Solorio v. ABC Phones of N.C., Inc., Case No.: 1:20-cv-01051 NONE JLT

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
Writing for the CourtJennifer L. Thurston UNITED STATES MAGISTRATE JUDGE
PartiesPRISCILLA SOLORIO and MARIANO DIAZ, on behalf of themselves and all others similarly situated, Plaintiffs, v. ABC PHONES OF NORTH CAROLINA, INC. and DOES 1-100, Defendants.
Docket NumberCase No.: 1:20-cv-01051 NONE JLT
Decision Date03 February 2021

PRISCILLA SOLORIO and MARIANO DIAZ,
on behalf of themselves and all others similarly situated, Plaintiffs,
v.
ABC PHONES OF NORTH CAROLINA, INC. and DOES 1-100, Defendants.

Case No.: 1:20-cv-01051 NONE JLT

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

February 3, 2021


FINDINGS AND RECOMMENDATIONS GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION

(Doc. 7)

Priscilla Solorio and Mariano Diaz were employed by ABC Phones of North Carolina, Inc., at retail locations in California. Plaintiffs seek to hold their former employer liable for wage and hour violations under California law, on behalf of a class of others similarly situated. (See generally Doc. 1-3) Defendant ABC asserts Plaintiffs agreed to arbitrate claims on an individual basis and seeks to compel arbitration of the claims pursuant to that agreement. (Doc. 7) Plaintiffs oppose the motion, asserting ABC has not established the existence of an arbitration agreement and any agreement between the parties was unconscionable. (Doc. 8)

The Court found the matter suitable for decision without oral arguments, and the motion was taken under submission pursuant to General Order 618 and Local Rule 230(g). (Doc. 11) For the following reasons, the Court recommends Defendant's motion to compel arbitration be GRANTED and the action be STAYED.

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I. Background

Plaintiffs allege they are former store managers for ABC Phones of North Carolina, and were classified as "non-exempt, hourly" employees. (Doc. 1-3 at 3, ¶ 4) Priscilla Solorio was hired by ABC in March 2018 and became a store manager in September 2018. (Id. at 6, ¶ 18) Solorio remained a store manager until her employment with Defendant ended in August 2019. (Id.) During the course of her employment, Solorio worked at stores located in Delano and Fresno, California. (Id.) Mariano Diaz worked as a store manager in Chula Vista, California, "from approximately October 2017 to June 2019." (Id., ¶ 19)

According to Plaintiffs, "they typically were scheduled to work eight hours per day, five days a week, for a total of approximately 40 hours per week." (Doc. 1-3 at 8, ¶ 32) Plaintiffs contend they "were regularly required by management to work additional hours far beyond this scheduled time," and some days "worked ten hours per day and more." (Id.) They contend they were "regularly unable to take a meal period at the required time, and would otherwise have to perform work and be under Defendant's control during breaks." (Id.) Plaintiffs assert ABC employees are "routinely denied meal and rest periods for two reasons: (1) Defendant does not authorize, permit, and/or make available timely meal and rest breaks" and (2) employees "are often too busy with work during the day to have time to take bona fide meal and rest breaks." (Id. at 10, ¶ 40)

Plaintiffs allege the ABC Phones employees were required to "perform off-the-clock work for which they [were] not adequately compensated." (Doc. 1-3 at 3, ¶ 5) For example, Plaintiffs assert that ABC "requires its Store Managers to arrive at the store prior to the start of their paid shifts to perform work activities," such as unlocking the store, disengaging the alarm, logging in to the computer system, and loading "the necessary application to clock in to work via Defendant's timekeeping system." (Id. at 9, ¶ 35) Plaintiffs estimate they "spent approximately five to ten minutes performing work-related tasks" before they were "on-the-clock." (Id.) Plaintiffs contend other "off-the-clock" task occurred before and after their shifts, "including... completing sales, inventories, creating reports, training new employees, and cleaning." (Id., ¶ 36) They allege that off-the-clock tasks continued away from the stores, when they received "work-related calls and text messages outside of their shifts from Defendant's managers and employees, without pay." (Id., ¶ 37)

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According to Plaintiffs, they were "required to pay out of pocket for necessary business expenses accrued as result of their work for Defendant," without reimbursement. (Doc. 1-3 at 12, ¶ 47) Plaintiffs assert ABC Phones required them "to use their personal cellular phones and personal cellular voice, text, and date plans for extensive, regular work-related communications." (Id.) Plaintiffs allege the communications included work calls, text messages, and use of group message applications. (Id.)

In addition, Plaintiffs assert ABC did not provide them "accurate wage statements as required by California." (Doc. 1-3 at 12, ¶ 48) They contend ABC employees "receive wage statements that do not reflect all hours worked, premium pay for missed meal and rest break, and applicable overtime premiums." (Id.) Plaintiffs allege they are "owed wages and premium pay for all time worked, overtime, and missed meal and rest breaks when their employment ends." (Id., ¶ 49)

Based upon the foregoing, Plaintiffs filed a complaint on June 22, 2020, in Kern County Superior Court Case No. BCV-20-101428. (Doc. 1-3 at 2) Plaintiffs seek to challenge the applicable policies and practices of their former employer on behalf of themselves and others similarly situated. (Id. at 2) Specifically, Plaintiffs seek to hold ABC liable for the following: (1) failure to compensate for all hours worked in violation of Cal. Labor Code §§ 200, 204, 1194, and 1198; (2) failure to pay overtime wages in violation of Cal. Labor Code §§ 200, 510, 1194; (3) failure to provide meal and rest periods as required under Cal. Labor Code §§ 203, 223, 226.7, 512, and 1998; (4) failure to timely reimburse for necessary business expenditures under Cal. Labor Code § 2802; (5) failure to provide accurate, timely, and itemized wage statements in violation of Cal. Labor Code § 226; (6) waiting time penalties under Cal. Labor Code §§ 201-203; and (7) unfair business practices in violation of Cal. Bus. & Prof. Code § 17200. (Id. at 2, 16-27) On July 30, 2020, ABC filed a Notice of Removal (Doc. 1), thereby initiating the action in this Court.

On November 25, 2020, ABC filed the motion to compel arbitration now bending before the Court, asserting Plaintiffs "each executed an arbitration agreement" and agreed to arbitrate claims encompassed in this lawsuit on an individual basis. (Doc. 7-1 at 2, 8) Thus, ABC seeks to compel Plaintiff to arbitrate the claims, dismissal of the class action allegations, and a stay of the action pending completion of arbitration. (Doc. 7 at 2) Plaintiffs filed their opposition to the motion on January 13, 2021 (Doc. 8), to which ABC filed a reply on January 20, 2021 (Doc. 10).

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II. Evidence of Arbitration Agreements and Objections Thereto

Defendant contends that "when Plaintiffs were hired by ABC, they each executed an arbitration agreement." (See Doc. 7-1 at 2) ABC reports Diaz and Solorio had different hiring procedures—which the company refers to as "on-boarding"— because Diaz was brought in to the company "as part of ABC's acquisition of another wireless company, 4G Wireless." (Id. at 2) After Diaz accepted the offer, he "was on-boarded in or around February 2016." (Id., citing Patel Decl. ¶ 4) Former 4G Wireless employees, such as Diaz, were required to complete an arbitration agreement no later than December 2016 if they wanted to be eligible to earn commissions. (Id.; see also Doc. 7-2, Patel Decl. ¶¶ 5, 18) Solorio, who "was not a former 4G employee, ...went through ABC's normal on-boarding process" when she was hired in March 2018. (Doc. 7-1 at 2)

During the on-boarding process, "Solorio and Diaz both utilized ABC's online employee interface called Learning Management System ('LMS') to access a course titled "Arbitration Agreement for CA- ABC Phones of NC." (Doc. 7-1 at 3, citing Patel Decl. ¶¶ 11-12) Meenal Patel, who has "worked in the Training Department for ABC" since 2004, explained the LMS system, as well as other electronic employment tools used by ABC, required the employees "to enter a login that was assigned to each of them by ABC at the time each was hired, along with a password that he or she was required to create for himself or herself the first time they each logged on to the system." (Id. at 3, citing Patel Decl. ¶¶ 7-10; see also Doc. 10-2 at 3, ¶ 2)

Ms. Patel reports that Solorio and Diaz "were required to complete two 'courses' in the LMS." (Doc. 7-2 at 3, Patel Decl. ¶ 11) Notably, at the time Diaz completed the courses, the company used the Greenlight LMS, but by the time Solorio started, had switched to a different system and used the Cornerstone LMS. (Id., ¶ 7) However, "for purposes of reviewing and assenting to ABC's arbitration agreement, both the Greenlight and the Cornerstone system operated similarly and displayed similar language on the screens asking for each employee's acknowledgement." (Id., ¶ 14)

The first course required Plaintiffs to input their unique usernames and passwords prior to the display of "a PDF of the Arbitration Agreement for CA - ABC Phones of NC." (Doc. 7-2 at 4, Patel Decl. ¶ 11) Once the PDF was launched, Plaintiffs "had to back out... and launch the second course, which was titled 'Arbitration Agreement for CA." (Id. at 4, ¶ 12) Diaz and Solorio "each had to click-

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through an acknowledgement" and the computer screen indicated that "by clicking a button labeled 'Acknowledge,' Plaintiffs were agreeing to the terms of 'Arbitration Agreement for CA - ABC Phones of NC.'" (Id., ¶¶ 12-13) According to Ms. Patel, "Only after Plaintiffs launched both the Arbitration Agreement and the Acknowledgement courses in the LMS was the Arbitration Agreement considered completed." (Id., ¶ 15, emphasis added) Defendant asserts that as part of the on-boarding process, Diaz completed these arbitration courses in the Greenlight LMS on July 2, 2016; and Solorio completed the arbitration courses in the Cornerstone LMS on March 9, 2018. (Doc. 7-1 at 4; see also Doc. 7-2 at 3-5, ¶¶ 7, 18-19)

A. Agreement Displayed in the PDF Format

Initially, Ms. Patel indicated the Arbitration Agreements...

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