Roebuck v. Healthsource Global Staffing

Filing 12

ORDER by Judge Richard Seeborg granting 11 Motion to Compel Arbitration. (cl, COURT STAFF) (Filed on 3/25/2014)

1
2
3
4
5
6
7
IN THE UNITED STATES DISTRICT COURT

9

FOR THE NORTHERN DISTRICT OF CALIFORNIA

10

SAN FRANCISCO DIVISION

11
For the Northern District of California

United States District Court

8

12

KAREN ROEBUCK, an individual, on behalf
of herself and all others similarly situated,

13
14
15
16
17

No. CV 14-00295 RS
ORDER GRANTING MOTION TO
COMPEL ARBITRATION

Plaintiff,
v.
HEALTHSOURCE GLOBAL STAFFING,
and DOES 1 through 100,
Defendants.
____________________________________/

18
19
20

I. INTRODUCTION
Plaintiff Karen Roebuck brings this action on behalf of herself and others similarly situated

21

against defendants HealthSource Global Staffing and Does 1–100 (collectively “HealthSource”)

22

alleging violations of the Fair Labor Standards Act (29 U.S.C. §§ 201 et seq.) and nonpayment of

23

wages pursuant to Massachusetts laws governing overtime pay (Mass. Gen. Laws ch. 151, §§ 1a,

24

1b). Healthsource moves to compel arbitration, invoking an arbitration agreement Roebuck signed

25

before starting work as a nurse in Massachusetts for the Fremont-based corporation. Roebuck has

26

not filed any opposition to the motion. Pursuant to Civil Local Rule 7-1(b), the motion is suitable

27

for disposition without oral argument. For the following reasons, Roebuck’s motion is granted and

28

this action is stayed pending arbitration.

II. BACKGROUND

1
2

As alleged in her complaint, Roebuck was hired by HealthSource as a non-exempt nurse

3

sometime during the three years preceding the filing of her complaint. According to Roebuck, she

4

was neither provided with uninterrupted meal periods nor compensated for work performed during

5

her purported meal periods. She further alleges that when she was paid overtime, it was not paid at

6

the correct overtime rate because various forms of non-discretionary incentive pay were improperly

7

excluded from her overtime pay calculation. On the basis of these allegations, she brings a claim for

8

relief under the Fair Labor Standards Act on behalf of herself and a putative class consisting of “All

9

HealthSource nursing employees who worked in the United States, who are or were employed
within the three years preceding the filing of this action by the Defendant, and who: (a) were not

11
For the Northern District of California

United States District Court

10

fully compensated for all time worked, and/or (b) were not fully compensated for this time worked

12

over forty hours per week at the proper overtime rates.” (Complaint ¶ 13.) She brings a second

13

claim under Massachusetts state law for failure to pay overtime wages on behalf of herself and a

14

putative class consisting of HealthSource nursing employees who worked in Massachusetts during

15

the same time period.

16

HealthSource seeks to dismiss or stay this action, arguing Roebuck is obligated to resolve

17

the dispute via arbitration according to the terms of an employment agreement signed by Roebuck

18

before she began work for HealthSource. The employment agreement (a copy of which was

19

submitted by HealthSource in support of its motion to compel arbitration) provides that “any dispute

20

arising out of, in connection with, or relating to this Agreement . . . shall be resolved by binding

21

individual (not class, collective, or consolidated) arbitration.” (Declaration of Michael A. Maxey

22

Jr., Exh. A, ¶ 10(b).) A copy of the agreement was provided via email to Roebuck prior to her start

23

date. (Exh. B.) Roebuck has not filed any response to HealthSource’s motion to compel arbitration.

24

III. DISCUSSION

25
26

A. Applicability of the Agreement
To resolve whether a dispute is subject to arbitration, the court first determines whether the

27

parties agreed to arbitrate and, if they did, whether the agreement covers the dispute at issue.

28

Chiron Corp v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 1996). “[A]n agreement
NO. 14-CV-00295 RS
ORDER GRANTING MOTION TO COMPEL ARBITRATION

2

1

to arbitrate is a matter of contract: ‘it is a way to resolve those disputes—but only those disputes—

2

that the parties have agreed to submit to arbitration.’” Id. (quoting First Options of Chicago, Inc. v.

3

Kaplan, 514 U.S. 938, 943 (1995)). Records submitted by HealthSource in support of the instant

4

motion reflect that Roebuck reviewed and electronically signed the agreement before starting work

5

for HealthSource. Roebuck has not disputed the accuracy of these records nor otherwise argued that

6

the arbitration clause in her employment agreement is unenforceable. The evidence submitted by

7

HealthSource provides a sufficient basis to conclude that the parties entered into a valid agreement

8

to arbitrate.

9

HealthSource further asserts that the agreement covers the dispute at issue. By its terms, the
arbitration clause applies to “any dispute arising out of, in connection with, or relating to this

11
For the Northern District of California

United States District Court

10

Agreement, including with respect to [Roebuck’s] employment by HealthSource or the termination

12

of such employment and any dispute as to the validity, interpretation, construction, application or

13

enforcement of any provision of this Agreement . . . .” (Exh. A, ¶ 10(b).) The employment

14

agreement includes provisions governing Roebuck’s regular hourly rate and overtime pay. (Id.,

15

¶ 4(a).) As such, the agreement can fairly be read to cover Roebuck’s claims.

16

B. Enforceability of the Agreement

17

As an employment arbitration policy, the agreement is subject to the Federal Arbitration Act

18

(“FAA”). Circuit City Stores v. Adams, 532 U.S. 105, 113 (2001). Federal policy encourages

19

arbitration, and courts must therefore “place arbitration agreements on an equal footing with other

20

contracts.” AT&T Mobility v. Concepcion, 131 S. Ct. 1740, 1745 (2011). Under the FAA,

21

arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist

22

at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 (2012).

23

The agreement at issue does not include a choice of law provision. It does, however, specify

24

that any arbitration shall occur in Alameda County, California, and that any legal action related to or

25

arising out of the agreement shall be brought exclusively in the federal or state courts located in

26

California. It therefore appears prudent to consider California state law for the limited purpose of

27

reviewing the enforceability of this arbitration provision in light of the uncontested motion to

28

compel arbitration.
NO. 14-CV-00295 RS
ORDER GRANTING MOTION TO COMPEL ARBITRATION

3

1

Under California law, a contractual clause is unenforceable only if it is both procedurally

2

and substantively unconscionable. See Armendariz v. Found Health Psychcare Servs., Inc., 24 Cal.

3

4th 83, 114 (2000); Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1280 (9th Cir. 2006). Procedural

4

unconscionability arises from circumstances surrounding the formation and negotiation, with

5

particular concern for the elements of oppression and surprise. Armendariz, 24 Cal. 4th at 114. An

6

arbitration provision is substantively unconscionable if it is “overly harsh” or generates “one-sided

7

results” by, for example, “reallocate[ing] risks in an objectively unreasonable or unexpected

8

manner.” Serpa v. California Sur. Investigations, Inc., 215 Cal. App. 4th 695, 703 (2013), as

9

modified (Apr. 19, 2013), as modified (Apr. 26, 2013) (quoting Armendariz, 24 Cal. 4th at 114.)
Roebuck has not opposed HealthSource’s motion to compel arbitration on the grounds that

11
For the Northern District of California

United States District Court

10

this contract provision is either procedurally or substantively unconscionable. Procedurally, it

12

appears that Roebuck received and signed a copy of the employment agreement in advance of her

13

starting date with HealthSource. Substantively, there is nothing on the face of the agreement to

14

suggest that enforcement would lead to “overly harsh” or “one-sided results.” Armendariz, 24 Cal.

15

4th at 114. The Ninth Circuit has noted several types of provisions that might be substantively

16

unconscionable, none of which are present in this agreement. See, e.g., Circuit City Stores, Inc. v.

17

Mantor, 335 F.3d 1101, 1107 (9th Cir. 2003) (cost-splitting, excessive filing fees, and unilateral

18

power to modify are all substantively unconscionable provisions); Ferguson v. Countrywide Credit

19

Indus., 298 F.3d 778, 784–85 (9th Cir. 2002) (arbitration provisions that bilaterally mandate

20

arbitration for types of claims employees are likely to bring or bilaterally preclude types of claims

21

that employers are more likely to bring are substantively unconscionable); Chavarria v. Ralphs

22

Grocery Co., 733 F.3d 916, 924 (9th Cir. 2013) (an arbitration provision that always results in the

23

choice of arbitrator being decided by the employer is substantively unconscionable).

24
25

IV. CONCLUSION
Roebuck’s claims are subject to arbitration under the agreement. HealthSource’s motion is

26

therefore granted and the hearing set for April 3, 2014, is vacated. This action is hereby stayed

27

pending completion of such arbitration. The Clerk is directed to close the file for administrative

28

purposes. It may be reopened for such additional proceedings as may be appropriate and necessary
NO. 14-CV-00295 RS
ORDER GRANTING MOTION TO COMPEL ARBITRATION

4

1

upon conclusion of the arbitration. If the matter is resolved by settlement, or in the event Roebuck

2

elects not to pursue arbitration, she shall promptly file a dismissal of this action.

3
4

IT IS SO ORDERED.

5
6
7

Dated: 3/25/14
RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE

8
9

11
For the Northern District of California

United States District Court

10

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
NO. 14-CV-00295 RS
ORDER GRANTING MOTION TO COMPEL ARBITRATION

5