Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-04892/USCOURTS-cand-3_07-cv-04892-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1331 Fed. Question: Fair Labor Standards

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

PETER E. KRESSY,

Plaintiff,

 v.

LARRY FLYNT’S HUSTLER CLUB

SAN FRANCISCO, et al.,

Defendants. /

No. C-07-04892 EDL

ORDER GRANTING MOTION TO

COMPEL ARBITRATION AND

STAYING CASE

Defendants’ Motion to Stay Action and Compel Arbitration came on for hearing before the

Court on December 18, 2007. Having read all the papers submitted, including Defendants’

supplemental papers, and carefully considered the relevant legal authority, Defendants’ motion is

hereby GRANTED for the following reasons and for the reasons stated at the hearing.

Plaintiff Peter Kressy (“Plaintiff”) brings various wage and hour claims under the Fair Labor

Standards Act (“FLSA”) against his former employer, Hustler Club San Francisco, Saw

Entertainment Ltd. d/b/a Hustler Club (together, “Hustler”), and BS Management (“BSM”)

(collectively, “Defendants”). In his prayer for relief, Plaintiff seeks overtime wages, fees, damages,

liquidated damages, future wages, and wages withheld. Complaint ¶¶ 17-19. He does not seek

injunctive relief, but notes that he would forego the relief requested in his suit if re-instated. Id. ¶

22.

Defendants have made a demand for arbitration, Plaintiff has refused that demand, and now

Defendants seek an order compelling submission of Plaintiff’s claims to binding arbitration and

staying the instant proceeding.

On May 3, 2007, Plaintiff and Hustler signed a “Mutual Agreement to Arbitrate Claims and

Case 3:07-cv-04892-EDL Document 22 Filed 01/11/08 Page 1 of 3
United States District Court

For the Northern District of California

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Waive Class Actions” (hereinafter “Arbitration Agreement”). That agreement states:

1. Claims covered by this agreement. Employee and Employer

mutually agree to the resolution by arbitration of all claims or controversies

arising out of Employee’s employment or termination (collectively, the

“Claims”) that either party may have against the other, including

Employer’s parent, subsidiaries, or affiliates or any of their officers,

directors, shareholders, representatives, attorneys, agents, or assigns in their

capacity as such or otherwise. The Claims covered include without

limitation, claims arising out of contract, tort, or common law, wrongful

discharge law, privacy rights, statutory or constitutional protections, wage

and hour law, claims for violation of any federal, state or other

governmental law, statute, regulation, or ordinance, or any other dispute

between the parties. The parties understand that, by this Agreement, they

are waiving their rights to have a Claim adjudicated by a court or jury.

2. Claims Not Covered by This Agreement. Claims Employee may

have workers’ compensation, state unemployment compensation benefits,

and state disability insurance are not covered by this Agreement . . . .

4. Arbitration. Except as otherwise provided above, arbitration shall be

in accordance with the National Rules for Resolution of Employment

Disputes of the American Arbitration Association (AAA Rules) before a

neutral arbitrator who is selected by agreement of the parties or AAA Rules.

. . . 

Ruffin Decl., Ex. A (Arbitration Agreement).

By the plain terms of the agreement, the Arbitration Agreement extends to Plaintiff’s claims,

because it extends to claims arising out of employee’s employment, including wage and hour claims. 

The agreement also applies to all Defendants, as Plaintiff alleges a general agency relationship

between Defendants. See Complaint.

In addition, the Federal Arbitration Act, 9 U.S.C. § 2, (“FAA”) applies to the agreement. 

The FAA’s coverage provision, § 2, states that “[a] written provision in any maritime transaction or

a contract evidencing a transaction involving commerce to settle by arbitration a controversy

thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part

thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of

such a contract, transaction or refusal, shall be valid, irrevocable, and enforceable, save upon such

grounds as exist at law or in equity for the revocation of any contract.” Congress intended to

exercise its commerce power “to the full” in enacting this provision. Allied-Bruce Terminix Cos. v.

Dobson, 513 U.S. 265, 277 (1995). Here, the Hustler Club routinely has out-of-state customers,

contracts with out-of-state entertainers and businesses, including payroll services, purchases supplies

Case 3:07-cv-04892-EDL Document 22 Filed 01/11/08 Page 2 of 3
United States District Court

For the Northern District of California

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 California Labor Code § 229 does not appear applicable as Plaintiff appears to seek relief

under federal wage laws.

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from out-of-state businesses, advertises out-of-state, and operates under a registered tradename

licensed to nightclubs through out the United States. Carouba Decl. ¶¶ 2-10. The FAA, therefore,

compels arbitration. Because the FAA provides for stays of proceedings in federal district courts

when an issue in the proceeding is referable to arbitration, a stay is proper. EEOC v. Waffle House,

Inc., 534 U.S. 279, 289 (2002). 

Even if the FAA did not apply, however, California law also supports compelling arbitration. 

Arbitration shall be ordered if an agreement to arbitrate exists, unless the right to arbitrate has been

waived or the agreement is otherwise non-enforceable. CCP § 1281.2(a) and(b); see also CCP §

1281.4.1 In addition, the requirements for the lawful arbitration of such rights pursuant to a

mandatory employment arbitration agreement are met here, as the agreement provides for a neutral

arbitrator; the agreement does not prohibit discovery, a written decision, or assessment of costs and

fees (which are therefore implied terms); and the agreement is governed by the National Rules of the

American Arbitration Association, which rules permit the award of any relief available in a judicial

proceeding. See Armendariz v. Found. Health Psychcare Servs., 24 Cal. 4th 83, 102, 113 (2000). In

addition, Defendants obligated itself by its statements and in open Court to pay the costs of

arbitration.

 Accordingly, Defendants’ Motion is GRANTED and this case is STAYED pending

arbitration of the claimed raised in the complaint. It is FURTHER ORDERED that the parties shall

submit a joint status statement updating the Court on the status of the arbitration no later than April

30, 2008.

IT IS SO ORDERED.

Dated: January 11, 2008 

ELIZABETH D. LAPORTE

United States Magistrate Judge

Case 3:07-cv-04892-EDL Document 22 Filed 01/11/08 Page 3 of 3