Cooley v. The Servicemaster Co.

Decision Date17 August 2021
Docket Number2:20-cv-01382-MCE-DB
CourtU.S. District Court — Eastern District of California
PartiesTYRON COOLEY, on behalf of himself and all others similarly situated, Plaintiff, v. THE SERVICEMASTER COMPANY, LLC, TERMINIX INTERNATIONAL, INC., THE TERMINIX INTERNATIONAL COMPANY LIMITED PARTNERSHIP, and DOES 1 through 50, inclusive, Defendants.
MEMORANDUM AND ORDER

MORRISON C. ENGLAND, JUDGE.

Plaintiff Tyron Cooley, on behalf of himself and all others similarly situated, (Plaintiff) seeks relief from Defendants The ServiceMaster Company, LLC, Terminix International, Inc., The Terminix International Company Limited Partnership, and DOES 1 through 50, inclusive (collectively, Defendants or “Terminix”) for violation of Cal. Lab. Code §§ 201-204; Cal. Lab. Code §§ 201-203, 226, 226.7, 510, 512, 1194, 2699 et seq., 2751, and 2802; applicable Industrial Welfare Commission Wage Orders; Cal Bus. & Prof. Code § 17200, et seq.; and Labor Code Private Attorneys General Act of 2004 (“PAGA”). See Not. of Removal, Exhibit A, Jul. 8, 2020, ECF No. 1.

On May 8, 2020, Plaintiff filed a class and representative action Complaint in Sacramento Superior Court against Defendants for alleged employment law violations arising from his employment with Terminix. In his Complaint, Plaintiff asserted claims for: (1) failure to provide wages due upon termination; (2) failure to provide meal periods; (3) failure to provide rest periods; (4) failure to pay overtime; (5) failure to provide accurate wage statements; (6) failure to indemnify necessary business expenses; (7) violations of the California Business and Professions Code sections 17200 et seq.; and (8) civil penalties under PAGA.” Mot. to Compel Arb. at 5. On July 8, 2020, Defendants timely removed the case to this Court. Not. of Removal, ECF No. 1.

Presently before the Court are Plaintiff's Motion to Remand, ECF No. 5, and Defendants' Motion to Dismiss, Compel Arbitration, and Stay Proceedings, ECF No. 7, both of which are fully briefed. For the reasons set forth below Plaintiff's Motion to Remand is DENIED and Defendants' Motion to Compel Dismiss, Arbitration, and Stay Proceedings is GRANTED.[1]

BACKGROUND[2]

Plaintiff was employed by Defendants as a field representative or “outside sales representative” from approximately November 2014 to April 2019. During the relevant period Plaintiff alleges he was subject to violations of the California Labor Code and California Business and Professions Code and that civil penalties are warranted under PAGA.

According to Defendants, Plaintiff's employment with them was subject to their mandatory arbitration policy, the We Listen Plan (“Agreement”), which they purportedly provided to employees at least three separate times. First, during the onboarding process, Defendants purportedly provided their employees with the Associate Handbook, which contained a summary of the Agreement on pages 11 through 13 in the same formatting and font style as the rest of the Associate Handbook. Employees, including Plaintiff, then sign a Handbook Acknowledgement Form, which states:

I also acknowledge receiving information on how to utilize ServiceMaster's mandatory dispute resolution program, We Listen, to resolve any and all work-related disputes/concerns and its requirement to arbitrate such disputes if they are not resolved.

Glass Decl., Ex. B (2018 Plan) at 18, ECF No. 7-2. In bold and capitalized text, however, that same form also provides:

I ACKNOWLEDGE THAT THE HANDBOOK IS NOT AN EMPLOYMENT CONTRACT AND IS NOT INTENDED TO, NOR DOES IT, CREATE A CONTRACT OF ANY KIND.

Id.

Second, Defendants contend they provide their employees with a hard copy of the Agreement itself. Id. Employees were not required to acknowledge or sign that Agreement, and Plaintiff contends that it, in fact, was never provided to him. ECF No. 9 at 12. Regardless, the Agreement is purportedly intended to cover the following:

For purposes of this Plan, a Covered Dispute means all claims or disputes arising out of or relating to my employment, termination of employment or application for employment that I or the Company could otherwise have resolved in a court. . . The Plan covers the following legal claims that either the Company or I could bring relating to my employment relationship with the Company, including, but not limited to, those related to: . . . (vii) claims under federal, state or local law regarding wages and other compensation, benefits, reimbursement of expenses . . . and associated laws.

ECF No. 7-2 at Ex. G at 31.

Third, Defendants aver that they had employees electronically review and acknowledge receipt of several documents, including the Agreement, in its then-HRIS system known as “myHR.” Once logged into the portal, Defendants' employees were instructed to “Read the [Agreement], and then select ‘Done' to move to the next page.” Once the employee selected the link to the Agreement, a copy of the Agreement was displayed in PDF format, which the employee could save electronically to his/her computer or print in hard copy. The first paragraph of the Agreement in the myHR portal states:

The Plan includes a mutual agreement to arbitrate my individual covered Disputes which is the exclusive, final and binding remedy for both the Company and me and includes a class action waiver. I understand the Company nor I will be allowed to bring any Disputes to a court or jury for a resolution except as set forth in the Plan.

Id. at Ex. C at 20.

After closing or minimizing the We Listen document, the employee was returned to a “Checklist screen” and shown a message that rest: “By clicking ‘Done' you acknowledge that you have been given access to the [Agreement] and that it describes important information about the company and that you should consult your supervisor, manager or human resources about any questions regarding information contained in the [Agreement].” (emphasis added). After acknowledging receipt of the Agreement on November 18, 2014, Plaintiff continued to work for Defendants until April 3, 2019.

In November 2018, Defendants rolled out the 2018 version of the Agreement (2018 Agreement”) in conjunction with the prior version of the Agreement. On December 21, 2018, Defendants emailed the 2018 Agreement to employees via email and posted the 2018 Agreement to the company intranet as well as Defendants' online forum. Moreover, these corporate communications stated that “continued employment ‘constitutes an implied agreement to use this process.' Additionally, Defendants' branch managers distributed copies of the 2018 Agreement to all branch employees. The 2018 Agreement became effective on January 1, 2019.

Plaintiff maintains, however, that he never received the Handbook or the communications regarding the 2018 Agreement roll out from Defendants. Plaintiff further asserts that he never received the document from his branch manager. Furthermore, Plaintiff alleges that he did not see any postings of the 2018 Agreement on the company's intranet. Plaintiff further contends that all employees had the same intranet login information. Finally, according to Plaintiff, all documents that were acknowledged through the intranet, had to be acknowledged simultaneously upon clicking “Done reading, ” even though it was impossible to read all the documents at once.

STANDARD
A. Motion to Remand

When a matter over “which the district courts of the United States have original jurisdiction” is initially brought in state court, the defendant may remove it to federal court “embracing the place where such action is pending.” 28 U.S.C. § 1441(a). There are two bases for federal subject matter jurisdiction: (1) federal question jurisdiction under 28 U.S.C. § 1331, and (2) diversity jurisdiction under 28 U.S.C. § 1332. A district court has federal question jurisdiction in “all civil actions arising under the Constitution, laws, or treaties of the United States.” Id. § 1331. A district court has diversity jurisdiction “where the matter in controversy exceeds the sum or value of $75, 000, . . . and is between citizens of different states, or citizens of a State and citizens or subjects of a foreign state . . . .” Id. § 1332(a)(1)-(2).

A defendant may remove any civil action from state court to federal district court if the district court has original jurisdiction over the matter. 28 U.S.C. § 1441(a). “The party invoking the removal statute bears the burden of establishing federal jurisdiction.” Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988) (citing Williams v. Caterpillar Tractor Co., 786 F.2d 928, 940 (9th Cir. 1986)). Courts “strictly construe the removal statute against removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal citations omitted). [I]f there is any doubt as to the right of removal in the first instance, ” the motion for remand must be granted. Id. Therefore, [i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded” to state court. 28 U.S.C. § 1447(c). ///

B. Motion to Compel Arbitration and Stay Proceedings

“The [Federal Arbitration Act (“FAA”)] was enacted in 1925 in response to widespread judicial hostility to arbitration agreements.” AT&T Mobility LLC v Concepcion, 131 S.Ct. 1740, 1745 (2011). Under the FAA, arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Section 2 of the FAA “reflect[s] . . . a ‘liberal federal policy favoring arbitration.” Concepcion, 131 S.Ct. at 1745 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). At the same time, however, § 2 reflects “the ‘fundamental principle...

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