the Plaintiff’s claims fall within the scope of the arbitration agreement. F. The Court Should Stay All Further Proceedings Pending Its Ruling On this Motion And Dismiss Or Stay The Action Once The Motion Is Granted Pending Completion Of The Arbitration Code of Civil Procedure section 1281.4 mandates a stay of all further proceedings in a civil action pending the outcome of a motion to compel arbitration. Once the parties have been BN 356701681 10 DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BUCHALTER A PROFESSIONAL CORPORATION 1.05 ANGELES compelled to arbitrate, Section 1281.4 mandates a further stay or dismissal of proceedings pending the outcome of the arbitration. The statute states a follows: If an application has been made to a court of competent jurisdiction, whether in this State or not, for an order to arbitrate a controversy which is an issue involved in an action or proceeding pending before a court of this State and such application is undetermined, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until the application for an order to arbitrate is determined and, if arbitration of such controversy is ordered, until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies. (Cal. Code Civ. Proc. § 1281.4 (emphasis added).) Since Cheesecake has moved to compel individual arbitration of each of Plaintiff’s non- PAGA claims, section 1281.4 mandates a stay of the entire action pending the outcome of this motion. Once the Court grants the motion, Section 1281.4 mandates a dismissal or further stay of these proceedings pending the outcome of arbitration. (See Franco v. Arakelian (2015) 234 Cal. App.4th 947, 966.) IV. CONCLUSION Based on the foregoing, Cheesecake respectfully requests that this Court: (i) stay this action pending the outcome of this motion, (ii) enforce the arbitration agreement, (iii) order Plaintiff to arbitrate all of his claims pursuant to the arbitration agreement, and (iv) dismiss or stay the Action pending the outcome of the arbitration. DATED: March 4, 2019 BUCHALTER A Professional Corporation J CY oq Hoon TRACY A. WARREN Attorneys for Defendants THE CHEESECAKE FACTORY INCORPORATED and THE CHEESECAKE FACTORY RESTAURANTS, INC. By: BN 35670168v] 11 DEFENDANT’S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS AND STAY ACTION BUCHALTER Oo 0 9 O N Wn Bb 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A PROFESSIO] Nal CORPORATION los ANGELES PROOF OF SERVICE CASE NO. 37-2019-202223184 I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is at BUCHALTER, A Professional Corporation, 1000 Wilshire Boulevard, Suite 1500, Los Angeles, CA 90017-2457. On the date set forth below, I served the foregoing document described as: DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND DISMISS OR STAY ACTION; MEMORANDUM OF POINT AND AUTHORITIES on all other parties and/or their attorney(s) of record to this action by [J faxing and/or placing a true copy thereof in a sealed envelope as follows: Alreen Haeggquist Amber Eck HAEGGQIST & Eck, LLP 225 Broadway, Suite 2050 San Diego, CA 92101 Tel: 619-342-8000 Fax: 619-342-7878 Email: alreenh@haelaw.com ambere@haelaw.com M BY MAIL I am readily familiar with the business’ practice for collection and processing of correspondence for mailing with the United States Postal Service. The address(es) shown above is(are) the same as shown on the envelope. The envelope was placed for deposit in the United States Postal Service at Buchalter in Los Angeles, California on March 4, 2019. The envelope was sealed and placed for collection and mailing with first-class prepaid postage on this date following ordinary business practices. M [ declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct to the best of my knowledge. Executed on March 4,2019, at Los Angeles, California. Violet Carrera BN 35804976v1 PROOF OF SERVICE