Martinez-Gonzalez v. Elkhorn Packing Co.
| Decision Date | 03 November 2021 |
| Docket Number | 19-17311 |
| Parties | Dario Martinez-Gonzalez, on behalf of himself and other aggrieved employees, Plaintiff-Appellee, v. Elkhorn Packing Co. LLC; D'Arrigo Bros. Co. of California, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Argued and Submitted February 1, 2021 San Francisco, California
Amended February 14, 2022
Appeal from the United States District Court for the Northern District of California No. 3:18-cv-05226-EMC Edward M. Chen District Judge, Presiding
Regina Silva (argued) and Dan J. Bulfer, Atkinson Andelson Loya Ruud Romo, La Jolla, California; Geoffrey F. Gega, Law Offices of Geoffrey Gega, Santa Ana, California; for Defendants-Appellants.
Karla Gilbride (argued) and Rodolfo Padilla, Public Justice P.C. Washington, D.C.; Ana Vicente de Castro and Josephine B Weinberg, California Rural Legal Assistance Inc., Salinas, California; for Plaintiff-Appellee.
Bruce Goldstein, Iris Figueroa, and Gabriela Hybel, Farmworker Justice, Washington, D.C., for Amicus Curiae Farmworker Justice.
Before: Eugene E. Siler, [*] Johnnie B. Rawlinson, and Patrick J. Bumatay, Circuit Judges.
The panel reversed the district court's order refusing to enforce arbitration agreements between Dario Martinez-Gonzalez and his former employers in an action alleging violations of federal and state labor and wage laws.
Elkhorn Packing Company is a farm labor contractor for D'Arrigo Brothers, a California-based grower of vegetables. As part of Elkhorn's orientation for incoming employees, Martinez-Gonzalez signed employment paperwork that included arbitration agreements. The district court held that the arbitration agreements resulted from undue influence and economic duress, and therefore the agreements were invalid and unenforceable.
The panel held that under California law, the doctrine of economic duress did not render the arbitration agreements unenforceable because Elkhorn did not commit a wrongful act and reasonable alternatives were available to Martinez-Gonzalez. Martinez-Gonzalez asserted that Elkhorn committed a wrongful act by asking him to sign the arbitration agreement after he made the journey from Mexico to California, where he was dependent on Elkhorn housing and had already started harvesting lettuce. The panel held that, while the circumstances surrounding the signing of the agreements were not ideal, they did not constitute a "wrongful act" under California law. The panel held further that Martinez-Gonzalez also failed to demonstrate a lack of reasonable alternatives where the agreements themselves did not say they were necessary for him to keep his job, no one at Elkhorn told Martinez-Gonzalez that refusing to sign the agreements was a cause for termination, and Martinez-Gonzalez admitted that no one at Elkhorn told him he would be terminated if he did not sign the agreements. With no threat of termination or express statement that the agreements were mandatory, it was clearly erroneous for the district court to conclude that Martinez-Gonzalez lacked a reasonable alternative - such as asking whether he could decline to sign the agreements. Furthermore, Martinez-Gonzalez had another reasonable alternative - to revoke the arbitration agreements.
The doctrine of "undue influence" can be used to rescind an agreement under California law. The panel held that the economic duress doctrine is employed only in limited circumstances, and here there was no reason to invoke this last resort given the lack of wrongful actions, the existence of reasonable alternatives, and Martinez-Gonzalez's continued ability to vindicate his interests in arbitration. Martinez-Gonzalez did not show undue susceptibility where the facts did not support a finding that he was especially vulnerable to pressure. Given the lack of heightened susceptibility, Martinez-Gonzalez had to establish that "extraordinary force" was brought against him to prove undue influence. The panel held that the conditions here, while not ideal, were a far cry from actions considered "oppressive" under California law where: the timing and place of the orientation did not show that Martinez-Gonzalez's will was overborne; the lack of time to consult with attorneys or read the agreements did not improperly induce Martinez-Gonzalez's signatures since Elkhorn did not interfere with his ability to use either option; Elkhorn's representatives' instructions to sign the agreements quickly were not insistent demands; and Elkhorn representatives' general statements to follow the company's rules and directions had nothing to do with the arbitration agreements. Given the totality of the circumstances, the panel held that the district court clearly erred in finding undue influence here.
The panel remanded to the district court to determine whether Martinez-Gonzalez's claims fell within the scope of the arbitration agreements.
Judge Rawlinson dissented because the majority completely disregarded the district court's comprehensive factual findings following trial and the clear error standard of review. She agreed with the district court because the district court did not clearly err in concluding, after a bench trial, that the atmosphere surrounding the arbitration agreements rose to the level of a wrongful act. In addition, the district court's finding of economic duress was amply supported by the evidence developed during trial, and the majority's contrary finding was not.
ORDERThe opinion filed on November 3, 2021, and published at 17 F.4th 875, is amended by the opinion filed concurrently with this order.
With this amended opinion, Appellee's petition for panel rehearing and rehearing en banc is DENIED. Judge Bumatay and Judge Siler have voted to deny the petition for panel rehearing. Judge Bumatay has voted to deny the petition for rehearing en banc and Judge Siler so recommends. Judge Rawlinson has voted to grant the petition for panel rehearing and rehearing en banc. The full court has been advised of the petition for rehearing en banc and no judge has requested a vote on whether to rehear the matter en banc. Fed. R. App. P. 35. No further petitions for panel rehearing or rehearing en banc may be filed.
For three consecutive lettuce-harvesting seasons, Dario Martinez-Gonzalez worked as a farm laborer for Elkhorn Packing Company and D'Arrigo Brothers (collectively, "Elkhorn"). After quitting his job in the middle of the third season, Martinez-Gonzalez sued his former employers, alleging violations of federal and state labor and wage laws. Elkhorn later moved to compel arbitration under agreements signed by Martinez-Gonzalez after he traveled to the United States and started harvesting lettuce. The district court refused to enforce the arbitration agreements, holding that Martinez-Gonzalez signed them under economic duress and undue influence. We reverse and remand.
Elkhorn Packing Company is a farm labor contractor for D'Arrigo Brothers, a California-based grower of vegetables. In 2015, Martinez-Gonzalez resided in Mexicali, Mexico, supporting his wife and their parents, when he learned about an opportunity to work for Elkhorn in the United States. A job at Elkhorn paid up to five times as much as Martinez-Gonzalez earned in Mexico. In 2016, Elkhorn accepted Martinez-Gonzalez's application and helped him obtain an H-2A temporary agricultural worker visa. Elkhorn then transported Martinez-Gonzalez to Monterey County, California, to start the job.
Elkhorn held orientations for incoming employees. For Martinez-Gonzalez, the orientation did not occur until a few days after he began harvesting lettuce in the fields. The orientation took place at the end of the workday, at around 4 p.m., in a hotel parking lot. At the orientation, some 150 workers were asked to sign employment paperwork. To facilitate the signing of the paperwork, Elkhorn representatives directed employees to form lines, where they stood-in at least one case for 40 minutes-and waited to sign the packages. Once at the front of the line, an Elkhorn representative told each employee where to sign while flipping through the pages. Representatives urged employees to hurry so that others could have a chance to sign.
The employment package included an arbitration agreement. The agreement required employees to resolve all disputes with Elkhorn by arbitration. The agreement was written in Spanish, Martinez-Gonzalez's native language. Martinez-Gonzalez signed the arbitration agreement without reading it. Elkhorn representatives didn't explain the contents of the arbitration agreement to Martinez-Gonzalez, [1] didn't give him a copy of the agreement, and didn't tell him he could consult an attorney before signing it. On the other hand, Martinez-Gonzalez didn't ask for a copy of the agreement, attorney consultation, or time to read the agreement. All sides agree that Elkhorn never expressly told Martinez-Gonzalez that he had to sign the agreement to keep working for the company.
Martinez-Gonzalez completed the 2016 season and traveled back to Mexico on Elkhorn-funded transportation. For the 2017 season, Martinez-Gonzalez again harvested lettuce for Elkhorn in Monterey County, California.[2] He also signed an arbitration agreement for the 2017 season. But Martinez-Gonzalez didn't finish the 2017 season. He quit Elkhorn mid-season and returned to Mexico on his own.
In 2018, Martinez-Gonzalez sued Elkhorn in California state court on behalf of himself and other similarly situated workers, alleging a failure to pay federal minimum wages under the Fair Labor Standards Act, and state-law claims related to meals, wages, rest periods, and privacy. Elkhorn removed the case to federal district...
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