Castro v. Cintas Corporation No. 3

Filing 33

ORDER by Judge Claudia Wilken GRANTING 19 MOTION TO STAY PROCEEDINGS. (ndr, COURT STAFF) (Filed on 4/11/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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MANUEL CASTRO,
Plaintiff,

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United States District Court
For the Northern District of California

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No. C 13-5330 CW
ORDER GRANTING
MOTION TO STAY
PROCEEDINGS
(Docket No. 19)

v.
CINTAS CORPORTATION NO. 3, a
Nevada Corporation,
Defendant.
________________________________/

Plaintiff Manuel Castro brought this putative class action

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against his former employer, Defendant Cintas Corporation No. 3,

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alleging various wage-and-hour violations.

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to compel arbitration of Plaintiff’s individual claims and to stay

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these proceedings pending the outcome of that arbitration.

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Plaintiff opposes the motion.

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submission without oral argument and now grants the motion.

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Defendant Cintas moves

The Court took the matter under

BACKGROUND
Cintas, a Washington corporation with headquarters in Ohio,

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provides a variety of specialized services to businesses

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throughout the United States and Canada.

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Plaintiff to work as a sales representative at its Gilroy,

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California location.

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terminated his employment in August 2013.

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Santa Clara County Superior Court two months later, alleging that

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Cintas violated various provisions of the California Labor Code by

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failing to provide its employees with meal and rest breaks,

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overtime pay, and timely payments of final wages.

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asserted claims against Cintas under California’s Unfair

In April 2006, it hired

Plaintiff held that position until Cintas
He filed this action in

He also

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Competition Law, Bus. & Prof. Code §§ 17200 et seq., and the

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Private Attorneys General Act (PAGA), Cal. Labor Code §§ 2698 et

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seq.

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Cintas removed the action to federal court in November 2013.
One month later, instead of filing an answer or a motion to

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dismiss, Cintas filed the instant motion to stay.

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it contends that Plaintiff’s individual claims are subject to

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binding arbitration under an agreement which he signed in May

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2012, while he was a Cintas employee.

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“California Employment Agreement for Sales, Services, and

United States District Court
For the Northern District of California

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In its motion,

That agreement, entitled

Marketing Personnel,” contains the following provision:
8.

EXCLUSIVE METHOD OF RESOLVING DISPUTES OR
DIFFERENCES

Should any dispute or difference arise between
Employee and Employer concerning whether
either party at any time violated any duty,
right, law, regulation, public policy, or
provision of this Agreement, the parties will
confer and attempt in good faith to resolve
promptly such dispute or difference. The
rights and claims of Employer covered by this
Section 8, including the arbitration
provisions below, include Employer’s claims
for damages, as well as reasonable costs and
attorneys’ fees, caused by Employee’s
violation of any provision of this Agreement
or any law, regulation or public policy. The
rights and claims of Employee covered by this
Section 8, including the arbitration
provisions below, include Employee’s rights or
claims for damages as well as reasonable costs
and attorneys’ fees, caused by Employer’s
violation of any provision of this Agreement
or any law, regulation or public policy. The
rights and claims of Employee covered by this
Section 8, including the arbitration
provisions below, specifically include but are
not limited to all of Employee’s rights or
claims arising out of or in any way related to
Employee’s employment with Employer, such as
rights or claims arising under [federal
employment statutes], state or local laws
regarding employment, common law theories such
as breach of express or implied contract,
wrongful discharge, defamation, and negligent
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United States District Court
For the Northern District of California

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or intentional infliction of emotional
distress[.] Excluded from the arbitration
provisions below in this Section 8 are all
unemployment benefits claims, workers’
compensation claims, claims for a declaratory
judgment or injunctive relief concerning any
provision of Section 4 of this Agreement
[pertaining to Employee’s non-disclosure
obligations], and claims not lawfully subject
to arbitration . . . .
If any dispute or difference remains
unresolved after the parties have conferred in
good faith, either party desiring to pursue a
claim against the other party will submit to
the other party a written request to have such
claim, dispute or difference resolved through
impartial and confidential arbitration. The
place of arbitration shall be in the county
and state where Employee currently works for
Employer or most recently worked for Employer.
. . . Arbitration under this Agreement will be
conducted in accordance with the [American
Arbitration Association]’s National Rules for
Resolution of Employment Disputes, except if
such AAA rules are contrary to applicable
state or federal law, applicable law shall
govern.

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Docket No. 21, V. Sharpe Decl., Ex. A, Employment Agreement, at 5.
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The agreement also stated that Plaintiff would receive an increase
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in pay in exchange for signing the agreement.

Id. at 2.

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Plaintiff signed the agreement on May 11, 2012.

Id. at 7.

He had

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previously signed another employment agreement with an identical
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arbitration provision in May 2011 and signed similar agreements in
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April 2010, April 2009, and April 2006.

Docket No. 27, V. Vig

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Decl. ¶¶ 5-7, Ex. A.
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LEGAL STANDARD
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Under the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et
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seq., written agreements that controversies between the parties
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shall be settled by arbitration are valid, irrevocable and
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enforceable.

9 U.S.C. § 2.

A party aggrieved by the refusal of

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another to arbitrate under a written arbitration agreement may

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petition the district court which would, save for the arbitration

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agreement, have jurisdiction over that action, for an order

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directing that arbitration proceed as provided for in the

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agreement.

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Fastbucks Franchise Corp., 622 F.3d 996, 1005 (9th Cir. 2010)

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(noting that the party seeking to compel arbitration bears the

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burden of proving the existence of a valid arbitration agreement

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by a preponderance of the evidence).

United States District Court
For the Northern District of California

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Id. § 4; see also Bridge Fund Capital Corp. v.

The FAA further provides

that:
If any suit or proceeding be brought in any of
the courts of the United States upon any issue
referable to arbitration under an agreement in
writing for such arbitration, the court in
which such suit is pending, upon being
satisfied that the issue involved in such suit
or proceeding is referable to arbitration
under such an agreement, shall on application
of one of the parties stay the trial of the
action until such arbitration has been had in
accordance with the terms of the agreement
. . . .

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9 U.S.C. § 3.

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arbitration agreement or the failure to comply with the agreement

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is not in issue, the court shall make an order directing the

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parties to proceed to arbitration in accordance with the terms of

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the agreement.”

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unmistakably provide otherwise, the question of whether the

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parties agreed to arbitrate is to be decided by the court, not the

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arbitrator.”

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U.S. 643, 649 (1986) (citations omitted).

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If the court is satisfied “that the making of the

Id. § 4.

“Unless the parties clearly and

AT&T Techs., Inc. v. Commc’ns Workers of Am., 475

The FAA reflects a “liberal federal policy favoring
arbitration agreements.”

AT&T Mobility LLC v. Concepcion, 131 S.
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Ct. 1740, 1745 (2011) (citations and internal quotation marks

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omitted).

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if it determines that: (1) there is a valid agreement to

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arbitrate; and (2) the dispute falls within its terms.

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Cingular Wireless Corp., 453 F. Supp. 2d 1138, 1143 (C.D. Cal.

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2006) (citing Chiron Corp. v. Ortho Diagnostic Sys., 207 F.3d

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1126, 1130 (9th Cir. 2000)).

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to arbitrate to be invalidated by ‘generally applicable contract

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defenses, such as fraud, duress, or unconscionability,’ but not by

A district court must compel arbitration under the FAA

Stern v.

However, the FAA “permits agreements

United States District Court
For the Northern District of California

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defenses that apply only to arbitration or that derive their

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meaning from the fact that an agreement to arbitrate is at issue.”

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Concepcion, 131 S. Ct. at 1746; see also Kilgore v. KeyBank, N.A.,

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673 F.3d 947, 963 (9th Cir. 2012) (“Concepcion did not overthrow

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the common law contract defense of unconscionability whenever an

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arbitration clause is involved.”).

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DISCUSSION

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Plaintiff contends that Cintas lacks the authority to enforce

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the May 2012 employment agreement because it was not a party to

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that agreement.

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authority to enforce the agreement, the arbitration provision is

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not enforceable because it is unconscionable.

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argues that, regardless of whether or not the arbitration

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provision is enforceable, his claims in this action fall outside

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the scope of the provision.

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these arguments is persuasive.

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I.

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He further contends that, even if Cintas has the

Finally, Plaintiff

As explained further below, none of

Cintas’ Authority to Enforce the Employment Agreement
Plaintiff asserts that Cintas cannot enforce the employment

agreement against him because it was not a party to the agreement.
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He notes that the first page of the agreement refers to “Cintas

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Corporation” as the “Employer” -- not Cintas Corporation No. 3,

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the entity named as a Defendant in this suit and whose name

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appeared on the paychecks he received when he was a Cintas

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employee.

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This argument ignores the first sentence of the agreement,

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which specifically states that the term “Employer” shall be used

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to refer not only to Cintas Corporation but also to its “agents,

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business units, wholly-owned subsidiaries and affiliated

United States District Court
For the Northern District of California

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companies.”

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dispute that Cintas Corporation No. 3, the entity he has sued, is

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a wholly owned subsidiary of Cintas Corporation.

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Cintas Corporation No. 3 may enforce the employment agreement

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here.

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(finding that an “arbitration agreement, although not signed by

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defendant [] or plaintiff [], nevertheless covers them” because

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they were made parties to the agreement through a clause binding

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all agents and associates of the signatory).

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II.

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Sharpe Decl., Ex. A, at 1.

Plaintiff does not

Accordingly,

See Michaelis v. Schori, 20 Cal. App. 4th 133, 139 (1993)

Unconscionability
Plaintiff contends that the employment agreement is

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unconscionable under California law.

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agreement is unconscionable and, further, asserts that the

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agreement should be governed by Ohio law.

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unconscionability is a question of state law, the Court must

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resolve the parties’ choice-of-law dispute before deciding whether

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the agreement is unconscionable.

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Cintas denies that the

Because

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A.

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Cintas contends that Ohio law governs the employment

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Choice of Law

agreement, citing the following provision of the agreement:

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THIS AGREEMENT WILL BE INTERPRETED, GOVERNED
AND ENFORCED ACCORDING TO THE FEDERAL
ARBITRATION ACT AND THE SUBSTANTIVE LAW (NOT
INCLUDING CHOICE OF LAW PRINCIPLES OR RULES)
OF THE STATE OF OHIO.

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Sharpe Decl., Ex. A, Employment Agreement, at 5.
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“Before a federal court may apply state-law principles to
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determine the validity of an arbitration agreement, it must
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United States District Court
For the Northern District of California

determine which state’s laws to apply.

It makes this

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determination using the choice-of-law rules of the forum state” -12
in this case, California.

Pokorny v. Quixtar, Inc., 601 F.3d 987,

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994 (9th Cir. 2010) (citing Paracor Fin., Inc. v. Gen. Elec.
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Capital Corp., 96 F.3d 1151, 1164 (9th Cir. 1996)).
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“‘When an agreement contains a choice of law provision,
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California courts apply the parties’ choice of law unless the
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analytical approach articulated in § 187(2) of the Restatement
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(Second) of Conflict of Laws . . . dictates a different result.’”
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Bridge Fund Capital, 622 F.3d at 1002 (quoting Hoffman v. Citibank
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(S.D.), N.A., 546 F.3d 1078, 1082 (9th Cir. 2008); alteration in
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original).

Under this approach,

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The law of the state chosen by the parties to
govern their contractual rights and duties
will be applied . . . , unless either
(a) the chosen state has no substantial
relationship to the parties or the transaction
and there is no other reasonable basis for the
parties’ choice, or
(b) application of the law of the chosen state
would be contrary to a fundamental policy of a
state which has a materially greater interest
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than the chosen state in the determination of
the particular issue and which . . . would be
the state of the applicable law in the absence
of an effective choice of law by the parties.

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Restatement (Second) of Conflict of Laws § 187(2).

The California

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Supreme Court has recognized that this approach reflects “a strong
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policy favoring enforcement” of choice-of-law provisions.
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Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 464-65
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(1992).
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Here, Ohio has a direct connection to the parties because
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Cintas is headquartered there.

This is sufficient to establish a

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United States District Court
For the Northern District of California

“substantial relationship” between the parties and the chosen
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state.

See id. at 467; Restatement (Second) of Conflict of Laws

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§ 187 cmt. f (recognizing that a “substantial relationship” with
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the chosen state exists where “one of the parties is domiciled or
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has his principal place of business” there).

Further, as other

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courts have recognized, Ohio’s doctrine of unconscionability does
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not conflict with any “fundamental policy” of California.

See

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Ramirez v. Cintas Corp., 2005 WL 2894628, at *4-*5 (N.D. Cal.)
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(rejecting plaintiffs’ argument that the application of Ohio
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contract law to an arbitration agreement would “would necessarily
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violate a fundamental California policy”); Zeif v. Cintas
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Corporation No. 2, Civil Case No. 13-0413-JVS, Docket No. 17, at 5
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(C.D. Cal. April 15, 2013) (“Although the exact parameters of
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unconscionability under Ohio law differ from those of California,
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they are similar enough such that the Court concludes that Ohio
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law on unconscionability is not contrary to a fundamental policy
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of California.”).

Plaintiff has not identified any conflict

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between Ohio’s doctrine of unconscionability and a fundamental
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policy of California.

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agreement -- and Plaintiff’s argument that it is unconscionable --

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must be examined under Ohio law.1

Accordingly, the May 2012 employment

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B.

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Ohio’s “unconscionability doctrine consists of two prongs:

Unconscionability under Ohio Law

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‘(1) substantive unconscionability, i.e., unfair and unreasonable

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contract terms, and (2) procedural unconscionability, i.e.,

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individualized circumstances surrounding each of the parties to a

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contract such that no voluntary meeting of the minds was

United States District Court
For the Northern District of California

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possible.’”

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143 Ohio App. 3d 708, 718 (2001) (citing Dorsey v. Contemporary

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Obstetrics & Gynecology, Inc., 113 Ohio App. 3d 75, 80 (1996)).

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“plaintiff must prove a quantum of both prongs” to establish that

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an arbitration agreement is unconscionable.

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2009 WL 5150264, at *2 (Ohio Ct. App.) (“A party seeking to

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invalidate an arbitration clause on grounds of unconscionability

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must establish that the provision is both procedurally and

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substantively unconscionable.”).

Jeffrey Mining Prods., L.P. v. Left Fork Mining Co.,

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Bozich v. Kozusko,

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Plaintiff argues that California law should govern the agreement
because this Court and the Ninth Circuit have both recently applied
California law to determine whether certain arbitration agreements were
unconscionable. See, e.g., Correa v. Firestone Complete Auto Care, 2013
WL 6173651 (N.D. Cal.) (“Under California law, an arbitration agreement
is unenforceable if it is both procedurally and substantively
unconscionable.” (emphasis added)). The cases he cites, however, are
inapposite because the relevant agreements in those case did not contain
choice-of-law provisions and the parties did not dispute that the
agreements were governed by California law. See Pokorny, 601 F.3d at
994 (“Under California law, the choice-of-law rules differ depending on
whether the parties have included a choice-of-law agreement in their
contract.”). Furthermore, even if California law did apply, the
arbitration would still be enforceable because Plaintiff has not
established that the agreement was substantively unconscionable, as
explained below.

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Plaintiff asserts that the May 2012 employment agreement is

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both substantively and procedurally unconscionable.

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relies entirely on California law -- and does not cite any Ohio

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case or statutory law in his brief -- the Court nevertheless

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considers his general arguments below.

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Although he

Substantive Unconscionability

Plaintiff contends that the arbitration provision is

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substantively unconscionable because it lacks mutuality.

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particular, he argues that the provision unduly favors Cintas by

In

United States District Court
For the Northern District of California

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allowing Cintas to seek declaratory or injunctive relief in a

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judicial forum if the employee fails to abide by the agreement’s

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non-disclosure requirements.

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This argument fails for two reasons.

First, under Ohio law,

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“mutuality is not a requirement of a valid arbitration clause if

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the underlying contract is supported by consideration.”

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Lehman Bros., Inc., 340 F.3d 386, 397 (6th Cir. 2003) (citing

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Joseph v. MBNA Am. Bank, N.A., 148 Ohio App. 3d 660, 664 (2002)).2

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As noted above, Plaintiff received a pay raise in exchange for

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signing the employment agreement.

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Thus, a lack of mutuality is not sufficient to establish that the

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arbitration provision is substantively unconscionable here under

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Ohio law.

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Ohio 2003) (finding arbitration agreement enforceable even though

Fazio v.

See Sharpe Decl, Ex. A, at 2.

See Raasch v. NCR Corp., 254 F. Supp. 2d 847, 855 (S.D.

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Plaintiff cites various California cases for the proposition that
a lack of mutuality in an arbitration agreement is evidence of
substantive unconscionability. However, the Sixth Circuit has
specifically noted that “there is no indication that Ohio courts have
adopted the California rule” regarding mutuality. Fazio, 340 F.3d at
396.

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it excluded coverage of “disputes over confidentiality, non-

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compete agreements or intellectual property rights”).

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Second, the arbitration provision is not as one-sided as
Plaintiff represents.

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instance, that the provision allows employees to avoid binding

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arbitration for certain claims, such as claims related to workers’

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compensation and unemployment benefits.

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Plaintiff highlights -- allowing Cintas to avoid arbitration for

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claims arising from breaches of confidentiality -- is relatively

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United States District Court
For the Northern District of California

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narrow and limited to a subset of Cintas’s potential claims for

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equitable relief.

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relief (including those based on employee breaches of

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confidentiality) remain subject to binding arbitration.

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the provision provides both parties to the agreement with

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reasonable, if narrow, exceptions to the general rule that all of

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their claims must be arbitrated.

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this provision would not be substantively unconscionable.

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v. Affiliated Computer Servs., Inc., 2006 WL 1320472, at *6 (N.D.

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Cal.) (“Because the agreement does not lack the requisite modicum

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of bilaterality with regard to claims covered, the Court finds

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that the coverage of the arbitration agreement is not

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substantively unconscionable.”).

Plaintiff fails to acknowledge, for

Moreover, the clause that

All of Cintas’s potential claims for monetary

In short,

Thus, even under California law,
Luafau

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Plaintiff next argues that the agreement’s choice-of-law

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clause -- which governs the entire agreement and not just the

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arbitration provision -- is substantively unconscionable because

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it selects Ohio, rather than California, as the state whose law

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governs the agreement.

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provision is commercially unreasonable.

Plaintiff fails to explain how this

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See Featherstone v.

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Merrill Lynch, Pierce, Fenner & Smith, Inc., 159 Ohio App. 3d 27,

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33 (2004) (“When considering substantive unconscionability, a

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court should determine whether the terms of the contract are

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commercially unreasonable.”).

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not preclude the employee from asserting any claims under another

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state’s law, as Plaintiff seeks to do here, nor does it require

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the employee to arbitrate any claims in Ohio.

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that the agreement itself be construed under the law of Ohio, the

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state where Cintas is domiciled.

The choice-of-law provision does

Rather, it requires

This is not enough to render the

United States District Court
For the Northern District of California

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entire agreement substantively unconscionable under Ohio law.3

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Nor would it be enough to render the agreement unconscionable

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under California law given that the choice-of-law clause itself is

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enforceable under California law.

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467 (recognizing that choice-of-law provisions should be enforced

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when the chosen state has a connection to the parties, such as

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“when ‘one of the parties is domiciled’ in the chosen state”

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(citations omitted)).

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Nedlloyd Lines, 3 Cal. 4th at

Finally, Plaintiff argues that the arbitration provision is

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unconscionable because it improperly shifts the costs of

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arbitration to the employee.

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arbitration are substantively unconscionable, Ohio courts engage

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in a “case-by-case analysis of the individualized deterrent

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effect” of those costs.

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628619, at *13 (Ohio Ct. App.).

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claimant’s “‘ability to pay the arbitration fees and costs, the

To determine whether the costs of

Garcia v. Wayne Homes, LLC, 2002 WL
This analysis focuses on the

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The situation would be different, of course, if the chosen state
lacked any connection to the parties and had been selected to benefit a
specific party.

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expected cost differential between arbitration and litigation in

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court, and whether that cost differential is so substantial as to

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deter the bringing of claims or cause arbitration to be an

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unreasonable alternative to the judicial forum.’”

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Riverfront Diversified, Inc., 197 Ohio App. 3d 471, 481 (2011)

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(quoting Garcia, 2002 WL 628619, at *13).

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provision caps the employee’s total arbitration costs at three

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hundred dollars and even provides a fee waiver for indigent

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employees.4

Moran v.

Here, the arbitration

This is less than it would cost the employee to file

United States District Court
For the Northern District of California

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a complaint in either state or federal court.

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arbitration costs imposed on the employee are not so great as to

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render the arbitration agreement substantively unconscionable

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under Ohio law.

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v. Hausfeld, 2013 WL 1435288, at *18 (N.D. Cal.) (finding

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arbitration agreement’s fee-shifting provision enforceable where

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it was both “mutual and not unduly burdensome” and did not impede

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the employee’s ability to vindicate his rights in California).

Accordingly, the

California law would yield the same result.

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Specifically, the agreement states,
Employee’s initial share of the arbitration filing
fee will not exceed one day’s pay or $100,
whichever is less . . . . The Arbitrator also
will have the authority to award either party
appropriate relief, including damages, costs and
attorney’s fees, as available under relevant laws.
In no event, however, will the Arbitrator direct
the Employee to pay more than a total of $200 or
two days of Employee’s pay, whichever is less,
toward the fees of the Arbitrator and the AAA.
Notwithstanding the above, upon Employee’s showing
of indigence, as determined by the Arbitrator
under applicable law, any arbitration fee or cost
that would otherwise be paid by Employee
(including any arbitration fee or cost) shall be
paid by Employer.

Sharpe Decl., Ex. A, at 5-6.

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King

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2.

Procedural Unconscionability

Plaintiff contends that the employment agreement was

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procedurally unconscionable because it was a contract of adhesion

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presented to him on a take-it-or-leave-it basis as a condition of

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his continued employment.

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evidence Plaintiff has submitted.

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This argument is not supported by the

In particular, Plaintiff has not shown that he was forced to

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sign the agreement as a condition of his continued employment.

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While he stated in his declaration that he was “required to sign

United States District Court
For the Northern District of California

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this agreement in order to receive a raise,” he never asserted

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that he needed to sign it in order to keep his job.

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23, M. Castro Decl. ¶ 3.

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states that Cintas would give Plaintiff a raise for signing the

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agreement but does not state that he was required to sign as a

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condition of his continued employment.

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(“As consideration for this Agreement, Employer . . . is

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increasing Employee’s rate of compensation.”).

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Plaintiff was already bound by the terms of an identical agreement

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which he signed one year earlier, Cintas would have had little

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incentive to condition his continued employment on the May 2012

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agreement.

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Docket No.

The agreement itself confirms this.

It

Sharpe Decl., Ex A, at 2

Given that

In any event, Ohio courts have made clear that merely

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presenting a standardized arbitration agreement to a party of

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lesser bargaining power on a take-it-or-leave-it basis is not

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sufficient to establish procedural unconscionability.

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Miami Jacobs Bus. Coll. Co., 2013 WL 394875, at *5 (S.D. Ohio)

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(rejecting plaintiffs’ argument “that the arbitration clause is

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procedurally unconscionable because it was provided to them on a
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Deck v.

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‘take-it-or-leave-it basis’ within a standardized form and thus

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was an adhesionary clause”); Alexander v. Wells Fargo Fin. Ohio 1,

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Inc., 2009 WL 2963770, at *3 (Ohio Ct. App.) (“[Plaintiff] argues

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that the arbitration provision was procedurally unconscionable

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because it was drafted by only one party and was presented on a

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‘take-it-or-leave-it’ basis.

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demonstrate procedural unconscionability.”).

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procedural unconscionability, “‘there must be some evidence that,

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in consequence of the imbalance, the party in the weaker position

This is not sufficient to
Rather, to show

United States District Court
For the Northern District of California

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was defrauded or coerced into agreement to the arbitration

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clause.’”

12

(N.D. Ohio 2009) (quoting Hawkins v. O’Brien, 2009 WL 50616, at *4

13

(Ohio Ct. App.)).

14

or coercion here because his employment was never in jeopardy and

15

he signed an identical agreement a year earlier.

16

Stachurski v. DirecTV, Inc., 642 F. Supp. 2d 758, 768

Plaintiff has not presented evidence of fraud

Plaintiff next argues that the agreement was procedurally

17

unconscionable because Cintas failed to provide him with a copy of

18

the agreement and the AAA rules incorporated by reference therein.

19

See Castro Decl. ¶ 6.

20

of procedural unconscionability,5 it does not justify invalidating

21

the arbitration agreement here.

22

signed an identical version of the employment agreement one year

23

earlier and signed similar versions in 2006, 2009, and 2010.

Although this failure offers some evidence

As previously noted, Plaintiff

All

24
5

25
26
27
28

See Eagle v. Fred Martin Motor Co., 809 N.E.2d 1161, 1177-78
(Ohio Ct. App. 2004) (finding procedural unconscionability where, among
other problems, the plaintiff “was not provided with a copy of the
arbitration clause or contract”); Jamison v. LDA Builders, Inc., 2013 WL
2152748, at *9 (Ohio Ct. App.) (finding evidence of procedural
unconscionability where one party failed to provide a copy of the
arbitration agreement to the other until several months after the
parties signed the agreement).

15

1

of these documents were kept in his personnel file and he could

2

have asked to review the documents at any time during his

3

employment.

4

opportunities to read the arbitration provision and to request

5

clarification of its terms, both before and after he signed it.

6

This minimizes the procedural unfairness associated with Cintas’s

7

failure to provide him with a copy of the agreement and

8

distinguishes this case from those he cites in his brief.

9

e.g., Chavarria v. Ralphs Grocery Co., 733 F.3d 916, 923 (9th Cir.

Vig Decl. ¶¶ 3-4.

Simply put, Plaintiff had multiple

See,

United States District Court
For the Northern District of California

10

2013) (finding an arbitration agreement procedurally

11

unconscionable under California law because defendant-employer

12

failed to provide plaintiff-employee with the terms of its

13

arbitration policy “until her employment orientation, three weeks

14

after the policy came into effect”).

15

In sum, the limited evidence of procedural unconscionability

16

that Plaintiff has produced is not sufficient to preclude

17

enforcement of the arbitration provision under Ohio law,

18

especially in light of his failure to show that the agreement

19

itself was substantively unconscionable.

20

Winchester Place Nursing, 996 N.E.2d 1001, 1009-10 (Ohio Ct. App.

21

2013) (recognizing evidence of procedural unconscionability where

22

“arbitration agreement was ‘buried’ in the middle of the document

23

and also referenced rules and procedures which were only available

24

online” but nevertheless finding arbitration provision enforceable

25

due to a lack of substantive unconscionability).

26

would be the same under California law.

27

Ass’n v. Pinnacle Mkt. Dev., LLC, 55 Cal. 4th 223, 247 (2012)

28

(recognizing that substantive and procedural unconscionability
16

See Harrison v.

This outcome

Pinnacle Museum Tower

1

must both be present to find an arbitration agreement

2

unconscionable).

3

C.

4

Plaintiff argues that, even if his other claims must be

5

arbitrated under the agreement, his PAGA claims cannot legally be

6

subject to arbitration.

7

of California cases holding that employment agreements which

8

subject an employee’s PAGA claims to binding arbitration are

9

unconscionable.

PAGA Claims

For support, he relies on a recent line

See, e.g., Brown v. Ralphs Grocery Co., 197 Cal.

United States District Court
For the Northern District of California

10

App. 4th 489, 494 (2011) (“We also hold that the recent decision

11

of the United States Supreme Court in [Concepcion], holding that

12

California decisional law invalidating class action waivers in

13

consumer arbitration agreements is preempted by the [FAA], does

14

not apply to representative actions under the PAGA.”).

15

These cases are inapplicable for the same reasons that all of

16

the other California cases Plaintiff cites are inapplicable: the

17

arbitration agreement must be construed under Ohio law, not

18

California law.

19

ultimately be governed by California law, the threshold question

20

of whether or not those claims may be lawfully subjected to

21

binding arbitration is a question of contract law governed by Ohio

22

law.

23

California’s doctrine of unconscionability under a rule created by

24

California courts.

25

rule regarding the arbitrability of private attorney general

26

actions.

27

2008) (rejecting plaintiff’s argument “that the arbitration

28

agreement is unconscionable because it limits her legal remedies,

Although Plaintiff’s claims against Cintas will

All of the cases Plaintiff cites were decided under

Ohio courts do not appear to follow the same

See Price v. Taylor, 575 F. Supp. 2d 845, 854 (N.D. Ohio

17

1

specifically the ability to bring a class action, join in claims

2

with others, or act as private attorney general”).

3

Even under California law, the question of whether PAGA

4

claims may be subjected to binding arbitration remains unsettled.

5

Plaintiff himself acknowledges that California’s lower courts are

6

divided on whether employment agreements that subject PAGA claims

7

to arbitration are enforceable and the California Supreme Court

8

has recently granted a petition for review to resolve this

9

division.6

Iskanian v. CLS Transp. of Los Angeles LLC, 147 Cal. Rptr.

United States District Court
For the Northern District of California

10

3d 324 (2012), granting review of 206 Cal. App. 4th 949 (2012).

11

even if the arbitration agreement in this case were governed by

12

California law, it is not clear that it would be unconscionable

13

merely because it subjects PAGA claims to binding arbitration.

14

III. Scope of Arbitration Provision

15

Thus,

Plaintiff asserts that his claims are not subject to binding

16

arbitration because the employment agreement’s arbitration

17

provision “only pertains to the Agreement itself and not to

18

anything outside the Agreement.”

19

He argues that, because his claims in this suit are not based on

20

the agreement itself -- which, according to Plaintiff, focuses

21

primarily on employees’ non-disclosure obligations -- the claims

22

fall outside the scope of the arbitration provision.

23

Docket No. 23, Pl.’s Opp., at 4.

This interpretation of the agreement is untenable.

The

24

arbitration provision expressly states that it encompasses any

25

dispute arising from the “Employer’s violation of any provision of

26
27
28

6

This Court previously acknowledged this division among lower
courts, without taking a position, in Davis v. Nordstrom, Inc., 2012 WL
4478297, at *7 n.1 (N.D. Cal.).

18

1

this Agreement or any law, regulation or public policy.”

2

Decl., Ex. A, at 5 (emphasis added).

3

covers the “Employee’s rights or claims arising out of or in any

4

way related to Employee’s employment with Employer” as well as any

5

“rights or claims arising under . . . state or local laws

6

regarding employment.”

7

which Plaintiff fails to discuss or even acknowledge in his

8

opposition brief -- plainly encompasses the California Labor Code

9

and UCL claims that Plaintiff has asserted in this action.

Sharpe

It also states that it

Id. (emphasis added).

This language --

See

United States District Court
For the Northern District of California

10

Zeif, Civil Case No. 13-0413-JVS, Docket No. 17, at 3 (reviewing

11

identical arbitration provision and concluding that plaintiff’s

12

California Labor Code claims and UCL claims “clearly fall within

13

the scope of the claims the parties agreed to submit to

14

arbitration”).

15

arbitration under the employment agreement.

Accordingly, Plaintiff’s claims are subject to

16
17

CONCLUSION
For the reasons set forth above, Defendant’s motion to stay

18

(Docket No. 19) is GRANTED.

19

arbitration, which must be diligently pursued.

20

order shall be considered a dismissal or disposition of this case

21

and, should further proceedings in this litigation become

22

necessary or desirable, any party may move to restore the case to

23

the Court’s calendar.

24

action.

25

This action is stayed pending
Nothing in this

This order administratively terminates this

IT IS SO ORDERED.

26
27
28

Dated:

4/11/2014

CLAUDIA WILKEN
United States District Judge
19