Ruffin v. Dudek and Associates

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 SIMONE RUFFIN, Case No.: 3:22-cv-00191-RBM-BGS 12 Plaintiff, ORDER: 13 v. (1) GRANTING DUDEK AND 14 DUDEK AND ASSOCIATES, INC. et ASSOCIATES, INC.’S MOTION TO al., 15 COMPEL ARBITRATION [Doc. Defendants. 34]; 16 17 (2) DENYING TEKSYSTEMS, DUDEK AND ASSOCIATES, INC., INC.’S MOTION TO COMPEL 18 ARBITRATION AS MOOT [Doc. Cross Claimant, 19 22]; v. 20 (3) DENYING TEKSYSTEMS, TEKSYSTEMS, INC., et al., 21 INC.’S MOTION TO DISMISS FOR Cross Defendants. FAILURE TO STATE A CLAIM 22 WITHOUT PREJUDICE [Doc. 17]; 23 and 24 (4) STAYING CASE PENDING 25 ARBITRATION 26 [Doc. 34] 27 28 1 BACKGROUND 2 Plaintiff filed suit against Dudek on February 10, 2022, alleging various 3 employment-related claims, including but not limited to violation of Title VII of the Civil 4 Rights Act of 1964, violations of the Equality Act of 2010, and violation of the Health and 5 Safety at Work Act 1974. (See Doc. 1.) Plaintiff alleges she sustained damages in the 6 amount of $100,000,000 stemming from Dudek’s employees’ alleged sexual harassment 7 of Plaintiff, which created a hostile working environment. (See id.) 8 Dudek filed its answer and affirmative defenses to Plaintiff’s Complaint on March 9 29, 2022. (Doc. 3.) The same day, Dudek filed a cross-claim against TekSystems, Inc. 10 and TekSystems Global Services, LLC (“TekSystems”). (Doc. 4.) In its cross-claim, 11 Dudek asserts Plaintiff was a temporary employee placed by TekSystems with Dudek for 12 a position in 2019, and that TekSystems is required to indemnify Dudek for Plaintiff’s 13 claims against Dudek. (Id. at 2.) 14 Since then, the parties have filed various motions, certain of which remain pending 15 before the Court. On June 7, 2022, TekSystems filed a motion to dismiss Dudek’s 16 counterclaims. (Doc. 17.) Dudek filed an opposition to the motion to dismiss on July 11, 17 2022, and TekSystems filed a reply on July 18, 2022. (Docs. 20, 21.) 18 TekSystems subsequently filed a motion to compel arbitration of Dudek’s 19 counterclaims on August 1, 2022. (Doc. 22.) TekSystems sought to compel arbitration 20 pursuant to a May 17, 2018 Services Agreement between Dudek and TekSystems, which 21 contains an arbitration provision in Section 29 requiring arbitration of “[a]ll disputes, 22 controversies, or differences arising in connection with the validity, execution, 23 performance, breach, non-renewal or termination of this Agreement[.]” (Doc. 22-1 at 2; 24 see also Exhibit 1, Doc. 22-2 at 12.) Dudek initially filed an opposition to TekSystem’s 25 motion to compel. (Docs. 23, 35.) However, Dudek simultaneously withdrew its 26 opposition to the motion to compel (Docs. 35), and filed a separate motion to compel (Doc. 27 34) on January 18, 2023. Dudek’s motion seeks to compel Plaintiff to submit her claims 28 to arbitration, on the basis that she entered a Mutual Arbitration Agreement with 1 TekSystems on June 18, 2019 (“TekSystems Arbitration Agreement”). (Doc. 34; see also 2 Doc. 34-3 at 1-9.) 3 The TekSystems Arbitration Agreement provides 4 [e]xcept (i) as expressly set forth in this section . . . all disputes, claims, complaints, or controversies . . . that I may have against TEKsystems, Inc. and/or any of its 5 subsidiaries, affiliates, officers, directors, employees, agents, and/of its clients or 6 customers (collectively and individually the ‘Company’), or that the Company may have against me, including contract claims; tort claims; discrimination and/or 7 harassment claims; retaliation claims; claims for wages, compensation, penalties or 8 restitution; and any other claim under any federal, state, or local statute, constitution, regulation, rule, ordinance, or common law, arising out of and/or directly or 9 indirectly related to my application for employment with the Company, and/or my 10 employment with the Company, and/or the terms and conditions of my employment with the Company, and/or termination of my employment with the Company 11 (collectively ‘Covered Claims’), are subject to confidential arbitration pursuant to 12 the terms of this Agreement and will be resolved by Arbitration and NOT by a court or jury. The parties hereby forever waive and give up the right to have a judge or a 13 jury decide any Covered Claims. 14 (Doc. 34-3 at ¶ 12 & pp. 6-9.) Its “Governing Law” section states the Agreement is 15 governed by the Federal Arbitration Act. (Id. at pp. 6-7.) 16 The hearing date on Dudek’s motion to compel is February 21, 2023. (Doc. 34.) 17 The time for Plaintiff to file an opposition to the Dudek’s motion to compel arbitration was 18 February 7, 2023. See CivLR 7.1(e)(2). Pursuant to Civil Local Rule 7.1(f)(3)(c), “[i]f an 19 opposing party fails to file the papers in the manner required by Civil Local Rule 7.1.e.2, 20 that failure may constitute a consent to the granting of a motion or other request for ruling 21 by the Court.”1 Dudek’s motion to compel may be granted based upon Civil Local Rule 22 23 24 1 On January 17, 2023, Dudek filed an Ex Parte Motion to Stay Discovery, Early Neutral 25 Evaluation, and Other Deadlines set forth in the Court’s November 11, 2022 order setting an early neutral evaluation conference (Doc. 27). (Doc. 33.) In response, Plaintiff filed a 26 motion to compel a case management conference where she raised some argument as to 27 Dudek’s meet and confer correspondence regarding their intention to file a motion to compel arbitration. (Doc. 38 at 13.) Plaintiff’s motion to compel a case management 28 1 7.1(e)(2), however, the Court will substantively address Dudek’s motion to compel. 2 DISCUSSION 3 A. Arbitration Agreement Encompasses Plaintiff’s Claims 4 The FAA provides a written provision in “any . . . contract evidencing a transaction 5 involving commerce to settle by arbitration a controversy thereafter arising . . . shall be 6 valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for 7 the revocation of any contract or as otherwise provided in chapter 4.” 9 U.S.C. § 2. “The 8 Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope 9 of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand 10 is the construction of the contract language itself or an allegation of waiver, delay, or a like 11 defense to arbitrability.” Chiron Corp. v. Ortho Diagnostic Systems, Inc., 207 F.3d 1126, 12 1131 (9th Cir. 2000) (internal citation omitted). Any party bound to an arbitration 13 agreement that falls within the scope of the FAA may bring a motion to compel arbitration. 14 9 U.S.C. §§ 3, 4. The FAA mandates that “district courts shall direct the parties to proceed 15 to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter 16 Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). The Court must consider “(1) whether a 17 valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses 18 the dispute at issue.” Kilgore v. KeyBank, Nat’l Ass’n, 718 F.3d 1052, 1058 (9th Cir. 2013) 19 en banc (citation omitted); see also 9 U.S.C. § 2. 20 No party has presented evidence that Plaintiff’s claims are outside the scope of the 21 TekSystems Arbitration Agreement or that the claims cannot proceed to arbitration. The 22 TekSystems Arbitration Agreement is covered under the FAA. There is a signed 23 agreement to arbitrate between TekSystems and Plaintiff, and the dispute arises out of 24 25 fine print[,]” however to date, Plaintiff has not filed an opposition to Dudek’s motion to 26 compel. (Id.) Magistrate Judge Bernard G. Skomal held a telephonic status conference on 27 January 20, 2022 regarding Dudek’s ex parte application, issued a written order staying the dates set forth in the Court’s November 22, 2022 order, and denied Plaintiff’s motion to 28 1 Plaintiff’s temporary employment with TekSystem’s client, Dudek. The TekSystems 2 Arbitration Agreement covers disputes that Plaintiff may have “against TEKsystems, Inc. 3 and/or any of its . . . clients or customers (collectively and individually the ‘Company’) . . 4 . arising out of and/or directly or indirectly related to . . . [Plaintiff’s] employment with the 5 Company[.]” (Doc. 34-3 at ¶ 12 & p. 6.) This provision includes claims for discrimination, 6 harassment, retaliation, and “any other claim under any federal, state, or local statute, 7 constitution, regulation, rule, ordinance, or common law[.]” (Id.) 8 Plaintiff has presented no argument that the TekSystem’s Arbitration Agreement is 9 not valid or enforceable under the FAA. Accordingly, the Court finds TekSystem’s 10 Arbitration Agreement is valid and enforceable. 11 B. No Evidence of Procedural or Substantive Unconscionability 12 The Court now turns to whether there are any grounds for revocation of the 13 arbitration agreement, which is an issue governed by state law. 9 U.S.C. § 2; Perry v. 14 Thomas, 482 U.S. 482, 493 n.9 (1987). Under California law, “the party opposing 15 arbitration bears the burden of proving any defense, such as unconscionability.” Pinnacle 16 Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 282 P.3d 1217, 1224-1225 (Cal. 17 2012). Other than a vague reference to the arbitration agreement being “one-sided”— 18 which has not been set forth in an opposition brief to Dudek’s motion to compel—Plaintiff 19 has presented no argument that the TekSystems Arbitration Agreement is procedurally or 20 substantively unconscionable. Supra pp. 3-4 n.1 (citing Doc. 38 at 13); see also CivLR 21 7.1(f)(3)(c). Assuming arguendo Plaintiff did allege she was subject to a contract of 22 adhesion, this argument alone is not sufficient to render the agreement procedurally 23 unconscionable because at this time there is “no indication of oppression or surprise.” 24 Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1260-61 (9th Cir. 2017) (if employee must 25 sign a non-negotiable employment agreement as a condition of employment but “there is 26 no other indication of oppression or surprise” then “the agreement will be enforceable 27 unless the degree of substantive unconscionability is high.”). Therefore, the TekSystems 28 Arbitration Agreement is enforceable absent a finding of substantive unconscionability. 1 An agreement that is “overly harsh,” “unduly oppressive,” unreasonably favorable,” 2 “so one-sided as to shock the conscience,” “unfairly one-sided” has been considered 3 substantively unconscionable. Sanchez v. Valencia Holding Co., LLC, 353 P.3d 741, 748 4 (Cal. 2015). At this time, Plaintiff has presented no evidence of substantive 5 unconscionability. See CivLR 7.1(f)(3)(c). Lacking any evidence of substantive 6 unconscionability, the TekSystems Arbitration Agreement is enforceable. 7 C. The Armendariz Requirements are Satisfied 8 Dudek asserts that TekSystems Arbitration Agreement satisfies the requirements 9 established by Armendariz v. Foundation Health Psychcare Services, Inc. (Doc. 34-1 at 10 13-15); see Armendariz, 6 P.3d 669, 682-689 (Cal. 2000). Under California law, an 11 arbitration agreement must: (1) provide for a neutral arbitrator; (2) provide for adequate 12 discovery; (3) require a written arbitration award; (4) provide for the same remedies that 13 would otherwise be available to the employee in court; and (5) provide that the Company 14 shall bear the costs of arbitration. 15 Here, the TekSystems Arbitration Agreement provides that the parties will use 16 Judicial Arbitration and Mediation Services (“JAMS”) and the arbitration shall be 17 conducted under JAMS rules. (Doc. 34-3 at ¶ 12 & p. 6.) The JAMS rules require use of 18 a neutral arbitrator and require the parties to cooperate in the exchange of discovery. See 19 JAMS Employment Arbitration Rules and Procedures, Rules 7, 17 (available at 20 https://www.jamsadr.com/rules-employment-arbitration/English) (last visited Feb. 8, 21 2023). The Agreement provides that “[t]he Arbitrator shall issue a final and binding written 22 award[.]” (Doc. 34-3 at ¶ 12 & p. 6.) There is no limitation on damages or statutory 23 remedies. (Id. at p. 6-9) The Company bears the costs of the arbitrator’s fee and arbitration 24 expenses. (Id. at 7.) Absent any evidence from Plaintiff to the contrary, the Armendariz 25 requirements are met. 26 CONCLUSION 27 For the reasons set forth above, Dudek’s motion to compel (Doc. 34) is GRANTED. 28 In light of the Court’s ruling as to Dudek’s motion to compel, TekSystems’ motion to 1 || compel (Doc. 22) is DENIED AS MOOT, and TekSystems’ motion to dismiss (Doc. 17) 2 ||is DENIED WITHOUT PREJUDICE. Plaintiffs claims against Dudek shall proceed in 3 || arbitration. This case is STAYED pending conclusion of arbitration pursuant to the terms 4 || of the June 18, 2019 Arbitration Agreement between TekSystems and Plaintiff. Within 14 5 of the completion of arbitration proceedings, the parties shall jointly submit a report 6 ||advising the Court of the outcome of the arbitration and request to dismiss the case or 7 || vacate the stay. 8 IT IS SO ORDERED. 9 || DATE: February 8, 2023 Fe Bamunlr, J iterygs 1 HON: RUTH BERMUDEZ'MONTENEGRO UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28