Willis v. Prime Healthcare Servs., Inc.

• Decision Date: 14 November 2014
• Docket Number: B253712
• Citation: 180 Cal.Rptr.3d 297,231 Cal.App.4th 615
• Court: California Court of Appeals Court of Appeals
• Parties: Maucabrina WILLIS, Plaintiff and Appellant, v. PRIME HEALTHCARE SERVICES, INC., Defendant and Appellant.

231 Cal.App.4th 615

180 Cal.Rptr.3d 297

Maucabrina WILLIS, Plaintiff and Appellant,

v.PRIME HEALTHCARE SERVICES, INC., Defendant and Appellant.

B253712

Court of Appeal, Second District, Division 5, California.

Filed November 14, 2014

As Modified November 19, 2014

Certified for Partial Publication.^*

Karasik Law Firm and Gregory N. Karasik for Plaintiff and Appellant.

Sheppard, Mullin, Richter & Hampton, Richard J. Simmons, Daniel J. McQueen and Robert Mussig, Los Angeles, for Defendant and Appellant.

I. INTRODUCTION

Defendant, Prime Healthcare Services, Inc., appeals from a December 16, 2013 order denying its petition to compel arbitration and strike class claims. Plaintiff, Maucabrina Willis, cross-appeals from a December 16, 2013 order denying her Code of Civil Procedure section 128.7¹ sanctions motion. Plaintiff and defendant are subject to both individual and collective bargaining agreements. Defendant argues plaintiff is required to arbitrate her statutory claims under an individual arbitration agreement. Defendant contends the individual arbitration agreement is enforceable because it is consistent with the collective bargaining agreement. We agree with defendant and reverse the order denying defendant's petition to compel arbitration. We affirm the trial court's denial of plaintiff's sanctions motion. Upon remittitur issuance, the trial court is to compel arbitration and stay the action until completion of arbitration.

In the published portion of this opinion, we will discuss the relationship between the individual and collective bargaining agreements. The arbitration clause at issue is contained in the fair treatment process (Fair Treatment Process or the individual agreement). Plaintiff relies upon the decision in J.I. Case Co. v. NLRB (1944) 321 U.S. 332, 333–339, [64 S.Ct. 576, 88 L.Ed. 762] ( J.I. Case ) and asserts the arbitration clause in the individual agreement is unenforceable. We conclude that the J.I. Case opinion does not permit us to refuse to enforce the arbitration clause in the individual agreement which is subject to the Federal Arbitration Act. ( 9 U.S.C. § 2.)

II. BACKGROUND

A. Class Action Complaint

On November 19, 2012, plaintiff filed a class action complaint against defendant alleging Labor Code violations for failure to pay minimum wages; failure to pay all wages owed upon termination; and civil penalties for inaccurate wage statements. In addition, the complaint alleges an unfair competition cause of action in violation of Business and Professions Code section 17200 et seq. The complaint alleges plaintiff was a nonexempt clerk at Centinela Hospital Medical Center (the hospital) before being terminated by defendant on December 11, 2011. During her employment, plaintiff allegedly was not paid for all the hours she worked. The electronic system used by defendant to calculate payroll systematically computed less total hours than the actual time that plaintiff worked. As a result, plaintiff was not paid minimum wages for all the hours she worked and received inaccurate wage statements. In addition, plaintiff was not paid all wages owed to her upon termination. The complaint makes no reference to the collective bargaining agreement.

B. Defendant's Petition to Compel Arbitration

1. Overview of defendant's arguments

On August 26, 2013, defendant filed a petition to compel arbitration and dismiss the class claims. Defendant argued plaintiff was required to arbitrate her employment-related claims pursuant to her arbitration agreement with Centinela Freeman Health System. (The spelling of Centinela Freeman Health System varies at different parts of the record.) Defendant is the parent company of Prime Healthcare Centinela, LLC, which purchased the hospital from Centinela Freeman Health System. Defendant contended it was entitled to enforce the arbitration agreement because Centinela Freeman Health System assigned its interest in all agreements related to the hospital to Prime Healthcare Centinela, LLC.

2. Stipulated facts

As part of the evidence, the parties stipulated to the following undisputed facts in connection with the petition. On October 19, 2007, plaintiff was hired to work at the hospital by Centinela Freeman Health System. On October 1 and 19, 2007, plaintiff signed an employment application and employment acknowledgment form. Both forms contain provisions whereby plaintiff agreed to submit any dispute regarding her employment with Centinela Freeman Health System to binding arbitration. Also, a collective bargaining agreement between the hospital and Service Employees International Union United Healthcare Workers West (the union) governed hospital employees in specified represented bargaining units. Plaintiff worked at the hospital in a position within a bargaining unit represented by the union. She became a union member and was covered by the collective bargaining agreement.

Further, the parties stipulated effective November 1, 2007, Prime Healthcare Centinela, LLC, acquired the hospital from CFHS Holdings, Inc., pursuant to an asset purchase agreement. Under the asset purchase agreement, Prime Healthcare Centinela, LLC, recognized the union as the hospital representative of the bargaining units. Prime Healthcare Centinela, LLC, assumed all the legal obligations of Centinela Freeman Health System with respect to the collective bargaining agreement. The collective bargaining agreement continued to govern hospital employees including plaintiff after the hospital was acquired by Prime Healthcare Centinela, LLC. The collective bargaining agreement expired on December 31, 2009, but remained in effect after its expiration. Plaintiff's employment at the hospital was terminated on December 12, 2011. On that date, the provisions set forth in article 9 of the collective bargaining agreement regarding the grievance procedure remained in effect.

3. Defendant's evidence

Defendant submitted the following documents in support of its petition: plaintiff's employment application; plaintiff's employee acknowledgment form; Centinela Freeman Health System's Fair Treatment Process brochure, which provided for arbitration of employment-related disputes; and the asset purchase agreement between Centinela Freeman Health System's holding company, CFHS Holdings, Inc., and Prime Healthcare Centinela, LLC. The October 1, 2007 employment application with Centinela Freeman Health System, signed by plaintiff, contains the following provision: "I understand that any and all disputes regarding my employment with [Centinela Freeman Health System], including any disputes relating to the termination of my employment, are subject to the [Centinela Freeman Health System] Fair Treatment Process, which includes final and binding arbitration, and I also understand and agree, as a condition of employment and continued employment, to submit any such disputes for resolution under that process, and I further agree to abide by and accept the decision of the Arbitration panel as the final and binding decision and resolution of any such disputes I may have."

The October 19, 2007 employee acknowledgment form signed by plaintiff states in part: "In addition, I acknowledge that I have received and reviewed a copy of the [Centinela Freeman Health System] Fair Treatment Process brochure. I hereby voluntarily agree to use the Company's Fair Treatment Process and to submit to final and binding arbitration any and all claims and disputes that are related in any way to my employment or the termination of my employment with [Centinela Freeman Health System]. I understand that final and binding arbitration will be the sole and exclusive remedy for any such claim or dispute against Tenet, or its parent, subsidiary or affiliated companies or entities, and each of its and/or their employees, officers, directors or agents, and that by agreeing to the arbitration to resolve any dispute, both the Company and I agree to forego any right we each may have had to a jury trial on issues covered by the Fair Treatment Process. I also agree that such arbitration will be conducted before an experienced arbitrator chosen by me and the Company, and will be conducted under the Federal Arbitration Act and the procedural rules of the American Arbitration Association (‘AAA’). [¶] I further acknowledge that in exchange for my agreement to arbitrate, the Company also agrees to submit all claims and disputes it may have with me to final and binding arbitration, and that the Company further agrees that if I submit a request for binding arbitration, my maximum out-of-pocket expenses for the arbitrator and the administrative costs of the AAA will be an amount equal to one day's pay (if I am a non–exempt employee), or the local civil filing fee, whichever is less and that the Company will pay all of the remaining fees and administrative costs of the arbitrator and the AAA. I further acknowledge that this mutual agreement to arbitrate may not be modified or rescinded except by a written statement signed by both me and the Company." The references to Centinela Freeman Health System are handwritten into the employment acknowledgment form.

The Fair Treatment Process brochure is entitled, "Tenet Open Door Policy and Fair Treatment Process." None of the evidence sheds any light on the nature of any "Tenet" entities' relationship to this case. The Fair Treatment Process itself provides for a five-step process that starts with informal discussion and ends with final and binding arbitration. In step 1, the employee is required to submit the dispute to a supervisor. Step 2 allows the employee to appeal the supervisor's decision to the department head. In step 3, the employee may appeal the department head's decision to the hospital's administration. If the dispute is not resolved, the employee may appeal to the Fair Treatment Process committee in step 4. If the employee does not accept the decision reached in step 4, he or she has the right to submit the dispute to final and...