declaration of clarice liu in support of defendant the esterle llcs re

Cal. Super. - 1st Dist.September 8, 2021

1 2 3 4 5 6 7 8 9 10 11 ~ ij 12 ~~ I- ~5 .... 13 < (/)~ ..Jffi~ E-!z~~ 14 z W .CD i;.;i 0 8l ~ o~re a:u- >,i~Z~ 15 o~~~ ..J a: u. Q,, < z 16 ~~~ i;.;i ~ :::> :) _o ..Ju. 17 18 19 20 21 22 23 24 25 26 27 28 CLARICE C. LIU (SBN 160555) LIU EMPLOYMENT LAW FIRM Four Embarcadero Center, Suite 1400 San Francisco, CA 94111 Telephone: (415) 288-8622 Facsimile: (415) 288-8633 Attorneys for Defendant The Esterle LLC, dba Travelodge By The Bay SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO UNLIMITED JURISDICTION CAROLINA MARTINEZ and CLAUDIA MORENO, Plaintiffs, v. THE ESTERLE LLC dba Travelodge by the Bay, and DOES 1 through 10, inclusive, Defendants. 1 Case No. CGC-19-581597 DECLARATION OF CLARICE LIU IN SUPPORT OF DEFENDANT THE ESTERLE LLC'S REPLY MEMORANDUM OF POINTS AND AUTHORITIES TO PLAINTIFFS' OPPOSITION TO DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS Date: October 8, 2020 Time: 9:30 a.m. Dept: 302 Trial Date: June 7, 2021 Judge: The Hon. Ethan P. Schulman DECLARATION OF CLARICE LIU IN SUPPORT OF DEFENDANT THE ESTERLE LLC'S REPLY MEMORANDUM OF POINTS AND AUTHORITIES TO PLAINTIFFS' OPPOSITION TO DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS ELECTRONICALLY F I L E D Superior Court of California, County of San Francisco 10/01/2020 Clerk of the Court BY: YOLANDA TABO-RAMIREZ Deputy Clerk 1 2 3 4 5 6 7 8 9 10 11 ~8 a:.., _ ... 12 '- ~ ~5 .... 13 Cl) .... < cti .JwOZ~ 0<3~:!, .J ~~ 16 Q.. ID< ~ a5 Cl) ~o:: 17 ::>5 -u.. .J 18 19 20 21 22 23 24 25 26 27 28 I, Clarice C. Liu, declare as follows: 1. I am the Principal Attorney with the Liu Employment Law Firm, attorney of record representing Defendant The Esterle LLC, dba Travelodge by the Bay, in this action. I am licensed to practice law before all courts of the State of California and have personal knowledge of the facts set forth herein and, if called upon to testify hereto, I could and would testify competently and truthfully thereto. 2. On September 1, 2020, I met and conferred by telephone with attorneys Ario Uriarte and Unkei Wu, attorneys of Plaintiffs Carolina Martinez and Claudia Moreno, regarding Defendant The Esterle LLC's Motion for Judgment on the Pleadings pursuant to Code of Civil Procedure section 439. 3. During the discussion, I identified all of the specific allegations that Defendant believes are subject to judgment, and we discussed the factual and legal support for the parties' respective position. However, the parties did not reach an agreement resolving the claims raised by the motion for judgment on the pleadings. 4. We also discussed a hearing date for the Motion for Judgment on the Pleadings, and we agreed to October 8, 2020 at 9:30 a.m. to set for the hearing. 5. Attached as Exhibit A is a true and correct copy of my email to Ario Uriarte and Unkei Wu on September 1, 2020 to confirm the discussion. 6. Subsequent to the meet and confer discussion, Defendant filed the instant Motion for Judgment on the Pleadings on September 14, 2020. 7. In response to Mr. Uriarte's characterization of Defendant's motion, we discussed various legal authorities, including Plaintiffs counsel's prior unsuccessful arguments on similar issues. The following consists of some of the published cases in which Mr. Uriarte's law firm Liberation Law Group had argued unsuccessfully on issues relating to preemption based on collective bargaining agreements and/or arbitration agreements: (a) Attached as Exhibit Bis a true and correct copy of the "Order Granting 2 DECLARATION OF CLARICE LIU IN SUPPORT OF DEFENDANT THE ESTERLE LLC'S REPLY MEMORANDUM OF POINTS AND AUTHORITIES TO PLAINTIFFS' OPPOSITION TO DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS 2 .., ., 4 5 6 7 8 9 10 11 :E a ~ ~ - ~ 12 l.l. w f-:s 5 ~ 13 (/) ~ < .;;: er m ..J ~<{N f- zU N 14 z~o~ L:.l og~ ~ er - N wU - 15 >- o~; 0 .,: er-Uu. ..J er z 16 Q. ;:; <{ ~ r5 (/) L:.l er :::l 6 17 - 11. ..J 18 19 20 21 22 23 24 25 26 27 28 Defendant's Motion to Compel Arbitration and Dismissing Case" on Borgonia v. G2 Secure Sta.fl LLC (N.D. Cal. 2019) 20 19 WL 1865927 (case dismissed based on arbitration provision); (b) Attached as Exhibit C is a true and correct copy of the "Order Granting Motion for Summary Judgment" in Angeles v. US Airways (N.D. Cal. 2017) 2017 WL 565006 1865927 (case di smissed based on collective bargaining agreement); (c) Attached as Exhibit D is a true and correct copy of the "Memorandum and Order Re: Motion to Remand" in Navarro v. Servisair (N.D. Cal. 2008) 2008 WL 3842984 (plaintiffs motion to remand denied based in part on collective bargaining agreement); (d) Attached as Exhibit E is a true and correct copy of the "Order Granting Defendant's Motion to Compel Arbitration" in Vargas v. Delivery Outsourcing LLC (N.D. Cal. 2016) 20 16 WL 946 11 2 (case stayed based on arbitration provision and compelled arbitration); ( e) Attached as Exhibit F is a true and correct copy of the publi shed opinions on Angeles v. US Ailways (9th Cir. 2020) 790 Fed.Appx. 878 (affirming case dismissal based on collective bargaining agreement). Executed this 30th day of September 2020 at San Francisco, California. I declare under penalty of pe1j ury under the laws of the St he foregoing is true and correct. CLARJCE C. LIU 3 DECLARATION OF CLARICE LIU IN SUPPORT OF DEFENDANT THE EST ERLE LLC'S REPLY MEMORANDUM OF POINTS AND AUTHORIT IES TO PLA INTIFFS' OPPOSIT ION TO DEFENDANrS MOTION FOR JUDGMENT ON THE PLEADINGS EXHIBIT A ccl@liuemploymentlaw.com From: Sent: To: Subject: Dear Mr. Uriarte and Ms. Wu, ccl@liuemploymentlaw.com Tuesday, September 1, 2020 5:35 PM 'Ario Garcia Uriarte'; 'unkei@liberationlawgroup.com' Martinez/Moreno v. The Esterle LLC I appreciate our meet and confer discussion today on Defendant The Esterle LLC's Motion for Judgment on the Pleadings. This will confirm that, based on your avai lability, the MJOP hearing will be set for October 8, 2020 at 9:30 am in Dept. 302. Thank you. Regards, Clarice C. Liu Attorney At Law LIU EMPLOYMENT LAW FIRM Four Embarcadero Center, Suite 1400 San Francisco, CA 94111 Tel: (415) 288-8622 Fax: (415) 288-8633 www.LiuEmploymentLaw.com 1 EXHIBIT B Borgonia v. G2 Secure Staff, LLC, Slip Copy (2019) 2019 Wage & Hour Cas.2d (BNA) 148,696 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 2019 WL 1865927 United States District Court, N.D. California, San Francisco Division. Arnulfo BORGONIA, et al., Plaintiffs, v. G2 SECURE STAFF, LLC, Defendant. Case No. 19-cv-00914-LB | Signed 04/25/2019 Attorneys and Law Firms Arlo Garcia Uriarte, Daniel P. Iannitelli, Ernesto Sanchez, Jonathan S. Rebong, Un Kei Wu, Liberation Law Group, P.C., San Francisco, CA, for Plaintiffs. Anna L. Padgett, Cara Felicia Sue Barrick, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., San Francisco, CA, for Defendant. ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION AND DISMISSING CASE Re: ECF No. 10 LAUREL BEELER, United States Magistrate Judge INTRODUCTION *1 Plaintiffs Arnulfo and Maria Borgonia sued their former employer G2 Secure Staff, LLC, claiming wage-and-hour violations, wrongful termination, and other violations of California law.1 The defendant moves to compel the plaintiffs to submit their claims to arbitration, citing arbitration agreements that the plaintiffs signed with G2.2 The court held a hearing on April 25, 2019. The court grants the motion to compel arbitration and dismisses the case. STATEMENT 1. The Arbitration Agreements The plaintiffs both worked for G2 at San Francisco International Airport (“SFO”), Mr. Borgonia as a wheelchair agent (starting in 1997) and Ms. Borgonia as a security screener, wheelchair agent, and dispatcher (starting in 2001).3 On October 27, 2005, each signed the following agreement:4 Pre-Dispute Resolution Agreement (Please read carefully) G2 Secure Staff, LLC (the “Company”) attempts to avoid disputes with employees and to resolve issues that arise in a fair, reasonable and expeditions manner. However, the Company recognizes that differences may arise with employees, during employment, or following employment separation. To provide a fast, fair and inexpensive means of resolving disputes between the Company and the employees, the Company has instituted a mandatory binding arbitration program. This binding arbitration program does not replace current or future company internal dispute mechanisms. It is the Company’s hope that most issues can be resolved internally between employees and their managers. However, if a dispute cannot be resolved between an employee and his/her manager, arbitration provides employees the avenue of having disputes heard and resolved quickly and efficiently by an experienced, neutral arbitrator. As part consideration for your employment, you and the Company agree that in the event a dispute arises between you and the Company (or its officers, directors, employees, representatives, successors, assigns, or agents in their capacity as such) regarding your employment, such disputes shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act. The obligation binds the Company as well as the employees. The agreement to arbitrate disputes does not prevent - -- - - - -- -WESll.AW Borgonia v. G2 Secure Staff, LLC, Slip Copy (2019) 2019 Wage & Hour Cas.2d (BNA) 148,696 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 employees from seeking relief with a state or federal administrative agency, such as the Equal Employment Opportunity Commission. The Agreement is that the employees and the Company shall have disputes resolved through binding arbitration rather than the courts of law. If you have a dispute that should go to arbitration, you and the Company will select an artitrator [sic] who will be subject to disqualification on the same grounds as would apply to a judge in a court of law. The Company will pay the fees and costs of the Arbitrator, unless prohibited by the jurisdiction in which you live or were last employed by the Company, in which case the Company and you will share the costs. You and the Company shall each pay for your own costs and attorney’s fees incurred, including costs of discovery, if any. To the extent permitted by applicable law, all rules of civil procedure and evidence shall apply to arbitrations, and you and the Company may conduct discovery, as would be available according to applicable law. You and the Company may introduce witnesses, including expert witnesses, and state law of the state in which the claim arose, or federal law, or both, as applicable to the claim asserted, including all possible remedies. The arbitrator is unable to apply any different substantive law or remedies. The arbitrator shall render a decision and all awards shall include a written, reasoned opinion. Both the Company and you agree that by agreeing to binding arbitration, you both give up the right to trial by a jury. *2 Either you or the Company may bring an action in any court of competent jurisdiction to compel the arbitration award. If either one of you is opposing enforcement of an award, you must bring a separate action in any court of competent jurisdiction to set aside the award, where the standard of review will be the same as that applied by an appellate court reviewing a decision of a trial court sitting without a jury. If you refuse to arbitrate a matter covered by this agreement, and if a court orders the matter to binding arbitration, you agree to pay the Company’s legal costs, including attorney’s fees, incurred in enforcing the agreement. This pre-dispute resolution agreement is not a contract of employment, expressed or implied. This agreement does not alter the “at will” status of your employment. Should any term or provision, or portion thereof, be declared void or unenforceable, it shall be severed and the remainder of this agreement shall be enforced. I have read and understand all of the above. I agree that by becoming an employee of G2 Secure Staff, LLC, I will resolve any disputes pertaining to my employment through binding arbitration.5 In the appropriate signature blocks, the plaintiffs each printed their names and signed and dated the agreement.6 They acknowledge now that their signatures are on the agreement but do not remember signing them.7 Whenever supervisors or Human Resources asked them to sign documents, it was at the beginning or end of a shift or during a break, and they were “just told to sign documents that were on the table ... No explanations were made, and [they] usually did not have time to either read the documents or ask anyone about what [they] were signing.”8 “Most likely, the Arbitration Agreement was mixed up with other blank documents that [they were] instructed to sign at the time.”9 ANALYSIS 1. Governing Law “The Federal Arbitration Act (FAA) requires courts to ‘place arbitration agreements on an equal footing with other contracts, and enforce them according to their terms.’ ” Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1259 (9th Cir. 2017) (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)). “Section 2 of the FAA makes agreements to arbitrate ‘valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ ” Id. (citing 9 U.S.C. § 2). “The final clause of § 2, generally referred to as the savings clause, permits agreements to arbitrate to be invalidated by ‘generally applicable contract defenses, such as fraud, duress, or unconscionability,’ but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” Id. (some internal quotation marks omitted) (quoting Concepcion, 563 U.S. at 339). “ ‘Any doubts about the scope of arbitrable issues, including applicable contract defenses, are to be resolved in favor of arbitration.’ ” Id. (quoting Tompkins v. 23andMe, Inc., 840 F.3d 1016, 1022 (9th Cir. 2016)). Arbitration agreements can cover Title VII claims, as long as the employee enters into the arbitration agreement “knowingly.” Ashbey v. Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 1323-24 (9th Cir. 2015). - - - - -- - - -- - WESll.AW Borgonia v. G2 Secure Staff, LLC, Slip Copy (2019) 2019 Wage & Hour Cas.2d (BNA) 148,696 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 *3 The FAA provides that arbitration agreements are unenforceable “upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “[G]enerally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements without contravening” federal law. Doctor’s Assoc., Inc. v. Casarotto, 517 U.S. 681, 687 (1996). The court determines whether the putative arbitration agreement is enforceable under the laws of the state where the contract was formed. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995); Ingle v. Circuit City Stores, 328 F.3d 1165, 1170 (9th Cir. 2003). In California, contractual unconscionability has both a procedural and a substantive component. Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 114 (2000). “In order to establish such a defense, the party opposing arbitration must demonstrate that the contract as a whole or a specific clause in the contract is both procedurally and substantively unconscionable.” Poublon, 846 F.3d at 1260 (citing Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899, 910 (2015)). “Procedural and substantive unconscionability ‘need not be present in the same degree.’ ” Id. (quoting Sanchez, 61 Cal. 4th at 910). “Rather, there is a sliding scale: ‘the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.’ ” Id. (quoting Sanchez, 61 Cal. 4th at 910). “Under California law, ‘the party opposing arbitration bears the burden of proving ... unconscionability.’ ” Id. (quoting Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 236 (2012)). 2. Application The plaintiffs do not dispute that the arbitration agreements fall within the scope of the FAA.10 Instead, they argue that (1) they are exempt from the FAA because they are transportation workers and (2) the agreements are unenforceable because they are unconscionable.11 2.1 Transportation-Worker Exemption The plaintiffs contend that they are transportation workers who are exempt from the FAA, which exempts from its coverage “all contracts of employment of seaman, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”12 9 U.S.C. § 1. The court holds that the plaintiffs are not transportation workers within the meaning of the FAA, and thus they are not exempt from the FAA. The court must assess whether the § 1 exemption applies before ordering arbitration. New Prime Inc. v. Oliveira, 139 S. Ct. 532, 537 (2019). Courts construe § 1 narrowly because the FAA embodies a policy strongly favoring arbitration. Circuit City Stores Inc. v. Adams, 532 U.S. 105, 119 (2001); Veliz v. Cintas Corp., No. C 03-1180 SBA, 2004 WL 2452851, at * 3 (N.D. Cal. Apr. 5, 2004); see Gilmer v. Interstatel Johnson Lane Corp., 500 U.S. 20, 25 (1991). “The plain meaning of the words ‘engaged in commerce’ is narrower than the more open-ended formulations ‘affecting commerce’ and ‘involving commerce.’ See, e.g., Gulf Oil Corp. v. Cop Paving Co., 419 U.S. 186, 195 (1974) (phrase ‘engaged in commerce’ appears to denote only persons or activities within the flow of interstate commerce’).” Circuit City, 532 U.S. at 118; see also id. at 112 (“Most Courts of Appeals conclude the exclusion provision is limited to transportation workers, defined, for instance, as those workers ‘actually engaged in the movement of goods in interstate commerce.’ ”) (citation omitted); id. at 115 (the broader terms “affecting commerce” and “involving commerce” refer to “Congress’[s] intent to regulate to the outer limits of its authority under the Commerce Clause”).13 *4 The plaintiffs provided services such as wheelchair assistance and security screening. They worked at SFO - admittedly a hub for interstate transportation - but they worked for a company (G2) that provided aviation services such as ground handling, passenger assistance, terminal services, and special services.14 Nothing in their jobs involved the interstate deliveries that exist in most cases applying § 1’s exclusion. See, e.g., New Prime, 139 S. Ct. at 536, 539-543 (driver for interstate trucking company qualified as a transportation worker under § 1, even if he was an independent contractor); Hardin v. Roadway Package Sys., Inc., 249 F.3d 1137, 1140-41 (9th Cir. 2001) (delivery driver was engaged in interstate commerce that was exempt from the FAA when he contracted to deliver packages throughout the United States, with connecting international service); Magana v. DoorDash, Inc., 343 F. Supp. 3d 891, 899 (2018) (collecting cases); Vargas v. Delivery Outsourcing, LLC, No. 15-cv-03408-JST, 2016 WL 946112, at *1, 4 (N.D. Cal. Mar. 14, 2016) (FAA exemption did not apply to luggage-delivery driver who delivered delayed luggage to travelers in the Bay Area); Veliz, 2004 WL 2452851, at *6 (collecting cases). Moreover, “where the transportation of - - -- - - - WESll.AW Borgonia v. G2 Secure Staff, LLC, Slip Copy (2019) 2019 Wage & Hour Cas.2d (BNA) 148,696 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 goods is not the bread and butter of the employer’s industry, a plaintiff who does not directly move goods herself is not exempt from the FAA.” Veliz, 2004 WL 2452851, at *1, 6 (sales representatives who delivered uniforms, picked up dirty uniforms for cleaning, restocked other supplies, and sold products were not “transportation workers” exempt from the FAA). G2 provides aviation services, not services related to the transportation of goods. The plaintiffs provide only these ancillary services in a geographic area, confined to SFO. In these circumstances, courts hold that § 1’s exemption does not apply. See, e.g., Vargas, 2016 WL 946112, at *4; see also Perez v. Globe Airport Security Serv., Inc., 253 F.3d 1280, 1283-84 (11th Cir. 2001) (pre-departure security agent at an international airport was not a “transportation worker” when she merely inspected and guarded goods in interstate commerce before their transport); Cole v. Burns Int’l Security Serv., 105 F.3d 1465, 1471 (D.C. Cir. 1997) (a security guard at a train station did not fall under the FAA’s exemption). The court follows these cases as persuasive and holds that the plaintiffs are not transportation workers and thus are not exempt under § 1 of the FAA. 2.2 Unconscionability The plaintiffs contend that the arbitration agreements are procedurally and substantively unconscionable. As the parties opposing arbitration, the plaintiffs bear the burden of proving unconscionability. 2.2.1 Procedural Unconscionability The plaintiffs have not born their burden of showing that the agreements are procedurally unconscionable. They contend that G2 rushed them into signing the agreements or effectively hid their importance. But the agreements here were stand-alone documents that cautioned the plaintiffs to read them carefully. The plaintiffs signed the agreements. No evidence supports a conclusion of procedural unconscionability. 2.2.2 Substantive Unconscionability To be substantively unconscionable, “the agreement must be ‘overly harsh,’ ‘unduly oppressive,’ ‘unreasonably favorable,’ or must ‘shock the conscience,’ ” i.e., the agreement’s terms must be “unreasonably favorable to the more powerful party.” Poublon, 846 F.3d at 1261 (citing cases). Here, the defendant will pay the costs of arbitration.15 It confirmed that at oral argument. Cf. Hughes v. S.A.W. Entm’t, Ltd., No. 16-cv-03371-LB, 2018 WL 4109100, at *8 (N.D. Cal. Aug. 29, 2018) (“The Ninth Circuit has indicated that an employer may take an arbitration agreement - originally unconscionable because it requires an employee to bear half the cost of arbitration - and renders it non-unconscionable by agreeing to bear the full cost of arbitration”) (citing Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1212 (9th Cir. 2016)). The plaintiffs have not shown that the agreements are substantively unconscionable in a way that bars enforcement of the arbitration provision. 3. Enforceability Under California Contract Law *5 The plaintiffs make two arguments: (1) they did not consent to the agreements because they did not read them, and (2) there is no consideration because they were employed when they signed the agreements.16 These arguments fail. First, the plaintiffs signed the agreements. “Under California law, a party can be bound by an arbitration clause even if he failed to read or understand it.” Reilly v. WM Financial Svcs., Inc., 95 Fed. Appx. 851, 852 (9th Cir. 2004) (citing Bolanos v. Khalatian, 231 Cal.App.3d 1586 (1991); Madden v. Kaiser Foundation Hospitals, 17 Cal. 3d 699 (1976)). Second, under California law, employers can implement policies that employees can accept by continuing their employment. Craig v. Brown & Root, Inc., 84 Cal. App. 4th 416, 420 (2000) (a party’s acceptance of an agreement to arbitrate may be express or implied-in-fact where the employee’s continued employment constitutes acceptance of the agreement); Asmus v. Pacific Bell, 23 Cal.4th 1, 11 (2000) (“California law permits employers to implement policies that may become unilateral implied-in-fact contracts when employees accept them by continuing their employment”). - --- - -- - WESll.AW Borgonia v. G2 Secure Staff, LLC, Slip Copy (2019) 2019 Wage & Hour Cas.2d (BNA) 148,696 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 CONCLUSION The court grants the motion to compel arbitration and dismisses the claim. Cf. Loewen v. Lyft, 129 F. Supp. 3d 945, 966 (N.D. Cal. 2015) (“Because the Court concludes that arbitration should be compelled, it has the discretion to stay the case under 9 U.S.C. § 3 or dismiss the litigation entirely. Neither side has presented any compelling reason to keep this case on the Court’s docket and the case is hereby dismissed.”) (citations omitted).17 This disposes of ECF No. 10. IT IS SO ORDERED. All Citations Slip Copy, 2019 WL 1865927, 2019 Wage & Hour Cas.2d (BNA) 148,696 Footnotes 1 Compl. - ECF No. 1‐1 at 5-6 (¶ 6). Citations refer to material in the Electronic Case File (“ECF”); pinpoint citations are to the ECF‐generated page numbers at the top of documents. 2 Mot. - ECF No. 10. 3 Compl. - ECF No. 1‐1 at 6 (¶ 9) & 8 (¶ 17); A. Borgonia Decl. - ECF No. 11 at 21 (¶ 5); M. Borgonia Decl. - ECF No. 11 at 25 (¶ 5). 4 Agreements - Elliot Decl. Exs. 1 & 2 - ECF No. 10‐1 at 6, 8. 5 Id. 6 Id. 7 A. Borgonia Decl. - ECF No. 11 at 22 (¶ 13); M. Borgonia Decl. - ECF No. 11 at 26 (¶ 12). 8 A. Borgonia Decl. - ECF No. 11 at 22 (¶ 13). 9 Id. (¶ 14). 10 Mot. - ECF No. 10 at 11 (“Defendant participates in ample interstate activity to bring the Arbitration Agreements under the purview of the FAA.”); Opp. - ECF No. 11 at 7 (“Plaintiffs adopt the conclusion that Defendant’s ‘multistate nature’ business operation satisfied the FAA’s commerce requirement.”). 11 Opp. - ECF No. 11 at 6, 10. 12 Id. at 10. 13 The exemption exists because by the time the FAA was passed, Congress had already enacted alternative employment‐dispute‐resolution schemes for many transportation workers and did not want to unsettle these arrangements in favor of whatever arbitration procedures the parties’ private contracts might contemplate. New Prime, 139 S. Ct. at 537 (citing Circuit City, 532 U.S. at 121); Circuit City, 532 U.S. at 121 (when the FAA was passed, grievance procedures existed for railroad employees under federal law, and a more comprehensive statute providing for the mediation and arbitration of railroad‐labor disputes was imminent). 14 Compl. - ECF No. 1‐1 at 5 (¶ 5). -- WESll.AW Borgonia v. G2 Secure Staff, LLC, Slip Copy (2019) 2019 Wage & Hour Cas.2d (BNA) 148,696 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 6 15 Reply - ECF No. 15 at 11. 16 Opp. - ECF No. 11 at 16-17. 17 The defendant raised objections to the declarations submitted with the plaintiffs’ opposition. Reply - ECF No. 15 at 13-14. Because the court finds in favor of the defendant and dismisses the case, the court declines to rule on this issue. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. WESlLAW EXHIBIT C Angeles v. US Airways, Inc., Not Reported in Fed. Supp. (2017) 2017 L.R.R.M. (BNA) 43,158, 2017 Wage & Hour Cas.2d (BNA) 43,158 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 2017 WL 565006 United States District Court, N.D. California. Joseph Timbang ANGELES, Noe Lastimosa, on behalf of themselves and on behalf of others similarly situated, and the general public, Plaintiffs, v. US AIRWAYS, INC., and Does 1 through 50, Defendants. No. C 12-05860 CRB | Signed 02/13/2017 Attorneys and Law Firms Brent Alan Robinson, Ernesto Sanchez, Un Kei Wu, Arlo Garcia Uriarte, Liberation Law Group, P.C., San Francisco, CA, for Plaintiffs. Adam P. Kohsweeney, Susannah Kelly Howard, O’Melveny & Myers LLP, San Francisco, CA, Robert Alan Siegel, O’Melveny and Myers LLP, Los Angeles, CA, for Defendants. ORDER GRANTING MOTION FOR SUMMARY JUDGMENT CHARLES R. BREYER, UNITED STATES DISTRICT JUDGE *1 After four-plus years of litigation, Defendant US Airways moves for summary judgment using recycled arguments, while Plaintiff class members (“Plaintiffs”) complain about the use of recycled arguments. Regrettably, at least one of those recycled arguments was correct-and dispositive-all along. I. BACKGROUND A. Legal Backdrop In California, “two complementary and occasionally overlapping sources of authority” govern wage-and-hour claims: (1) provisions in the Labor Code enacted by the state legislature, and (2) a series of wage orders enacted by the Industrial Welfare Commission (“IWC”). Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004, 1026 (2012). Wage Orders “are to be accorded the same dignity as statutes,” so to the extent they overlap with a provision in the Labor Code, courts must “seek to harmonize” the two. Brinker, 53 Cal. 4th at 1027. Both legal regimes regulate wages, hours, and working conditions. Id. And both exempt certain classes of employees from those regulations. Collins v. Overnite Transp. Co., 105 Cal. App. 4th 171, 177-80 (2003); see also, e.g., Cal. Labor Code § 511 (employees with alternative work weeks); id. § 554 (emergency, railway, and agriculture employees); Wage Order 9-901 § 3(H) (truckers). Among these exempt classes are employees who signed a collective bargaining agreement (“CBA”). Wage Order 9 section 1(E)-known as “the RLA Exemption”-exempts employees who have entered into a CBA “in accordance with the provisions of the Railway Labor Act.” By definition, then, the RLA Exemption applies only to railway and airline employees. See 45 U.S.C. §§ 151, 181. Section 514 of the Labor Code exempts employees who have entered into a CBA that “expressly provides for the wages, hours of work, and working conditions of employees, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage.” It applies across industries. See Cal. Labor Code § 514. Wage Order 9 section 3(N) also exempts airline employees who work “over 40 hours but not more than 60 hours in a workweek due to a temporary modification in the employee’s normal work schedule not required by the employer but arranged at the request of another employee,” such as when employees trade days off. B. Factual Background Plaintiffs are former employees of Defendant US Airways who worked as Fleet Service Agents. Two CBAs governed their employment, which the parties agree do not differ in any meaningful respect for the purpose of - - - - -- WEST Pi- Angeles v. US Airways, Inc., Not Reported in Fed. Supp. (2017) 2017 L.R.R.M. (BNA) 43,158, 2017 Wage & Hour Cas.2d (BNA) 43,158 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 summary judgment.2 See MSJ at 2; MSJ Opp’n at 1. In their first cause of action, Plaintiffs allege that US Airways did not properly pay them under Section 510 of the Labor Code for overtime hours worked (1) after trading shifts with fellow employees, and (2) while clocked-in during designated Grace Periods before and after their scheduled shifts. See TAC ¶¶ 20, 25, 31-33, 51-53. Based in part on those claims, Plaintiffs also bring claims for inaccurate wage statements (Third Cause of Action), id. ¶¶ 63-66, waiting time penalties (Fifth Cause of Action), id. ¶¶ 74-79, violations of the Unfair Competition Law (Sixth Cause of Action), id. ¶¶ 80-96, and violations of the Private Attorneys General Act (Seventh Cause of Action), id. ¶¶ 97-106.3 C. Procedural History *2 A comprehensive chronicle of this four-year litigation could snuff out the soul of even wage-and-hour law’s most avid afficionado, so the Court focuses on the most relevant parts. 1. First Motion to Dismiss As relevant here, US Airways moved to dismiss Plaintiffs’ overtime claims because the RLA Exemption “[e]xempts US Airways from [i]ts [o]vertime [p]rovisions.” See FMTD (dkt. 6) at 5. That being so, US Airways argued that “Wage Order No. 9’s overtime provision does not apply.” Id. at 6. Because both operative CBAs “were entered into in accordance with the provisions of the” Railway Labor Act, as required by the RLA Exemption, the Court agreed. Order on FMTD (dkt. 23) at 8; see also 45 U.S.C. §§ 151-65. It thus granted the motion “insofar as the overtime claim” was “premised on a violation of Wage Order 9[ ].” Id. In a sprinkling of footnotes, US Airways also added that California Labor Code section 514 excused US Airways from complying with Section 510’s overtime requirements. See FMTD at 6 n.4; FMTD Reply (dkt. 21) at 3 n.1. But because the CBAs did not meet all of Section 514’s requirements, the Court disagreed. Order on FMTD at 8-9. Specifically, the CBAs failed to “provide premium wage rates for all overtime hours worked.” Order on FMTD at 8-9. So although their Wage Order 9 overtime claims were dead on arrival, their Section 510 overtime claims remained very much alive. See id. at 19. 2. Request for Leave to File Motion to Reconsider Order on FMTD US Airways next requested leave to file a motion for reconsideration regarding the Court’s holding on the Section 510/514 issue, arguing that the parties had not submitted adequate briefing on the proper meaning of “all overtime hours” in Section 514.4 See MTR (dkt. 29) at 4. The Court denied the request, given that US Airways must have known about the issue but did not brief it in detail. See Order on MTR (dkt. 38) at 2. 3. Motion for Judgment on the Pleadings After Plaintiffs’ filed their third amended complaint, US Airways moved for judgment on the pleadings as to Plaintiffs’ Section 510 overtime claims based on two separate grounds. First, US Airways argued that the RLA Exemption protected it not just from Wage Order 9 overtime claims but also from Section 510 overtime claims. See MJP (dkt. 57) at iv (arguing that the RLA Exemption applies to “the overtime requirements of both the wage order and the Labor Code”). Second, US Airways argued that Wage Order 9 section 3(N)-also known as “the Voluntary Modification Exemption”-protected it against Section 510 overtime claims based on work done “pursuant to voluntary shift trades” resulting in workweeks longer than 40 hours but less than 60 hours. Id. at 7-8. On reply, US Airways stressed that it had “never argued” and that the Court had “never decided” whether the RLA Exemption excused it from Section 510’s requirements, rather than just from Wage Order 9’s. See MJP Reply (dkt. 73) at iv. It also maintained that the Court had “never considered” the Voluntary Modification Exception. Id. Nevertheless, the Court denied the motion for judgment on the pleadings, reasoning that it had “addressed the same arguments at the motion to dismiss phase.” Order on MJP (dkt. 75) at 1-2. WEST If, Angeles v. US Airways, Inc., Not Reported in Fed. Supp. (2017) 2017 L.R.R.M. (BNA) 43,158, 2017 Wage & Hour Cas.2d (BNA) 43,158 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 4. Motion for Summary Judgment *3 US Airways now moves for summary judgment, arguing that it is protected from Plaintiffs’ Section 510 overtime claims for three separate (and by now familiar) reasons. First, US Airways argues that Section 514’s exemption applies, particularly in light of Vranish v. Exxon Mobil Corp., 223 Cal. App. 4th 103 (2014). See MSJ at iv-v; 5-8. Second, US Airways argues that the RLA Exemption in Wage Order 9 excuses it not just from Wage Order 9’s own overtime requirements but Section 510’s as well. See id. at v-vi; 8-13. Third, US Airways argues that the Voluntary Modification Exemption in Wage Order 9 protects it from Section 510 overtime claims relating to work done pursuant voluntary shift trades, so long as they resulted in workweeks no more than 60 hours long. See id. at vi-vii; 13-14. That being so, US Airways maintains that Plaintiffs’ claims for inaccurate wages statements (Third Cause of Action), waiting time penalties (Fifth Cause of Action), violations of the Unfair Competition Law (Sixth Cause of Action), and violations of the Private Attorneys General Act (Seventh Cause of Action), also fail in part as a result. Plaintiffs cry foul. See MSJ Opp’n (“Response to Defendant’s Noncompliant Motion for Reconsideration, Miscaptioned as a Motion for Summary Judgment”). II. LEGAL STANDARD The Court may grant a motion for summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. Proc. 56(a). A principal purpose of summary judgment “is to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict” for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it could affect the outcome of the suit under the governing law. Id. at 248-49 (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288 (1968)). The Court must view the evidence in favor of the non-moving party. Id. at 255. III. DISCUSSION The RLA Exemption in Wage Order 9 exempts US Airways from complying with Section 510’s overtime requirements, and so the Court need not reach US Airways’s other arguments regarding Section 514’s exemption and the Voluntary Modification Exemption. Exemptions found in a valid 1997 wage order apply to regulations in the California Labor Code. See, e.g., Collins v. Overnite Transp. Co., 105 Cal. App. 4th 171, 177-80 (2003) (holding that the motor carrier exemption in Wage Order 9 exempted the defendant from the requirements of Section 510, among other provisions); Cal. Labor Code § 515(b)(2) (“... Except as otherwise provided in this division, the commission may review, retain, or eliminate an exemption from provisions regulating hours of work that was contained in a valid wage order in effect in 1997.”). As the Court held at the motion to dismiss stage, the RLA Exemption is such an exemption-and the operative CBAs here fall within its scope. See Order on FMTD at 8. US Airways therefore need not comply with the overtime requirements in Wage Order 9 or those in Section 510. Plaintiffs’ First Cause of Action fails as a matter of law. Plaintiffs counter with the arguments they presented in opposition to US Airways’s motion for judgment on the pleadings, see MSJ Opp’n at 14 (stressing that they made these arguments “in great detail”), as well as a veritable mountain of legislative history, see Robinson Decl. (dkt. 120); Exhibits (dkt. 121-142). At its core, their argument is that Section 514 of the Labor Code “tied the IWC’s hands with regard to overtime exemptions [in its Wage Orders] involving collective bargaining agreements.” MJP Opp’n at 6. In other words, a CBA must meet the “baseline” requirements of Section 514 to excuse an employer from complying with Section 510, even if the CBA otherwise meets the criteria for the RLA Exemption. See id. *4 Not so. Section 514 and the RLA Exemption provide two distinct ways for a CBA to exempt workers from Section 510’s overtime requirements. Section 514 lays out its own safeguards and applies across industries; the RLA Exemption relies on safeguards in the federal Railway Labor Act and applies only to railway and airline workers. Compare Cal. Labor Code § 514, with Wage Order 9 § 1(E). There is no conflict. And since the Court must “affirm, to the extent possible, the integrity of both” the Labor Code and the IWC’s Wage Orders “as part of a single scheme of regulation,” Collins, 105 Cal. App. 4th at 180, Plaintiffs’ argument does not get off the ground.5 In all candor, US Airways’s motion for judgment on the pleadings should have been granted. Although the Court is generally loathe to go back on a prior order, the law of the case doctrine does not preclude it from correcting an -- WEST Pi- Angeles v. US Airways, Inc., Not Reported in Fed. Supp. (2017) 2017 L.R.R.M. (BNA) 43,158, 2017 Wage & Hour Cas.2d (BNA) 43,158 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 erroneous ruling if justice so requires. See, e.g., City of Los Angeles v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir. 2001) (“As long as a district court has jurisdiction over the case, then it possesses the inherent procedural power to reconsider, rescind, or modify an interlocutory order....” (citation omitted)). And here that is indeed what justice requires.6 IV. CONCLUSION For the foregoing reasons, the Court GRANTS the motion for summary judgment on Plaintiffs’ overtime claims (First Cause of Action), as well as on their claims for inaccurate wage statements (Third Cause of Action), waiting time penalties (Fifth Cause of Action), violations of the Unfair Competition Law (Sixth Cause of Action), and violations of the Private Attorneys General Act (Seventh Cause of Action) to the extent that they rely on Plaintiffs’ overtime claims. IT IS SO ORDERED. All Citations Not Reported in Fed. Supp., 2017 WL 565006, 2017 L.R.R.M. (BNA) 43,158, 2017 Wage & Hour Cas.2d (BNA) 43,158 Footnotes 1 Because the IWC revises its wage orders from time to time, they are denoted by year. For example, Wage Order 9-90 refers to the 1990 version, while Wage Order 9-2001 refers to the 2001 version. References to “Wage Order 9” refer to the 2001 version unless otherwise noted. 2 The parties also do not dispute that Plaintiffs entered into the CBAs in accordance with the Railway Labor Act (“RLA”). See MSJ at 1-3; MSJ Opp’n at 1-3. 3 Plaintiffs also brought claims for failure to pay minimum wage for hours worked during the Grace Periods under Labor Code section 1194 and Wage Order 9 section 4 (Second Cause of Action), TAC ¶¶ 56-61, as well as for failure to reimburse for work‐related expenses under Labor Code section 2802 (Fourth Cause of Action), id. ¶¶ 67-71. Those claims are not at issue on summary judgment. See MSJ at iv-vii (no mention of either claim, though the former remains alive); Mot. for Class Cert. (dkt. 64) at 2 (“Plaintiffs are no longer pursuing their § 2802 claim.”). 4 The Court acknowledges that, although this was an open question at the time, the weight of authority now cuts against its earlier decision. See, e.g., Vranish v. Exxon Mobil, 223 Cal. App. 4th 103, 109-11 (2014); Kilbourne v. The Coca‐Cola Co. et al., 2014 WL 11397891, at *7 (S.D. Cal. July 11, 2014). But, as will become apparent, the Court need not revisit the issue here. 5 It also makes no difference that the IWC has authority to “review, retain, or eliminate” an exemption “[e]xcept as otherwise provided in this division.” See MJP Opp’n at 5 (quoting Cal. Labor Code § 515(b)). The latter clause only means that the IWC may not, for example, “eliminate” statutory exemptions, like Section 514. It may still do what it wants with Wage Order exemptions, like the RLA Exemption. The problem for Plaintiffs’ is that the IWC has indeed “retained” the RLA Exemption. 6 Plaintiffs also insist that liability on its overtime claims is “no longer in issue,” leaving only damages to be sorted out. MSJ Opp’n at 6. No. The parties agreed that “they will be able to resolve liability issues pertaining to Plaintiff’s First Cause of Action ...through motion practice” and that they would “be able to stipulate to hours worked and rates of pay for any potential damages issues.” Id. (quoting 9/18/15 Case Mgmt. Statement (dkt. 95) at 2) (emphasis added). That “a trial” on an issue might ultimately be “unnecessary,” id., does not mean that liability has been resolved. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. EXHIBIT D Navarro v. Servisair, LLC, Not Reported in F.Supp.2d (2008) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Declined to Extend by Vasserman v. Henry Mayo Newhall Memorial Hosp., C.D.Cal., December 5, 2014 2008 WL 3842984 Only the Westlaw citation is currently available. United States District Court, N.D. California. Robert NAVARRO, on behalf of himself and others similarly situated, Plaintiff, v. SERVISAIR, LLC, and Does 1 through 50, Defendants. No. C 08-02716 MHP. | Aug. 14, 2008. Attorneys and Law Firms Arlo Garcia Uriarte, Jason Joseph Szydlik, Liberation Law Group, San Francisco, CA, Jennifer Rue Kramer, Judith Amanda Wiederhorn, Jennifer Kramer Legal, APC, Los Angeles, CA, for Plaintiff. Jennifer P. Svanfeldt, Rebecca Dianne Eisen, Morgan Lewis & Bockius LLP, San Francisco, CA, Jill Ann Porcaro, Morgan, Lewis & Bockius, Los Angeles, CA, for Defendants. MEMORANDUM & ORDER Re: Motion to Remand MARILYN HALL PATEL, District Judge. *1 On April 24, 2008 plaintiff Robert Navarro, on behalf of himself and others similarly situated, brought an action against Servisair, LLC (“Servisair”) in the Superior Court of California for the County of San Francisco. See Docket No. 1, Exh. A (hereinafter “Complaint”). Defendant filed its answer on May 29, 2008 and removed the action to the Northern District of California the same day. Plaintiff now moves to remand this action back to state court. The court has considered the parties’ arguments fully, and for the reasons set forth below, the court rules as follows. BACKGROUND Navarro claims his employer, Servisair, inadequately compensates him while he is in Servisair’s employ. Id. Servisair provides aviation ground services. Specifically, it provides airline ramp services, cabin cleaning services and cabin search services. Allen Dec., Exh. D. All of the putative class members, as defined in the complaint, are or were employed in California and all of the claims seek relief pursuant to the California Labor Code. Specifically, plaintiff makes claims for: 1) unpaid wages; 2) missed meal periods; 3) unpaid overtime wages; 4) unlawful deductions from wages; 5) improper wage statements; 6) waiting time penalties; and 7) restitution of unpaid wages under California’s Unfair Competition Act. See Complaint. Servisair claimed the following bases for federal court jurisdiction in its notice of removal: 1) federal question jurisdiction based on preemption of state law claims by the Airline Deregulation Act (“ADA”); 2) federal question jurisdiction based on preemption of state law claims by the Labor Management Relations Act (“LMRA”) and the Railway Labor Act (“RLA”) because resolution of the claims at issue requires interpretation of the collective bargaining agreement (“CBA”) between the parties; and 3) diversity jurisdiction based on the individual plaintiff’s claims for over $75,000 and the class’s claims for over $5 million under the Class Action Fairness Act of 2005 (“CAFA”). See Docket No. 1. LEGAL STANDARD Removal under 28 U.S.C. section 1441(b) is permitted for actions over which a federal district court could have exercised original jurisdiction. The removing party bears the burden of establishing that removal is proper. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir.1990). The removal statutes are strictly construed such that any doubts are resolved in favor of remand. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992). - - -- WESll.AW Navarro v. Servisair, LLC, Not Reported in F.Supp.2d (2008) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 DISCUSSION Plaintiff claims none of the three bases for federal jurisdiction cited by defendant have merit. First, he claims defendant has failed to demonstrate preemption of state law claims by the ADA, which requires a showing that the claims pled will result in the regulation of rates, routes or services of an air carrier. Defendant does not take issue with this argument and seems to have withdrawn this basis for jurisdiction. Consequently, the court will not discuss this further. Second, plaintiff claims federal question jurisdiction is unavailable because defendant has failed to demonstrate preemption of state law claims by the LMRA and the RLA, which requires a showing that resolution of the claims will require interpretation of a collective bargaining agreement. Finally, plaintiff claims diversity of citizenship jurisdiction under 28 U.S.C. section 1332 or the CAFA pursuant to 28 U.S.C. section 1453 is also unavailable because defendant has failed to demonstrate that each member of Servisair is not a citizen of California and because defendant has not provided a factual basis for concluding that plaintiff’s amount in controversy exceeds $75,000 or that the class claims exceed $5,000,000. I. Federal Question Jurisdiction *2 Defendant removed this action to this court based upon federal question jurisdiction by claiming that Navarro’s claims were preempted by: 1) section 301 of the LMRA; and 2) section 151 of the RLA. A. LMRA The LMRA provides, under section 301: Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties. 29 U.S.C. § 185(a). Although the language of section 301 is limited to “[s]uits for violation of contracts,” the Supreme Court has expanded section 301 preemption to include cases the resolution of which “is substantially dependent upon analysis of the terms of [a collective bargaining agreement].” Allis-Chalmers v. Lueck, 471 U.S. 202, 220, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). B. RLA The RLA established a mandatory arbitral mechanism for “the prompt and orderly settlement” of two classes of disputes. Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252, 114 S.Ct. 2239, 129 L.Ed.2d 203 (1994) (citing 45 U.S.C. § 151a). The first class, those concerning “rates of pay, rules or working conditions,” are deemed “major” disputes. Id. Major disputes relate to “the formation of collective [bargaining] agreements or efforts to secure them.” Id. (quotation omitted). The second class of disputes, known as “minor” disputes, “gro[w] out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions.” Id. at 252-53 (citing 45 U.S.C. § 151a). Minor disputes involve “controversies over the meaning of an existing collective bargaining agreement in a particular fact situation.” Id. at 253 (citing Trainmen v. Chicago R. & I.R. Co., 353 U.S. 30, 33, 77 S.Ct. 635, 1 L.Ed.2d 622 (1957)). Thus, “major disputes seek to create contractual rights, minor disputes to enforce them.” Id. C. Law of Preemption The preemption analysis under both federal statutes is identical. Hawaiian Airlines, 512 U.S. at 263 (“Given this convergence in the pre-emption standards under the two statutes, we conclude that Lingle provides an appropriate framework for addressing pre-emption under the RLA, and we adopt the Lingle standard to resolve claims of RLA pre-emption.”). Lingle, which discussed LMRA preemption, held that “an application of state law is preempted by [the LMRA] ... only if such application requires the interpretation of a collective bargaining - -- -- -- -- WESll.AW Navarro v. Servisair, LLC, Not Reported in F.Supp.2d (2008) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 agreement.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 421, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988). However, “when the meaning of contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished.” Livadas v. Bradshaw, 512 U.S. 107, 124, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994) (citing Lingle, 486 U.S. at 413); see also Atchison, Topeka and Santa Fe Ry. Co. v. Buell, 480 U.S. 557, 564-65, 107 S.Ct. 1410, 94 L.Ed.2d 563 (1987) (the RLA does not pre-empt “substantive protection ... independent of the [CBA]”). *3 Thus, all employment disputes where a CBA is in effect are not preempted by the LMRA or the RLA. Specifically, “nonnegotiable state-law rights ... independent of any right established by contract” are not preempted. Allis-Chalmers, 471 U.S. at 213. In other words, the LMRA and RLA do not preempt claims to vindicate state law rights that are: 1) independent; and 2) nonnegotiable such that they cannot be bargained away in a CBA. Miller v. A T & T Network Sys., 850 F.2d 543, 545-47 (9th Cir.1988) (no preemption if plaintiff seeks to pursue state-law claims that rest on “independent, nonnegotiable state-law rights”); see also Valles v. Ivy Hill Corp., 410 F.3d 1071, 1081 (9th Cir.2005) (California’s statutorily guaranteed meal periods are never subject to waiver by a collective bargaining agreement). D. Analysis It is undisputed that the employment relationship between the parties here is governed by a CBA. Allen Dec., Exh. A. Defendant argues that plaintiff’s fourth claim for “unlawful deduction from wages” under the California Labor Code sections 221 and 223 is in actuality a breach of contract claim under the guise of a state law cause of action. Plaintiff’s complaint states that “DEFENDANTS have violated Labor Code §§ 221, 223, and IWC order No. 9, §§ 8 & 9 by unlawfully taking deductions from PLAINTIFFS’ and similarly situated employees compensation to cover health benefits that were neither requested nor received.” Complaint, ¶ 61 (emphasis added). Article V of the CBA discusses rates of pay and states that “[p]rovisions governing hourly rates of pay shall be set forth in Local Supplemental Agreements in accordance with Article XX of this National Agreement.” Allen Dec., Exh. A at 6. Article V of the Local Supplement states: Effective January 1, 2007 $11.50 per hour shall be the minimum wage rate in effect for Full time Ramp Agents, Aircraft Cleaners, and GSE Mechanics, and adjusted on each January 1 thereafter, based on the annual percentage change in the Bay Area Cities Consumer Price Index as published by the San Francisco Airport Commission pursuant to the San Francisco International Quality Standards Program (QSP). These wages reflect the ‘with benefits’ rate called for in the QSP. Effective January 1, 2007 $12.75 per hour shall be the minimum wage rate in effect for Part time Ramp Agents, Aircraft Cleaners, and GSE Mechanics and adjusted on each January 1 thereafter, based on the annual percentage change in the Bay Area Cities Consumer Price Index as published by the San Francisco Airport Commission pursuant to the San Francisco International Quality Standards Program (QSP). These wages reflect the ‘without benefits’ rate called for in the QSP. Id., Exh. B at 3. Furthermore, defendant’s Vice President of Human Resources, Craig Allen, testified that according to prior versions of the San Francisco International Quality Standards Program (“QSP”), the difference between the higher and lower hourly rate has always been $1.25. Allen Dec., ¶ 25. *4 The QSP sets forth a number of benefits that must be provided to covered employees. In addition to setting forth standards on paid days off and un-paid leave, it states that “[c]ompany paid membership in a group medical plan should be at least equivalent to the group rate of an HMO membership with the most members in California.” Id., Exh. C at 3. Allen testified that “with benefits” under the QSP includes employee receipt of some or all the following benefits: 1) vacation; 2) sick days; and 3) health care coverage. Id., ¶ 23. Offering these three benefits is mandated by the QSP. See id., Exh. D. Furthermore, Servisair is required to offer its employees “the option of making a compensation selection of the lower rate plus the aforementioned three benefits or the higher rate without them.” Id., ¶ 23. In sum, the CBA incorporates both the Local Supplemental and the QSP, which contain provisions about what benefits must be provided and the associated rate of pay. Consequently, interpretation of any one of these three documents requires interpretation of the CBA. There is no argument here that the CBA purports to waive the rights guaranteed by California Labor Code sections 221 and 223. It is established law in this Circuit that sections 221 and 223 are non-negotiable. See Valles, 410 -- WESll.AW Navarro v. Servisair, LLC, Not Reported in F.Supp.2d (2008) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 F.3d 1082 (rights defined in California Labor Code section 200 et seq. are never subject to waiver by a CBA and therefore do not require interpretation of the CBA). Thus, the only task before the court is to analyze the first prong: whether resolution of plaintiff’s claims are “independent of any right established by the contract.” Allis-Chalmers, 471 U.S. at 213. “Independent rights are those state-law rights that can be enforced without any need to rely on the particular terms, explicit or implied, contained in the labor agreement.” Miller, 850 F.2d at 546. In paragraph sixty-one of his complaint, plaintiff seems to allege that he was paid the lower wage rate even though he did not request nor receive health benefits. This, he claims, led to a breach of California Labor Code sections 221 and 223. Section 221 of the California Labor Code states: “It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee.” Cal. Lab.Code § 221. Additionally, section 223 states: “Where any statute or contract requires an employer to maintain the designated wage scale, it shall be unlawful to secretly pay a lower wage while purporting to pay the wage designated by statute or by contract.” Id. § 223. Plaintiff has not presented violations of any statute that requires Servisair to maintain a designated wage scale. Consequently, the court assumes that the invocation of California Labor Code section 223 must relate to a contract. The only contracts at issue here are the CBA, the Local Supplemental and the QSP. Allegations of breach of any of these with respect to the provision of health benefits and wages related to the same converts this cause of action into a claim for the breach of the CBA. This cause of action may therefore raise a colorable federal question. See BIW Deceived v. Local S6, 132 F.3d 824, 832 (1st Cir.1997) (“the artful pleading doctrine permits a district court to recharacterize a putative state-law claim as a federal claim when a review of the complaint, taken in context, reveals a colorable federal question within a field in which state law is completely preempted.”). *5 Plaintiff argues that since Servisair gives its employees “the option of making a compensation selection of the lower rate plus the aforementioned three benefits or the higher rate without them,” the resolution of this action depends not on interpretation of the contract, but on factual circumstances surrounding plaintiff’s choices. Plaintiff alleges that he did not request nor receive health benefits. This line of reasoning, however, is unpersuasive. Here, defendant could claim that it was allowed to pay the lower rate even if health insurance was offered and rejected. Specifically, the court will have to resolve these two questions: 1) whether employees who are offered health benefits but decline them may be paid the lower hourly rate; and 2) whether employees who receive two of the three benefits provided by the QSP may be paid the lower hourly rate. Resolution of both these questions may require interpreting the scope of the base-pay rate provision of the CBA. At the hearing on this matter, plaintiff also claimed that a written authorization is necessary to deduct monies designed to cover health care benefits. What plaintiff does not realize, however, is that the collective bargaining agreement could be that written authorization. In sum, when plaintiff’s state-law claims as stated in his fourth cause of action are recharacterized, they pass the colorability test. They are thus arguably preempted. This action therefore requires more than mere consultation with the CBA, it can require actual interpretation of the CBA. The court does not now determine if any of plaintiff’s causes of action are actually preempted, but leaves the resolution of this question for another day. The court simply holds that enough of a federal question is presented here such that the court may exercise jurisdiction at this stage without finding any of plaintiff’s causes of action actually preempted. The remaining causes of action, which stem from a common nucleus of operative fact, are also properly in this court because of this court’s supplemental jurisdiction. See 28 U.S.C. § 1367(a). In the alternative, the court also finds that diversity jurisdiction is present here. II. Diversity Jurisdiction A. Diversity of Parties Plaintiff claims that defendant, a limited liability company (“LLC”) must demonstrate that each of its members is diverse from plaintiff because the citizenship of an LLC is the citizenship of its members. See Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir.2006). Defendant agrees, and presents evidence that it is owned by two holding companies, both of whom are Delaware corporations. Allen Dec, ¶¶ 4-10. Specifically, Servisair Holding Corp. owns 64.2% of defendant Servisair and Penauille Holdings Inc. owns 35.8% of defendant Servisair. The corporate headquarters of both holding companies are located in Texas and nobody on their Boards of Directors resides in California. Id. -- WESll.AW Navarro v. Servisair, LLC, Not Reported in F.Supp.2d (2008) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 *6 Defendant then argues that it cannot be considered a citizen of California for diversity purposes because it is incorporated in Delaware and its principal place of business is in Texas as all of its operations are centered there. Id., ¶ 17. Specifically, defendant argues, at length, that it is not a citizen of California under either the “nerve center” theory or the “place of operations” theory even though a quarter of its employees are located here and it receives 28% of its revenues from California. Id., ¶¶ 12, 15. More of defendant’s employees reside in California and it receives more of its revenues from California than from any other state. Id. However, defendant also employs a substantial number of individuals in New York and Illinois and receives a substantial amount of its revenue from those states. Id. Consequently, Servisair argues that there is no one state where Servisair’s activities predominate. This argument, however, misses the mark because for diversity purposes, the state of incorporation and primary place of business of the LLC are irrelevant. Here, the residence inquiry focuses on the LLC members. Defendant states that neither Servisair Holding Corp. nor Penauille Holding Inc. hold any tangible property or generate any revenue apart from their interest in Servisair. Allen Dec, ¶¶ 7, 10. Furthermore, neither corporation has any employees. Id., ¶¶ 5, 8. Though defendant summarily states that neither holding company’s business operations predominate in California, id., there is no evidence to the contrary. Thus, although only minimal diversity is required under 28 U.S.C. section 1332(d)(2)(A), complete diversity of citizenship exists between the named plaintiff and the defendant. Plaintiff contends that defendant’s failure to specify its members’ residence in the notice of removal is determinative. Specifically, he claims that allegations set forth in defendant’s opposition to the motion to remand are time-barred and prohibited. The court finds that defendant’s notice of removal was deficient as originally filed because it alleged citizenship in a conclusory manner. See Docket No. 1, ¶ 11 (alleging Servisair’s residence as a corporation, not an LLC). However, for the reasons set forth below, the court considers defendant’s opposition as an amendment to its notice of removal and rejects plaintiff’s argument to the contrary. It is well settled that a defendant’s notice of removal may be amended freely prior to the expiration of the initial thirty-day removal period established by 28 U.S.C. section 1446. See Barrow Dev. Co. v. Fulton Ins. Co., 418 F.2d 316, 318 (9th Cir.1969) (allowing amendment where allegations of jurisdiction were “defective in form but not so lacking in substance as to prevent their amendment”); Smiley v. Citibank, 863 F.Supp. 1156, 1162 (C.D.Cal.1993); 28 U.S.C. § 1653. After the thirty-day removal period, case law indicates that the notice may be amended “only to set out more specifically the grounds for removal that already have been stated, albeit imperfectly, in the original notice.” C. Wright, A. Miller & M. Kane, Federal Practice & Procedure § 3733 at 358 (3d ed.1998). Furthermore, construing a defendant’s opposition to a motion for remand as an amendment to its notice for removal is proper. See Willingham v. Morgan, 395 U.S. 402, 407 n. 3, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969). *7 Defendant argues that it does not offer new bases for removal, but only explains and clarifies previously asserted bases. Taking defendant’s argument to the logical extreme would allow removing defendants to merely state that they are removing “based on federal question jurisdiction and diversity jurisdiction.” The removing defendants can then wait until a motion to remand is filed in order to provide factual support. Case law, however lenient, does not support this conclusion. Defendant’s heavy reliance upon this court’s decision in Alexander v. FedEx Ground Package System, Inc., No. C 05-0038 MHP, 2005 WL 701601 (N.D.Cal. March 25, 2005) (Patel, J.), is to no avail because it is factually distinguishable. There, defendant’s had specified the legal basis for removal. Specifically, defendant had stated that the minimum amount in controversy, $75,000, had been met. They had merely neglected to provide the factual basis for the same. In this respect, that action was indistinguishable from Cohn v. Petsmart, 281 F.3d 837, 840 (9th Cir.2002). Here, however, defendant failed to specify the legal basis for removal. Defendants failed to allege that the residence of each member of the LLC was diverse. Thus, the face of the removal petition did not properly state the basis for removal, let alone provide factual support for the same. An appropriate parallel to Alexander could be drawn if defendant had specified that the residence of each member of the LLC was diverse, but neglected to specify their states of residence. That is clearly not the case here. The notice of removal treated defendant as a corporation, not an LLC. This prompted plaintiff to file a motion to remand. In opposition to that motion, defendant demonstrated that diversity of citizenship does in fact exist, even though it did not specify the citizenship of the members of the LLC in its notice of removal. The court is thus presented with a conundrum: either remand the case due to defendant’s oversight even though diversity jurisdiction exists, or create perverse incentives whereby WESlLAW' Navarro v. Servisair, LLC, Not Reported in F.Supp.2d (2008) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 6 plaintiffs are forced to bring motions to remand merely to ascertain the factual underpinnings of the bases alleged in a notice of removal. Since diversity of citizenship exists here and defendant is not attempting to manufacture the same, the court will consider defendant’s opposition as an amendment to its notice of removal. However, in order to dissuade sloppy drafting and eliminate perverse incentives, the court will award plaintiff attorneys fees and costs associated with bringing this motion to remand. Specifically, plaintiff is granted leave to file, within thirty (30) days of the date of this order, an application for a monetary award (and a proposed order) outlining the costs and fees he incurred with respect to preparing and arguing the diversity of citizenship portion of his motion to remand. Defendant may respond within twenty (20) days of the date of plaintiff’s filing as to reasonableness of costs and fees only. B. Amount in Controversy *8 Plaintiff also claims that defendant cannot demonstrate that plaintiff’s individual claims against defendant exceed $75,000. Defendant does not take issue with this argument. Consequently, to satisfy the amount in controversy requirement, defendant must demonstrate that the $5 million minimum amount in controversy standard under 28 U.S.C. section 1332(d)(2) is met. Where the amount in controversy is unclear from the plaintiff’s complaint, the Ninth Circuit has held that “ ‘the defendant bears the burden of actually proving the facts to support jurisdiction, including the jurisdictional amount.” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403 (9th Cir.1996) (quoting Gaus v. Miles, Inc., 980 F.2d 584, 586-67 (9th Cir.1992)). Specifically, the court held that “in cases where a plaintiff’s state court complaint does not specify a particular amount of damages, the removing defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds [the statutory minimum].” Id. at 404; see also Abrego Abrego v. Dow Chemical Co., 433 F.3d 676, 682-86 (9th Cir.2006). Plaintiff argues that defendant’s calculation of the amount in controversy is not based on evidence and consequently, is too speculative to meet the preponderance of the evidence standard. This is incorrect. Defendant relies on the statutes in question to determine the potential recovery of the class. Plaintiff alleges a class of “[a]ll current and former employees of DEFENDANTS who worked in the State of California at any time from time period commencing four years from the filing of this action through the entry of final judgment in this action.” Complaint at 6. He claims that he and others similarly situated regularly worked through their meal periods. Accordingly, he and members of the class were not compensated for all hours actually worked and are entitled to one hour of pay for each day the meal period was not provided. Although unclear from the complaint, plaintiff seems to demand overtime pay for that hour. Thus, a full-time employee who has worked for a year with no daily meal period would be entitled to approximately two hundred fifty hours of back-pay, assuming that he works five days a week for fifty weeks per year. At an overtime rate of approximately fifteen dollars an hour, this comes to $3,750 per full-time employee per year. Further, plaintiff claims an unlawful deduction of $1.25 per hour was taken from his pay for health benefits. See Complaint, ¶ 62; see also Allen Dec., ¶ 25. At eight hours a day for five days a week for fifty weeks per year, this comes to another $2,500 per employee per year for a total of $6,250 per full-time employee per year. In order to meet the $5 million bar, the class need only consist of 800 full-time employees for one year. This is easily met since defendant currently employs over 900 employees in California and the purported class reaches back four years. Allen Dec., ¶ 12. *9 Further, defendant has employed over 1,990 employees in California in the past that are no longer in its employ. Id., ¶ 13. The statutory waiting time penalties claimed by plaintiff amount to thirty days pay per class member that is no longer in defendant’s employ. See Cal. Labor Code § 203. With respect to the approximately 2,000 California employees no longer employed by Servisair, this amount could be $10/hour * 8 hours/day * 30 days * 2,000 former employees = $ 4.8 million. In light of these numbers, this court is convinced that the amount in controversy requirement is met. Although plaintiff claims defendant simply invents numbers in order to meet the amount in controversy requirement, he offers no alternative. For instance, he claims that defendant’s calculations take into account three meal period violations per week without arguing that the same is untrue. He does not limit his claim by stating that only a certain number of hours went uncompensated. Nevertheless, he seeks remand. Plaintiff cannot have his cake and eat it too. Finally, plaintiff is correct when arguing that attorneys fees should not be included in the amount in controversy since attorneys fees are awarded from the common fund award. However, since defendant has shown that the WESlLAW' Navarro v. Servisair, LLC, Not Reported in F.Supp.2d (2008) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 7 common fund at issue here meets the $5 million amount in controversy requirement without including attorneys fees, the court has diversity jurisdiction over this action. CONCLUSION For the foregoing reasons, plaintiff’s motion to remand is DENIED. Plaintiff may file an application for costs and fees within thirty (30) days of the date of this order and defendant may respond as to the reasonableness of the request within twenty (20) days thereafter. IT IS SO ORDERED. All Citations Not Reported in F.Supp.2d, 2008 WL 3842984 End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. WESlLAW EXHIBIT E Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Distinguished by Mike Rose’s Auto Body, Inc. v. Applied Underwriters Captive Risk Assurance Company, Inc., N.D.Cal., September 28, 2016 2016 WL 946112 United States District Court, N.D. California. Salvador VARGAS, Plaintiff, v. DELIVERY OUTSOURCING, LLC, et al., Defendants. Case No. 15-cv-03408-JST | Signed 03/14/2016 Attorneys and Law Firms Un Kei Wu, Arlo Garcia Uriarte, Liberation Law Group, P.C., San Francisco, CA, for Plaintiff. Maureen K. Bogue, Noah A. Levin, Pacific Employment Law LLP, San Francisco, CA, Elaine Susan Lerner, Bags Inc., Orlando, FL, for Defendants. ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION Re: ECF Nos. 19, 20 JON S. TIGAR, United States District Judge *1 Before the Court is Defendant Delivery Outsourcing, LLC’s Motion to Compel Arbitration and Stay Proceedings.1 ECF No. 19. For the reasons set forth below, the Court will grant the motion. I. BACKGROUND A. Parties and Claims Defendant Delivery Outsourcing, LLC (“DO”), a Florida-based limited liability company, contracts with businesses and individuals to deliver delayed luggage to airline passengers. ECF No. 19-1; ECF No. 1-1 ¶ 6. Defendant Luggage Services and Logistics, LLC (“LSL”) is a Florida limited liability company and Defendant Bags, Inc. (“Bags”) is a Florida corporation. ECF No. 1-1 ¶¶ 7-8. On or around July 16, 2012, Plaintiff Salvador Vargas (“Plaintiff”) entered into an Owner/Operator Agreement with DO to deliver delayed bags and luggage to air travelers in the Bay Area. See ECF No. 19-3, Merriam Decl., Ex. A (the Agreement). Plaintiff, a California resident, worked as a luggage delivery driver from July 2012 to May 2014. ECF No. 1-1 ¶ 13. He was paid for each delivery made and used his own vehicle to deliver luggage for Defendants. Id. ¶¶ 15-16. On May 16, 2014, Defendants terminated Plaintiff’s employment. Id. ¶ 36. On May 15, 2015, Plaintiff filed a complaint in San Mateo Superior Court alleging that Defendants misclassified him as an independent contractor, thereby depriving him of the rights guaranteed to employees under California law. ECF No. 1-1 ¶¶ 14-38. He also alleges that while employed with Defendants, he faced workplace discrimination due to his age and race or national origin. Plaintiff identifies as Latino and was approximately 70 years old at the time the alleged discrimination took place. Id. ¶¶ 30-35. Plaintiff contends he was wrongfully terminated on account of his age, race, and/or national origin. Id. ¶ 114. Plaintiff brings eleven claims for Defendants’ failure to pay minimum wage pay, pay all hours worked, pay overtime compensation, permit rest periods, permit meal periods, reimburse business expenses, and furnish accurate wage statements; waiting time penalties; unfair competition; discrimination; and wrongful termination. See generally ECF No. 1-1. Plaintiff seeks damages, restitution, waiting time penalties, costs, and attorneys’ fees. Id. at 15-16.2 On July 23, 2015, Defendant DO removed this action to this Court pursuant to 28 U.S.C. §§ 1441 and 1446. ECF No. 1. B. Arbitration Provision In support of its motion to compel arbitration, DO attaches Plaintiff’s Owner/Operator Agreement. See ECF No. 19-3, Decl. of Jessica Merriam (“Merriam Decl.”), Ex. A. The Agreement is seven-pages long and printed in small type. Plaintiff signed and dated the Agreement, but - - - - - WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 DO did not. The sixth page is a fill-in-the-blank form where Plaintiff provided information about his vehicle, automobile insurance, and driver’s license. See id. at 9. The last page is titled “Owner/Operator List of Understandings,” which lists fifteen statements with Plaintiff’s initials next to each statement. Id. at 10. A question is posed at the top of the list: “Before reading this document, can you read and speak English?” Id. Neither “yes” nor “no” is circled. Id. *2 Section 14, the provision on governing law, venue, and jurisdiction, appears on the fourth and fifth pages of the Owner/Operator Agreement. See id. at 7-8. The provision defines “disputes” as “[a]ny and all disputes which may arise or pertain in any way to this Agreement....” Id. at 7. It also requires that disputes be submitted on an individual basis to final and binding private arbitration administered by the American Arbitration Association (“AAA”) using AAA’s Rules for Commercial Arbitration. The section further includes a delegation clause stating that “[w]hether a dispute is arbitral shall be determined by the arbitrator.” Id. However, the section also discloses that “[i]f any provision of this Agreement or portion thereof is held to be unenforceable by a court of law or equity, said provision or portion thereof shall not prejudice the enforceability of any other provision or portion of the same provision....” Id. Section 14 also contains a choice of law provision requiring the application of Florida law. Id. Finally, the Agreement requires that arbitration take place in Orlando, Florida, and actions to enforce or vacate the arbitral award also take place in Orlando, Florida. Id. at 7-8. C. Motion to Compel Arbitration On December 22, 2015, DO filed its motion to compel arbitration of Plaintiff’s claims and stay further judicial proceedings pending completion of arbitration. ECF No. 19. Defendants LSL and Bags moved to join in DO’s motion to compel arbitration. ECF No. 20. On January 21, 2016, Plaintiff filed his opposition to the motion, arguing that the Federal Arbitration Act (“FAA”) does not apply to the agreement and that the arbitration agreement is unconscionable and unenforceable. ECF No. 24. After reviewing Defendant’s motion and Plaintiff’s opposition, the Court ordered both parties to provide the Court with supplemental briefing on whether Plaintiff is an interstate transportation worker under Section 1 of the FAA. ECF No. 25. On February 11, 2016, DO filed its reply in support of the motion contending that Section 1 does not apply to the agreement. ECF No. 26. On February 18, 2016, Plaintiff filed his sur-reply. ECF No. 27. The Court heard oral argument on March 10, 2016. ECF No. 28. D. Jurisdiction The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332. II. REQUEST FOR JUDICIAL NOTICE The Court may take judicial notice of a fact “that is not subject to reasonable dispute because it...can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(2). In support of its motion to compel arbitration, DO requests that the Court take judicial notice of: (1) the American Arbitration Association’s Commercial Arbitration Rules and Mediation Procedures; and (2) the American Arbitration Association’s Employment Arbitration Rules and Mediation Procedures. ECF No. 19-4. Plaintiff does not oppose the request. Because AAA’s arbitration rules can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned, the Court will take judicial notice. III. LEGAL STANDARD The Federal Arbitration Act (“FAA”) applies to arbitration agreements in any contract affecting interstate commerce. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001); 9 U.S.C. § 2. Under the FAA, arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds that --- - - ------ - -- -- - - WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. This provision reflects “both a liberal federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (internal citations omitted). On a motion to compel arbitration, the court’s role under the FAA is “limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). If the court is “satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C. § 4. Where the claims alleged in a complaint are subject to arbitration, the Court may stay the action pending arbitration. Id. § 3. IV. DISCUSSION A. FAA Exemption for Transportation Workers Engaged in Interstate Commerce *3 The FAA extends to all contracts “evidencing a transaction involving commerce,” or arising from a “maritime transaction.” 9 U.S.C. § 2. However, under Section 1 of the FAA, an exemption to the FAA exists for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1; see also Circuit City, 532 U.S. at 112. A district court must first “assess whether a Section 1 exemption applies before ordering arbitration.” In re Van Dusen, 654 F.3d 838, 845 (9th Cir. 2011). A plaintiff opposing arbitration under the FAA has “the burden of demonstrating the exemption.” Cilluffo v. Central Refrigerated Services, Inc., No. EDCV 12-00886 (VAP), 2012 WL 8523507, at *3 (C.D. Cal. Sept. 24, 2012), order clarified, No. EDCV 12-00886 VAP, 2012 WL 8523474 (C.D. Cal. Nov. 8, 2012) (citing Rogers v. Royal Caribbean Cruise Line, 547 F.3d 1148, 1151 (9th Cir. 2008)). Plaintiff contends that he falls within the Section 1 FAA exemption because he occasionally delivered luggage to Nevada as an employee to DO. ECF No. 24 at 7-8. To claim the Section1 exemption Plaintiff must demonstrate that he is (1) an employee (2) engaged in interstate commerce. The Court turns first to the question of whether Plaintiff was “engaged in interstate commerce.” Transportation workers are “workers actually engaged in the movement of goods in interstate commerce.” Circuit City, 532 U.S. at 112. In Circuit City, the Supreme Court applied Section 1 narrowly and distinguished the limited reach of the phrase “engaged in commerce,” which covers “only persons or activities within the flow of interstate commerce,” from the terms “affecting commerce” or “involving commerce.” Id. at 118. The Court noted that the latter terms refer to “Congress’ intent to regulate to the outer limits of its authority under the Commerce Clause.” Id. at 115. Section 1’s exemption was intended to reach workers who would, by virtue of a strike, “interrupt the free flow of goods to third parties in the same way that a seamen’s strike or railroad employee’s strike would.” Veliz v. Cintas Corp., No. C 03-1180 (SBA), 2004 WL 2452851 at *3 (N.D. Cal. Apr. 5, 2004). “The most obvious case where a plaintiff falls under the FAA exemption is where the plaintiff directly transports goods in interstate, such as interstate truck driver whose primary function is to deliver mailing packages from one state into another.” Id. at *5; see also Kowalewski v. Samandarov, 590 F. Supp. 2d 477, 482-83 (S.D.N.Y. 2008) (“If there is one area of clear common ground among the federal courts to address this question, it is that truck drivers-that is, drivers actually involved in the interstate transportation of physical goods- have been found to be “transportation workers” for purposes of the residuary exemption in Section 1 of the FAA.”). Plaintiff contends that he engaged in interstate commerce because he delivered delayed luggage to airline passengers in California and Nevada. ECF No. 24 at 7; ECF No. 24-1, Vargas Decl. ¶ 2. DO counters that Plaintiff did not transport commercial goods and that Plaintiff did not deliver luggage outside of California. ECF No. 26 at 15. In support of this contention, DO produced delivery records that show Plaintiff only delivered luggage in California. ECF No. 26-2, Mecca Supp. Decl., Ex. A. Plaintiff responds that “the Court should not be persuaded” by this evidence because DO “failed to demonstrate that [the] records are complete and accurate.” ECF No. 27 at 9. *4 Delivery drivers may fall within the exemption for “transportation workers” even if they make interstate deliveries only “occasionally.” See International Broth. Of Teamsters Local Union No. 50 v. Kienstra Precast, - - - - - WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 LLC, 702 F.3d 954, 957 (7th Cir. 2012). In International Brotherhood, the Seventh Circuit concluded that even where interstate deliveries were a small proportion of trucker drivers’ total workload, the drivers engaged in interstate commerce. Id. at 958. There, the truckers estimated making a few dozen interstate deliveries out of 1500 to 1750 deliveries each year. Id. The evidence in this case, however, does not support the conclusion that Plaintiffs made interstate deliveries even occasionally. DO submitted Plaintiff’s Baggage Delivery Order (“BDO”) data from the time he worked with Defendants. See ECF No. 26-2, Mecca Supp. Decl., Ex. A. The BDO records show that Plaintiff delivered luggage only in California. Plaintiff and his former supervisor, Omar Vargas,3 have submitted declarations in opposition to Defendants’ motion, but Plaintiff states only that “his duties included driving from Defendants’ warehouse in Burlingame, California to different locations in California and Nevada to deliver delayed luggage to airline passengers,” ECF No. 24-1 at 2 (emphasis added), not that he ever actually made any deliveries to Nevada. His supervisor, Omar Vargas, states generally that “Salvador Vargas was assigned and performed deliveries in California and Nevada,” ECF No. 27-2 at 2, but does so in a declaration that was filed improperly with Plaintiff’s sur-reply, such that it is not properly before the Court. “A district court may refuse to consider new evidence submitted for the first time in a reply if the evidence should have been presented with the opening brief.” Wallace v. Countrywide Home Loans, Inc., No. SACV 08-1463 AG MLGX, 2009 WL 4349534, at *7 (C.D. Cal. Nov. 23, 2009). Moreover, even considered on its merits, Omar Vargas’ declaration is not persuasive. He fails to provide any information regarding the frequency with which Salvador Vargas travelled to Nevada, or any details of even a single delivery he made there. See ECF No. 27-2 ¶ 8. These two declarations do not rebut the very specific and credible evidence that Plaintiff never travelled to Nevada. Plaintiff next responds that even if the deliveries occurred solely intrastate, it “does not make that portion of the trip any less interstate in character.” ECF No. 27 at 9 (citing to United States v. Yellow Cab Co., 332 U.S. 218, 228 (1947)). Plaintiff argues that there is continuity of movement between the interstate travel of the luggage and other items, including wheelchairs and ski equipment, to the intrastate deliveries made by Plaintiff. Id. The cases cited by Plaintiff in support of this proposition refer to provisions of the Sherman Antitrust Act and the Fair Labor Standards Act (“FLSA”), not Section 1 of the FAA. The Sherman Act and the FLSA are both construed broadly. Yellow Cab, 332 U.S. at 226 (“The Sherman Act is concerned with more than the large, nation-wide obstacles in the channels of interstate trade. It is designed to sweep away all appreciable obstructions so that the statutory policy of free trade might be effectively achieved.”); Chao, 214 F. Supp. 2d at 1269 (“Because the FLSA is remedial, it is to be broadly construed.”). Section 1 of the FAA, by contrast, has consistently been construed narrowly. In Circuit City, for example, the Court considered whether a Circuit City employee who was a sales counselor in a store in Santa Rosa, California fell with the § 1 exemption. 532 U.S. at 110. The Court concluded he did not, noting that “[m]ost Courts of Appeals conclude the exclusion provision is limited to transportation workers, defined, for instance, as those workers ‘actually engaged in the movement of goods in interstate commerce.” Id. at 112 (contrasting Section 2 of the FAA, which involves any contract evidencing a transaction involving commerce, with Section 1 of the FAA, which is limited to transportation workers actually engaged in interstate commerce). *5 Under the appropriate, narrower construction, Plaintiff has not shown that the intrastate delivery of luggage is an activity “within the flow of interstate commerce.” Id. at 117. Other courts have held that local delivery drivers do not fall within the interstate transportation worker exemption. See, e.g., Hill v. Rent-A-Center, Inc., 398 F.3d 1286, 1289-90 (11th Cir. 2005) (distinguishing between a transportation worker engaged in interstate commerce and the “activities of...a pizza delivery person who delivered pizza across a state line to a customer in a neighboring town”); Levin v. Caviar, Inc., No. 15-CV-01285-EDL, 2015 WL 7529649 (N.D. Cal. Nov. 16, 2015); Veliz, 2004 WL 2452851 at *3. This Court holds likewise. “Courts also look to ‘whether a strike by the category of workers at issue would interrupt interstate commerce’ in determining whether a worker falls within the FAA exemption.” Levin, 2015 WL 7529649, at *4 (quoting Lenz v. Yellow Transp., Inc., 431 F.3d 348, 352 (8th Cir. 2005)). In this case, a strike by luggage delivery drivers such as Plaintiff would not have the same impact as the interruption of the “free flow of goods to third parties” that a “seamen’s strike or railroad employee’s strike would.” Veliz, 2004 WL 2452851 at *10. Plaintiff’s argument that he is “engaged in interstate commerce” asks the Court to broadly read a term that requires a narrow construction. The Court declines the invitation, and concludes that Plaintiff was not engaged in interstate commerce.4 WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 Because Plaintiff is not subject to the Section 1 exemption, the Court applies the FAA. B. Validity of the Agreement to Arbitrate Although the FAA expresses “a liberal federal policy favoring arbitration agreements,” that policy is best understood as concerning “the scope of arbitrable issues.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). This liberal policy does not apply to the determination of whether a particular party is bound by the arbitration agreement. Comer v. Micor, Inc., 436 F.3d 1098, 1104 n.11 (9th Cir. 2006). When deciding whether a valid arbitration agreement exists, federal courts “apply ordinary state-law principles that govern the formation of contracts.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). “[T]he party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.” Green Tree Fin. Corp. Alabama v. Randolph, 531 U.S. 79, 91 (2000). Plaintiff argues that the arbitration agreement is not binding on either Plaintiff or DO because the Owner/Operator Agreement was not signed by all parties. ECF No. 24 at 10. DO did not sign the Owner/Operator Agreement and Plaintiff did not receive a copy of it. Id. The law does not support this argument. “While the FAA authorizes the court to enforce only written agreements to arbitration (9 U.S.C. § 3), it does not require the written agreements to be signed.” Ambler v. BT Americas Inc., 964 F. Supp. 2d 1169, 1174 (N.D. Cal. 2013); Nghiem v. NEC Elec., Inc., 25 F.3d 1437, 1439 (9th Cir. 1994) (“While the FAA requires a writing, it does not require that the writing be signed by the parties.”). In this case, Plaintiff has not established that DO’s signature was “contemplated as a condition precedent to the validity of the contract.” Fagelbaum & Heller LLP v. Smylie, 174 Cal. App. 4th 1351, 1365 (2009) (internal quotations omitted). Further, Plaintiff does not dispute that DO presented him with a copy of the Owner/Operator Agreement at the start of his employment, and that he signed it. Plaintiff then proceeded to work for DO for nearly two years. The agreement to arbitrate is a mutually binding agreement. See Serafin v. Balco Properties Ltd., LLC, 235 Cal. App. 4th 165, 177 (2015), review denied (June 10, 2015) (“Just as with any written agreement signed by one party, an arbitration agreement can be specifically enforced against the signing party regardless of whether the party seeking enforcement has also signed, provided that the party seeking enforcement has performed or offered to do so.”); Chico v. Hilton Worldwide, Inc., No. CV 14-5750-JFW SSX, 2014 WL 5088240, at *7 (C.D. Cal. Oct. 7, 2014) (finding that an employer who did not sign the arbitration agreement nonetheless manifested assent to the agreement by presenting it to the plaintiff for execution, accepting the agreement, and then employing the plaintiff). C. Arbitrability *6 “[P]arties can agree to arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.” Rent-A-Ctr., West, Inc. v. Jackson, 561 U.S. at 63, 68-69 (2010). “Just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, so the question ‘who has the primary power to decide arbitrability’ turns upon what the parties agreed about that matter.” Kaplan, 514 U.S. at 943 (emphasis in original) (internal citations omitted). Whether the court or the arbitrator decides arbitrability is “an issue for judicial determination unless the parties clearly and unmistakably provide otherwise.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (quoting AT&T Techs., Inc. v. Commc’ns Workers of America, 475 U.S. 643, 649 (1986)). While the Court generally resolves ambiguities in arbitration agreements in favor of arbitration, it resolves ambiguities as to the delegation of arbitrability in favor of court adjudication. See Kaplan, 514 U.S. at 944-45. For arbitration agreements under the FAA, “the court is to make the arbitrability determination by applying the federal substantive law of arbitrability absent clear and unmistakable evidence that the parties agreed to apply non-federal arbitrability law.” Brennan v. Opus Bank, 796 F.3d 1125, 1129 (9th Cir. 2015). 1. Express Language of the Delegation Clause DO argues that the arbitrator, not the Court, must determine the validity of the parties’ agreement to arbitrate. ECF No. 19-1 at 5. DO’s first contention in support of this argument is that the express language of the arbitration provision clearly and unmistakably delegates the question of arbitrability. Id. at 5. The - - - --------- - -- - - - WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 6 Owner/Operator Agreement provides that “any and all disputes which may arise or pertain in any way” to the Agreement must be submitted to arbitration. ECF No. 19-3, Merriam Decl., Ex. A, at 7. “Whether a dispute is arbitral shall be determined by the arbitrator.” Id. The delegation clause itself does clearly state that the threshold question of arbitrability is to be delegated to the arbitrator. Taken as a whole, however, the Agreement is ambiguous. The very same paragraph also provides, “If any provision of this Agreement or portion thereof is held to be unenforceable by a court of law or equity, said provision or portion thereof shall not prejudice the enforceability of any other provision or portion of the same provision....” Id. (emphasis added). This language is necessary only if questions concerning arbitrability are not resolved by the arbitrator. Other courts analyzing similar conflicts as the one here - an unambiguous delegation clause contradicted by another provision of the contract - have declined to enforce the delegation clause. See, e.g., Mohamed v. Uber Techs., Inc., 109 F. Supp. 3d 1185, 1199-2000 (N.D. Cal. 2015); O’Connor v. Uber Techs., Inc., No. 13-CV-03826-EMC, 2015 WL 8587879, at *4-5 (N.D. Cal. Dec. 10, 2015). As the court in Ajamian v. CantorCO2e, L.P. explained, “[e]ven broad arbitration clauses that expressly delegate the enforceability decision to arbitrators may not meet the clear and unmistakable test, where other language in the agreement creates an uncertainty in that regard.” 203 Cal. App. 4th 771, 792 (2012). This is so because “[a]s a general matter, where one contractual provision indicates that the enforceability of an arbitration provision is to be decided by the arbitrator, but another provision indicates that the court might also find provisions in the contract unenforceable, there is not clear and unmistakable delegation of authority to the arbitrator.” Id. (emphasis in original) (citing Parada v. Superior Court, 176 Cal. App. 4th 1554, 1565-66 (2009)). For example, in Mohamed v. Uber, the plaintiff drivers’ contracts contained delegation clauses that, read in isolation, were unambiguous: they stated that disputes related to the arbitration provision would be decided by the arbitrator without limitation. 109 F. Supp. 3d at 1199. The same provision also stated, however, that a court, rather than arbitrator, would determine the validity of the arbitration provision’s class, collective, and representative action waivers. Id. at 1201-02. The contracts further granted California state and federal courts “exclusive jurisdiction” of “any disputes.” Id. at 1201. Based on these conflicts, the court concluded that the language of the delegation clause was not “clear and unmistakable” and declined to enforce it. Id. at 1203. *7 Here, despite clear language delegating arbitrability to the arbitrator, the issue of delegation is made ambiguous by the language of the arbitration provision that permits modification of the Owner/Operator Agreement should “a court of law or equity” hold any provision of the Agreement unenforceable. The Agreement cannot be read as a providing a “clear and unmistakable” delegation to arbitrator. Judged on the language of the Owner/Operator Agreement, the question of arbitrability is for the Court. See Howsam, 537 U.S. at 83 (“Whether the parties have submitted a particular dispute to arbitration, i.e., the ‘question of arbitrability,’ is an issue for judicial determination unless the parties clearly and unmistakably provide otherwise.”) (internal citation and modifications omitted). 2. Incorporation of AAA’s Commercial Rules DO also argues that the parties’ intent to delegate arbitrability is confirmed by incorporation of the AAA’s Commercial Arbitration Rules in the Agreement. See ECF No. 19-1 at 6; ECF No. 19-3, Merriam Decl., Ex. A at 7. Within the AAA Commercial Rules, Rule 7(a) delegates all jurisdictional questions, including arbitrability, to the arbitrator. The Rule states: “The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.” AAA Commercial Rule 7(a) (effective as of October 1, 2013). Under some circumstances, incorporating the AAA rules into an agreement can evince a “clear and unmistakable” intent to delegate. In Brennan v. Opus Bank, the Ninth Circuit affirmed a district court’s finding that an employment agreement’s express incorporation of the AAA rules, as part of the arbitration provision, was clear and unmistakable evidence of the parties’ intent to submit the arbitrability dispute to arbitration. 796 F.3d at 1131. In so holding, the court recalled its earlier observation in Oracle America, Inc. v. Myriad Group A.G., 724 F.3d 1069, 1074 (9th Cir.2013) that “[v]irtually every circuit to have considered the issue has determined that incorporation of the [AAA] arbitration rules constitutes clear and unmistakable evidence that the parties agreed to arbitrate arbitrability.” Id. at 1130. But the Brennan court limited the holding to the facts of the case: an arbitration agreement between two sophisticated parties, one an - - ------ - - --- - WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 7 experienced attorney and businessman and the other a regional financial institution. Id. at 1131. Both Brennan and Oracle specifically left open the question of whether the same rule would apply when fewer than all the parties to an arbitration agreement were sophisticated. Id.; Oracle, 724 F.3d at 1075 n.2. The Court concludes that incorporation of AAA’s rules does not evince a “clear and unmistakable” intent to delegate disputes involving unsophisticated employees. See Aviles, 2015 WL 9810998, at *6; Loewen v. Lyft, Inc., No. 15-CV-01159-EDL, 2015 WL 5440729, at *6 (N.D. Cal. Sept. 15, 2015). As this Court previously explained in another case, “an inquiry about whether the parties clearly and unmistakably delegated arbitrability by incorporation should first consider the position of those parties....After all, the question is whether the language of an agreement provides “clear and unmistakable” evidence of delegation.” Meadows v. Dickey’s Barbecue Restaurants Inc., No. 15-CV-02139-JST, 2015 WL 7015396, at *6 (N.D. Cal. Nov. 12, 2015). To a large corporation (as in Oracle) or a sophisticated attorney (as in Brennan), it might be reasonable to conclude that incorporation of the rules clearly and unmistakably evinces an intent to delegate. “But applied to an inexperienced individual, untrained in the law, such a conclusion is likely to be much less reasonable.” Id. *8 In this circumstance, the Court cannot conclude that the parties clearly and unmistakably intended to delegate the question of arbitrability to an arbitrator through reference to AAA’s Commercial Rules. Plaintiff - an unsophisticated luggage delivery driver - executed the Owner/Operator Agreement without an opportunity to review the documents or consult with an attorney, and the parties dispute Plaintiff’s English language proficiency. ECF No. 24-1, Vargas Decl. ¶¶ 3-12. See Aviles, 2015 WL 9810998, at *6 (finding that “it would strain credulity to conclude” that the plaintiff driver evinced a clear and unmistakable intent to delegate arbitrability through incorporation of the JAMS rules into the agreement). For the foregoing reasons, the Court determines that DO’s arbitration provision fails to provide clear and unmistakable evidence that the parties agreed to delegate arbitrability. Because the purported delegation provision is ineffective, the Court need not reach the parties’ remaining arguments regarding the delegation provision. The Court now turns to Plaintiff’s arguments about the unconscionability of the arbitration provision. D. Unconscionability of the Arbitration Provision The California Supreme Court5 recently reiterated the test for unconscionability law in Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899 (2015), as follows: [Unconscionability] refers to an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party. As that formulation implicitly recognizes, the doctrine of unconscionability has both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results. The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability. But they need not be present in the same degree. Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves. In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa. Courts may find a contract as a whole or any clause of the contract to be unconscionable. Id. at 910 (internal citations and quotation marks omitted). “Because unconscionability is a contract defense, the party asserting the defense bears the burden of proof.” Id. at 911; see also Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 236 (2012) (“[T]he party opposing arbitration bears the burden of proving any defense, such as unconscionability.”). - - - ------- WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 8 Plaintiff argues that the delegation provision itself is unenforceable because it is both procedurally and substantively unconscionable and that the Court, not an arbitrator, should decide the question of arbitrability. ECF No. 24 at 21. 1. Procedural Unconscionability *9 “Procedural unconscionability analysis focuses on oppression or surprise.” Nagrampa MailCoups, Inc., 469 F.3d 1257, 1280 (9th Cir. 2006) (internal quotation marks omitted). “Oppression arises from an inequality of bargaining power that results in no real negotiation and an absence of meaningful choice, while surprise involves the extent to which the supposedly agreed-upon terms are hidden in a prolix printed form drafted by the party seeking to enforce them.” Id. (internal quotation marks omitted). Plaintiff first argues that the arbitration provision is procedurally unconscionable because it was contained in a contract of adhesion. ECF No. 24 at 11-14. Plaintiff contends that the Owner/Operator Agreement is adhesive because it is a pre-printed, standardized contract, which was presented to Plaintiff on a take-it-or-leave-it manner with no opportunity to negotiate or reject it. Id. DO disputes that the Owner/Operator Agreement was a contract of adhesion. ECF No. 26 at 18. DO also argues that if the Court were to find that it was a contract adhesion, the Court should only find minimal procedural unconscionability because bargaining power was not grossly unequal and reasonable alternatives existed between the two parties. Id. (citing Ruhe v. Masimo Corp., No. SACV 11-0734-CJC, 2011 WL 4442790, at *3 (C.D. Cal. Sept. 16, 2011)). Here, Plaintiff has shown that the arbitration provision is part of contract of adhesion. “Under California law, [a] contract of adhesion is defined as a standardized contract, imposed upon the subscribing party without an opportunity to negotiate the terms.” Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976, 983 (9th Cir. 2007) (quotations omitted). Under California law, contracts of adhesion are procedurally unconscionable “to at least some degree.” Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., 622 F.3d 996, 1004 (9th Cir. 2010). The arbitration provision was part of a pre-printed contract drafted exclusively by DO and provided to Plaintiff as a prerequisite to his ability to work as a delivery driver. DO gave Plaintiff only a few minutes “to quickly sign the documents without any time for questions or time to review the stack of documents.” ECF No. 24-1, Vargas Decl. ¶ 12. Plaintiff further states that he was not given the opportunity or power to negotiate any of the terms of the Agreement. Id. ¶ 19. Plaintiff also asserts that he was required to sign the documents before working for Defendants. Id. ¶ 11. Although Plaintiff does not offer evidence that he actually sought to negotiate the terms of the arbitration provision or the Agreement generally, Plaintiff does explain circumstances indicating that he would not have had a meaningful opportunity to negotiate these terms even if he had so requested. The Court finds that the Agreement was adhesive. See Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 115 (2000) (“[I]n the case of preemployment arbitration contracts, the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement.”) Plaintiff next argues that the arbitration provision is procedurally unconscionable because the Agreement was not translated or explained to Plaintiff in Spanish although Plaintiff’s native language is Spanish and he has limited English proficiency. ECF No. 24 at 13; ECF No. 24-1, Vargas Decl. ¶ 3. DO counters that this argument is a disingenuous because Plaintiff speaks English fluently and has resided in the United States for several decades. ECF No. 26 at 18. Plaintiff’s level of proficiency with the English language, whatever it might be, does not alter the Court’s unconscionability analysis. Plaintiff does not allege that he informed DO that he did not understand the agreement or that DO said it would provide a Spanish translation. While he claims that he did not have enough time to read the agreement, he does not claim that he was unable to understand it. He also does not argue that DO exploited the asserted language barrier for its own benefit. See, e.g., Molina v. Scandinavian Designs, Inc., No. 13-CV-04256 NC, 2014 WL 1615177, at *7 n.1 (N.D. Cal. Apr. 21, 2014) (finding that the plaintiff’s limited English literacy did not add to the procedural unconscionability of the arbitration provision); IJL Dominicana S.A. v. It’s Just Lunch Int’l, LLC, No. 08-cv-5417, 2009 WL 305187, at *3 n.1 (C.D. Cal. Feb. 6, 2009) (finding only minimal procedural unconscionability where the defendant did not provide the plaintiff a copy of contract in Spanish, since there was no evidence that the defendant promised to provide a Spanish translation or that the defendant tried to take advantage of - -- -- - - - WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 9 language differences). *10 Plaintiff also contends that the failure to provide a copy of the incorporated AAA Commercial Rules adds to the finding of procedural unconscionability. ECF No. 24 at 14. In Pokorny v. Quixtar, Inc., the Ninth Circuit held that the failure to attach the arbitration rules denied the plaintiffs “a fair opportunity to review the full nature and extent of the non-binding conciliation and binding arbitration processes to which they would be bound before they signed the [agreements].” 601 F.3d at 996-97. This failure “multipl[ies] the degree of procedural unconscionability” discussed above. Id. DO’s failure to attach the applicable rules of the AAA, while not dispositive, also adds to the Agreement’s procedural unconscionability. The arbitration provision is part of a contract of adhesion offered to a person with little bargaining power on a take-it-or-leave-it basis, and it incorporates the AAA rules without attaching them. The Court finds that there is some degree of procedural unconscionability. See id. The Court next examines “the extent of substantive unconscionability to determine, whether based on the California courts’ sliding scale approach, the arbitration provision is unconscionable.” Nagrampa, 469 F.3d at 1284. 2. Substantive Unconscionability “Substantive unconscionability pertains to the fairness of an agreement’s actual terms and to assessments of whether they are overly harsh or one-sided.” Pinnacle Museum Tower, 55 Cal. 4th at 246. However, “[a] contract term is not substantively unconscionable when it merely gives one side a greater benefit; rather, the term must be so one-sided as to shock the conscience.” Id. (internal quotation marks omitted). When assessing substantive unconscionability, “[m]utuality is the ‘paramount’ consideration....” Pokorny, 601 F.3d at 997 (quoting Abramson v. Juniper Networks, Inc., 115 Cal. App. 4th 638, 664 (2004)). Plaintiff argues that the arbitration provision is substantively unconscionable because the provision requires the parties to apply Florida law and arbitrate in Orlando, Florida. ECF No. 24 at 17-18. In response, DO first emphasizes that prior to filing the instant motion to compel arbitration, DO offered to arbitrate Plaintiff’s claims in San Francisco. ECF No. 26 at 20-21. DO also asserts that Plaintiff has not met his burden in demonstrating that the enforcement of the choice of law and forum selection clauses is unreasonable. Id. at 26. a. Choice of Law A choice of law clause may render an arbitration provision unconscionable if its operation would deprive the plaintiff of statutorily protected rights, such as employment benefits. Ajamian, 203 Cal. App. 4th at 798-99; see also Narayan v. EGL, Inc., 616 F.3d 895, 899 (2010). “However, absent a reason to conclude that the choice of law provision would have such an effect, the resolution of choice of law issues is for the arbitrator, not the Court, to decide.” Galen v. Redfin Corp., No. 14-CV-05229-TEH, 2015 WL 7734137, at *10 (N.D. Cal. Dec. 1, 2015) (citing Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 541 (1995)). Plaintiff contends that by applying Florida law, Plaintiff will waive his statutory rights under California’s Labor Code and FEHA. ECF No. 24 at 17. DO counters that the choice of law provision is not unconscionable because Plaintiff “would be free to argue before the arbitrator that, in light of his statutory claims, California, not Florida, law should apply.” ECF No. 26 at 24. Plaintiff has the better argument. As Defendants do not dispute that the application of Florida law will result in the loss of unwaivable rights under the California Labor Code, Plaintiff has satisfied his burden of demonstrating that the choice of law clause in the arbitration provision is unconscionable. Flinn v. CEVA Logistics U.S., Inc., No. 13-CV-2375 W BLM, 2014 WL 4215359, at *10 (S.D. Cal. Aug. 25, 2014) (declining to enforce an arbitration provision containing a Texas choice of law clause, the effect of which would be to “eliminate all of [plaintiff’s] California Labor Code protections”).6 b. Forum Selection Clause *11 “[F]orum selection clauses are valid and should be given effect unless enforcement of the clause would be unreasonable.” Intershop Commc’ns, AG v. Superior Court, 104 Cal. App. 4th 191, 196 (2002). However, if the “place and manner” restrictions of a forum selection - ------ - - - - - - WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 10 provision are “unduly oppressive,” see Bolter v. Superior Court, 87 Cal. App. 4th 900, 909-10, or have the effect of shielding the stronger party from liability, see Comb v. PayPal, Inc., 218 F. Supp. 2d 1165, 1177 (N.D. Cal. 2002), then the forum selection provision is unconscionable. As Plaintiff points out, under the Agreement, an arbitrator in Orlando, Florida must decide challenges to the enforceability or validity of the arbitration agreement. See ECF No. 19-3 at 7. Further, actions to enforce or vacate the arbitral award must also take place “in a court of appropriate subject matter jurisdiction in Orlando, Florida.” Id. Plaintiff asserts that this forum selection clause is unconscionable as it would require him to arbitrate with DO across the country from where the contract was executed or work performed. ECF No. 24 at 21. The Court agrees with Plaintiff that the forum selection clause renders the arbitration provision substantively unconscionable. Forcing Plaintiff, a luggage delivery driver, to challenge the arbitration agreement thousands of miles from where he worked places a substantial barrier to Plaintiff bringing his claims. See Nagrampa, 469 F.3d at 1285 (finding that the arbitral forum is designated as Boston, Massachusetts lacked mutuality because it “is a location considerably more advantageous to the [franchisor]”); Capili v. Finish Line, Inc., 116 F. Supp. 3d 1000, 1006-07 (N.D. Cal. 2015) (finding the provision of the employment agreement requiring that disputes be submitted to arbitration in Indiana substantively unconscionable); Bolter, 87 Cal. App. 4th at 909 (finding that enforcement of the forum selection clause requiring claims to be arbitrated exclusively in Utah would be cost prohibitive in light of fact that the potential claimants located around the country would be required to retain counsel familiar with Utah law). The Court finds that the arbitration provision is substantively unconscionable to the extent it includes this forum selection clause. 3. Severability A court has discretion to either sever an unconscionable provision from an agreement or refuse to enforce the agreement in its entirety. Pokorny, 601 F.3d at 1005 (citation omitted). California law allows the court to sever any unconscionable provisions so long as they are merely collateral to the main purpose of the arbitration agreement. Armendariz, 24 Cal. 4th at 124. “In exercising this discretion, courts look to whether the ‘central purpose of the contract is tainted with illegality’ or ‘the illegality is collateral to [its] main purpose.”’ Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1180 (9th Cir. 2003). The Court concludes that the choice of law clause and the forum selection clause are “merely collateral” to the main purpose of the agreement and that the clauses can easily be severed from the Agreement. See Galen, 2015 WL 7734137, at *10 (N.D. Cal. Dec. 1, 2015) (concluding that the forum selection and choice of law provisions were easily severable from the arbitration agreement); Haisha Corp. v. Sprint Sols., Inc., No. 14CV2773-GPC MDD, 2015 WL 224407, at *9-10 (S.D. Cal. Jan. 15, 2015) (severing the forum selection clause from the arbitration agreement). Further, DO is amenable to arbitrating in San Francisco, California. See ECF No. 26 at 20, 26; ECF No. 19-2, Bogue Decl., Ex. A. The Court, accordingly, severs the choice of law and forum selection clauses from the arbitration provision. *12 Based on the findings that the arbitration provision contains some procedural unconscionability but no substantive unconscionability, other than two clauses the Court severs from the Agreement, the Court concludes that the arbitration provision is not unconscionable and is enforceable. CONCLUSION For the reasons set forth above, the Court severs the choice of law and forum selection clauses, grants the motion to compel arbitration, and stays these proceedings.7 The parties are instructed to submit a joint status report to the Court within ninety days of the date this order is electronically filed, and additional joint status reports every ninety days thereafter, apprising the Court of the status of the arbitration proceedings. Upon completion of the arbitration proceedings, the parties shall jointly submit to the Court, within fourteen days, a report advising the Court of the outcome of the arbitration, and request that the case be dismissed or that the case be reopened and a case management conference be scheduled. IT IS SO ORDERED. - --- - - -- - - - -WEST Pi- Vargas v. Delivery Outsourcing, LLC, Not Reported in F.Supp.3d (2016) 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 11 All Citations Not Reported in F.Supp.3d, 2016 WL 946112, 2016 Fair Empl.Prac.Cas. (BNA) 77,637, 2016 Wage & Hour Cas.2d (BNA) 77,637 Footnotes 1 Defendants Luggage Services and Logistics, LLC and Bags, Inc. jointly move to join in the motion to compel arbitration. ECF No. 20. That motion is granted. 2 Citations are to the pages assigned by the Court’s electronic case filing system and not to the internal pagination of the document. 3 Omar Vargas is also Plaintiff’s son. ECF No. 27 at 4 n.1. 4 Because the Court concludes that Plaintiff was not engaged in interstate commerce, it does not reach the question of whether Plaintiff was an employee. 5 Although the Agreement contains a provision that Florida law will apply, both parties rely on California law in their unconscionability analysis. See ECF No. 19‐1 at 6-7; ECF No. 24. The Court therefore does likewise. See Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1267 (9th Cir. 2006) (applying California law “because the parties through their course of conduct have waived the provision of the agreement that specifies the application of Massachusetts law”). 6 But see Antonelli v. Finish Line, Inc., No. 5:11‐CV‐03874 EJD, 2012 WL 525538, at *7 (N.D. Cal. Feb. 16, 2012) (enforcing arbitration clause and concluding that choice of law provision “does not necessarily result in the application of Indiana substantive law, but only compels the application of Indiana’s choice‐of‐law rules”) (emphasis omitted). 7 Arbitration proceedings will be initiated in the Northern District of California. As directed by 9 U.S.C. section 4, arbitration “shall be within the district in which the petition for an order directing such arbitration is filed.” See also Textile Unlimited, Inc. v. A..BMH & Co., 240 F.3d 781, 785 (9th Cir. 2001) (“[Section] 4 only confines the arbitration to the district in which the petition to compel is filed.”); Homestake Lead Co. of Missouri v. Doe Run Res. Corp., 282 F. Supp. 2d 1131, 1144 (N.D. Cal. 2003) (ordering arbitration to take place in San Francisco, California). Additionally, as discussed above, DO previously stipulated to arbitrating in San Francisco. ECF No. 26 at 26. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. --- EXHIBIT F Angeles v. US Airways, Inc., 790 Fed.Appx. 878 (2020) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 790 Fed.Appx. 878 (Mem) This case was not selected for publication in West’s Federal Reporter. See Fed. Rule of Appellate Procedure 32.1 generally governing citation of judicial decisions issued on or after Jan. 1, 2007. See also U.S.Ct. of App. 9th Cir. Rule 36-3. United States Court of Appeals, Ninth Circuit. Joseph Timbang ANGELES; Noe Lastimosa, on behalf of themselves and on behalf of others similarly situated, and the general public, Plaintiffs-Appellants, v. US AIRWAYS, INC., Defendant-Appellee. No. 18-16096 | Argued and Submitted December 5, 2019 San Francisco, California | FILED January 24, 2020 Attorneys and Law Firms Arlo Garcia Uriarte, Trial Attorney, Liberation Law Group, San Francisco, CA, for Plaintiffs-Appellants Adam P. KohSweeney, Esquire, Attorney, O’Melveny & Myers LLP, San Francisco, CA, Robert Alan Siegel, Esquire, O’Melveny & Myers LLP, Los Angeles, CA, for Defendant-Appellee Appeal from the United States District Court for the Northern District of California, Charles R. Breyer, District Judge, Presiding, D.C. No. 3:12-cv-05860-CRB Before: SILER,* CLIFTON, and BYBEE, Circuit Judges. *879 MEMORANDUM** Joseph Angeles and Noe Lastimosa, on behalf of themselves and on behalf of others similarly situated, and the general public (collectively “Appellants”), appeal the district court’s summary judgment in favor of US Airways.1 We affirm. We have jurisdiction under 28 U.S.C. § 1291 and review an order granting summary judgment de novo. See Beaver v. Tarsadia Hotels, 816 F.3d 1170, 1177 (9th Cir. 2016). Appellants argue that US Airways failed to pay overtime for hours worked during shift trades in violation of California Labor Code Section 510 (“Section 510”). Section 510 requires employers to compensate work at a rate of at least one and one-half times regular pay for any hours worked that exceed eight hours per day or forty hours per week. The district court concluded that the Railway Labor Act (“RLA”) exemption excuses US Airways from complying with Section 510 ’s overtime requirements. We agree. The RLA exemption is established in Wage Order 9. Cal. Code Regs. tit. 8, § 11090(1)(E). This wage order regulates wages, hours, and working conditions in the transportation industry, but exempts from such requirements any employees in the airline and railway industries who have entered into a collective bargaining agreement (“CBA”) that meets the requirements of the RLA. See id. It is undisputed that the CBAs governing Appellants’ employment meet the requirements for the RLA exemption. It is also undisputed that the CBAs specify that shifts added by Fleet Service employees through shift trades do not trigger overtime premium wage rates. Appellants, however, argue that the RLA exemption does not create an exemption to the Labor Code’s overtime requirements. The California Labor Code authorizes the Industrial Welfare Commission (“IWC”) “to establish minimum wages, maximum hours and standard conditions of employment for all employees in the state.” Collins v. Overnite Transp. Co., 105 Cal.App.4th 171, 129 Cal. Rptr. 2d 254, 255 (2003). Exercising this authority, the IWC promulgated a series of wage orders, which apply to separate industries or occupations. See Cal. Code Regs. tit. 8, §§ 11000-170. Although wage orders are not legislative enactments, California law deems them “presumptively valid” sources of regulation that are “to be accorded the same dignity as statutes.” Brinker Rest. Corp. v. Superior Court, 53 Cal.4th 1004, 139 Cal.Rptr.3d 315, 273 P.3d 513, 527-28 (2012) (citation omitted); see also Cal. Lab. Code § 1173 (tasking the IWC with the duty, among others, “to ascertain the wages paid to all employees in this state, to ascertain the hours and conditions of labor and employment in the various occupations, trades, and industries in which employees are employed in this state”). Historically, overtime in California was governed solely by the wage orders. See Collins, 129 Cal. Rptr. 2d at 257. -- - - WESll.AW Angeles v. US Airways, Inc., 790 Fed.Appx. 878 (2020) © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 The wage orders also provide a series of exemptions to overtime requirements, including Wage Order 9’s RLA exemption, which the IWC added in 1976 after determining that “it would be difficult to enforce standards for employees crossing state lines and that the exempted employees were better protected by their collective bargaining agreements *880 pursuant to the Railway Labor Act.” Industrial Welfare Commission, Statement of Findings by the Industrial Welfare Commission of the State of California in Connection with the Revision in 1976 of its Orders Regulating Wages, Hours and Working Conditions (Aug. 13, 1976). In 1999 the California Labor Code added overtime requirements but expressly authorized the IWC to “review, retain, or eliminate an exemption ... contained in a valid wage order in effect in 1997.” Cal. Lab. Code § 515(b). The RLA exemption is such an exemption because it was adopted in 1976 and has been retained in all subsequent versions of Wage Order 9, including the version in effect in 1997. Therefore, the IWC did not act in direct contravention of the Labor Code by retaining the RLA exemption-rather, it was a preexisting exemption that the Legislature acknowledged and incorporated into the statutory scheme through Section 515(b). See Collins, 129 Cal. Rptr. 2d at 260 (holding that Labor Code Section 515(b) “express[es] a legislative intent to leave undisturbed the exemptions from ‘provisions regulating hours of work ... contained in any valid wage order in effect in 1997.’ ” (alteration in original)). Accordingly, the RLA exemption excuses US Airways from both Wage Order 9’s overtime requirements and Section 510 ’s overtime requirements. AFFIRMED. All Citations 790 Fed.Appx. 878 (Mem) Footnotes * The Honorable Eugene E. Siler, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. ** This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36‐3. 1 Appellants also request that the we certify the instant issue on appeal to the California Supreme Court. Because we find this unnecessary, we deny Appellants’ request. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. -- WESTLAW