Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_12-cv-01114/USCOURTS-caed-2_12-cv-01114-3/pdf.json

Parties Involved:
Laurie Bueche
Plaintiff
Fidelity National Management Services, LLC
Defendant

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

LAURIE BUECHE, an individual, 

on behalf of herself, and on 

behalf of all persons 

similarly situated,

Plaintiff,

v.

FIDELITY NATIONAL MANAGEMENT 

SERVICES, LLC, a Delaware 

limited liability company, 

and DOES 1 through 50, 

inclusive,

Defendants.

No. 2:12-CV-1114-JAM-EFB

ORDER DENYING MOTION TO COMPEL 

ARBITRATION

This matter is before the Court on Defendant Fidelity 

National Management Services, LLC’s (“Defendant”) Motion to 

Compel Arbitration (Doc. # 15).1 Plaintiff Laurie Bueche 

(“Plaintiff”) opposes the motion (Doc. # 16). 

///

///

 

1 This motion was determined to be suitable for decision without 

oral argument. E.D. Cal. L.R. 230(g). The hearing was 

originally scheduled for June 5, 2013. 

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I. BACKGROUND

Plaintiff’s first amended class action complaint (Doc. # 1-

1, Ex. C) alleges that she was an escrow officer/escrow manager 

employed by Defendant from April 2000 to July 2011. Plaintiff 

alleges on behalf of herself and those similarly situated that 

she was undercompensated by Defendant because she was unlawfully 

misclassified as exempt from California’s wage and hour laws. 

Plaintiff’s claims are 1) Unlawful Business Practices, Cal. Bus. 

& Prof. Code § 17200, et seq.; 2) Failure to Pay Overtime 

Compensation, Cal. Lab. Code §§ 510, 515, 1194, and 1198; 

3) Failure to Provide Accurate Itemized Wage Statements, Cal. 

Lab. Code § 226; 4) Failure to Pay Wages When Due, Cal. Lab. Code 

§§ 201, 202, and 203; and 5) Violation of the Private Attorneys 

General Act, Cal. Lab. Code § 2698, et seq. Plaintiff alleges 

that her claims cover a four year period from February 6, 2008 to 

February 6, 2012. Federal subject matter jurisdiction exists 

because the parties’ citizenship is diverse and the amount in 

controversy exceeds $5,000,000. 28 U.S.C. § 1332(d). 

This motion is based on the arbitration provision in an 

employment contract the parties executed on March 5, 2004. The 

contract had a two year term, and the employment relationship 

defaulted to an at-will agreement when the contract terminated. 

The employment contract guaranteed Plaintiff’s employment with a 

set salary and benefits for two years absent just cause for her 

termination. Plaintiff agreed to refrain from competing with 

Defendant for the two year term. The parties also agreed, “Any 

dispute, difference, disagreement or controversy been [sic] or 

among the parties hereto, arising out of or in connection with 

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this Contract, shall be referred to a single arbitrator agreed 

upon by the parties hereto.” Santos Decl. (Doc. # 15-2), 

Ex. 2 ¶ 9.

Defendant argued in its moving papers that the arbitration 

clause requires that this matter be submitted to binding 

arbitration and that her representative claims cannot be 

arbitrated and should therefore be dismissed. Plaintiff 

responded in opposition that her claims arise from the California 

Labor Code, not the employment agreement between the parties, and 

that they are therefore outside of the scope of the arbitration 

clause. Neither party specifically addressed the fact that the 

contract relied on by Defendant expired in March 2006, but 

Plaintiff’s allegations only cover a period beginning in February 

2008 and ending in February 2012 when she filed her original 

complaint. The contract’s temporal clause states:

The term of this contract shall be the two (2) year

period, commencing on March 05, 2004. Upon expiration 

of the two (2) year term, employment thereafter with 

the Employer shall be on an “At Will” basis and such 

employment may be terminated by either party at any 

time within such party’s sole discretion, with or 

without notice and with or without reason or cause 

given. 

Santos Decl. Ex. 2 ¶ 3. The Court ordered supplemental briefing 

on the issue of whether the contract’s arbitration clause applied 

to claims arising after the agreement expired (Doc. # 20). Each 

party submitted a supplemental brief (Doc. ## 23-24). 

///

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II. OPINION

A. Legal Standard

The Federal Arbitration Act (“FAA”) specifies that 

arbitration provisions are valid and enforceable, representing “a 

liberal federal policy favoring arbitration, and the fundamental 

principle that arbitration is a matter of contract.” AT&T 

Mobility LLC v. Concepcion, 131 S. Ct. 1740, 14–46 (2011) 

(quotations and citations omitted). The FAA applies to 

employment contracts. Circuit City Stores, Inc. v. Adams, 532 

U.S. 105, 119 (2001). Section 4 of the FAA allows a party to an 

arbitration agreement to petition a district court for an order 

directing arbitration. 9 U.S.C. § 4. It is a basic principle of 

federal law that a party can only be compelled to arbitrate a 

dispute if he or she agreed to submit that dispute to 

arbitration. AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 

U.S. 643, 648–49 (1986). Additionally, an arbitration agreement 

is enforceable except “upon such grounds as exist at law or in 

equity for the revocation of any contract.” 9 U.S.C. § 2. An 

arbitration agreement in an employment contract must therefore be

enforced so long as the dispute at issue is within its scope and 

the savings clause in 9 U.S.C. § 2 does not apply. 

B. Discussion

1. Motion to Compel Arbitration

The applicability of Plaintiff’s employment contract to this 

dispute must be determined first. If the contract does not apply 

to disputes arising after the contract’s expiration, Defendant’s

motion must be denied.

Defendant takes the position that Plaintiff’s employment 

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guarantee may have expired in March 2006, but the arbitration 

clause along with other aspects of their agreement continued 

indefinitely. Defendant argues that the contract’s expiration 

only applied to the just cause termination provision of the 

contract, but that the remaining contractual terms remained in 

effect including the amount of Plaintiff’s salary, her job 

duties, her company provided benefits, the incorporation of the 

employee handbook, the arbitration clause, and her agreement to 

maintain confidentiality. Defendant takes the position that the 

contract continued to govern Plaintiff’s employment, with the 

only material change being that she became an “at-will” employee 

after the two year term ended. 

Plaintiff’s position is that the contract expired well 

before the claims in her lawsuit arose, and that Defendant’s 

motion should be denied as a result. Plaintiff also relies on 

several cases that deal with arbitration in the context of the 

National Labor Relations Act (“NLRA”). E.g., Litton Fin. 

Printing Div., a Div. of Litton Bus. Sys., Inc. v. NLRB, 501 U.S. 

190 (1991); Winery, Distillery & Allied Workers, Local 186 v. 

Guild Wineries & Distilleries, 812 F. Supp. 1035 (N.D. Cal. 

1993). While such cases may be persuasive on points of general 

federal law, NLRA jurisprudence is of limited application to 

Defendant’s motion because federal labor law is distinct from the 

basic state law contract principles at issue here. 

Defendant’s argument that the parties did not intend for the 

contract to terminate after two years is not credible. The 

contract clearly says that Plaintiff’s employment would continue 

on an at-will basis when the agreement expired. At-will 

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employment is defined as “[a]n employment, having no specified 

term, [which] may be terminated at the will of either party on 

notice to the other. An at-will employment may be ended by 

either party at any time without cause, for any or no reason, and 

subject to no procedure except the statutory requirement of 

notice.” Guz v. Bechtel Nat'l Inc., 24 Cal. 4th 317, 335 (2000)

(quotations omitted). All guarantees of salary and benefits in 

the original contract were obviated at the contract’s expiration 

because Defendant was free to change the terms of and conditions 

of Plaintiff’s employment at any time for any or no reason. 

There is no ambiguity in the contract’s express language; the 

agreement terminated in March 2006 and the parties’ relationship 

continued under the default employment relationship of employment 

at-will. See Fremont Indem. Co. v. Fremont Gen. Corp., 55 Cal. 

Rptr. 3d 621, 633 (Ct. App. 2007) (explaining that a contract’s 

interpretation is only disputable if the contract is reasonably 

ambiguous in its terms or shown to be reasonably ambiguous 

through extrinsic evidence). Defendant essentially argues that 

the only material term that survived the contract’s expiration 

was the arbitration portion of the parties’ agreement, but there 

is no basis for that interpretation either in the terms of the 

contract itself or in any extrinsic evidence before the court. 

Defendant next argues that even if the contract did expire 

after two years, the arbitration agreement continued to apply to 

Plaintiff’s employment. Defendant explains that arbitration 

agreements are generally enforceable and they may be extended 

orally or by implication, citing California Civil Procedure Code 

§ 1280(f). Defendant takes the position that Plaintiff’s 

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continued employment, even though it was under completely 

different contractual terms, implies that the arbitration 

agreement continued.

To support its position, Defendant first cites Jones v. Deja 

Vu, Inc., 419 F. Supp. 2d 1146, 1150 (N.D. Cal. 2005). In Jones, 

dancers at the defendant employer’s club signed contracts 

agreeing to arbitrate disputes arising from their employment. 

The Magistrate Judge in Jones held that claims arising from brief 

periods before the dancers signed the contracts or during 

intervening periods when the agreements had lapsed were still 

subject to arbitration. Id. at 1150 and 1150 n.5. Jones is 

distinguishable, however, because there is no indication that the 

dancers’ agreements dictated an at-will employment relationship 

upon expiration. With the ongoing relationship undefined, it was 

reasonable to find an implied continuation of the original 

agreement. In contrast, Plaintiff and Defendant in this case 

expressly agreed that their contract would expire and continue on 

an at-will basis. 

Defendant also relies on Ajida Technologies, Inc. v. Roos 

Instruments, Inc. for the proposition that “a party’s contractual 

duty to arbitrate disputes may survive termination of the 

agreement giving rise to that duty.” 87 Cal.App.4th 534, 545

(2001). In Ajida Technologies, however, the dispute concerned 

the interpretation of an arbitration award that stemmed from a

valid contractual agreement to arbitrate. The narrow issue 

decided by the Ajida Technologies court was whether or not the 

arbitrators exceeded the scope of the original arbitration 

agreement by extending joint ownership of certain technology for 

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five years past termination of the agreement as well as extending 

the arbitration and attorneys’ fees provision to future disputes 

related to the arbitration award itself. Id. at 544-45. The 

decision simply determined that the arbitration award arose 

directly from the original agreement to arbitrate, meaning that 

the arbitrators did not exceed the scope of their authority in 

making the award. Id. at 545. Ajida Technologies did not 

analyze a situation such as this one where a dispute unrelated to 

a contract arose after the contract expired. Ajida Technologies

is therefore not applicable to Plaintiff’s claims in the present 

suit because her claims undisputedly arose two years after the 

contract containing the arbitration clause expired. 

The only case cited by the parties that is directly 

applicable to Defendant’s motion to arbitrate is Just Film, Inc. 

v. Merch. Servs., Inc., No. C 10–1993 CW, 2011 WL 2433044, at *5 

(N.D. Cal. June 13, 2011). In that case, the district court 

analyzed a dispute that arose after a contractual arbitration 

agreement expired. The plaintiff in Just Film leased equipment 

from the defendant under a contract that required her to (1) pay 

all taxes associated with the property and (2) arbitrate all 

disputes arising from the agreement. Id. at *2. Four years 

after the plaintiff terminated her lease, the defendant 

determined that it had under collected the taxes associated with 

her account and attempted to debit her bank account for $85.50. 

Id. Because there was no evidence that the money the defendant 

attempted to debit was related to the original lease, the 

district court held that the lease’s arbitration provision did 

not apply. Id. at *5-6. 

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Like in Just Film, there is no evidence in this case that 

Plaintiff’s claims arise from her expired employment contract. 

She is not contesting the compensation she received under that 

contract or claiming that Defendant violated any provision of the 

contract. Her claims are limited to the time period after the 

contract expired when she was an at-will employee. Her claims 

therefore do not arise from the expired contract and its 

arbitration agreement does not apply to her claims. Since the 

contract’s expiration is dispositive, the Court finds it is not 

necessary to discuss the additional arguments raised by the 

parties related to enforceability and interpretation of the 

arbitration agreement generally. Defendant’s motion to compel 

arbitration is accordingly denied. 

2. Plaintiff’s Class and Representative PAGA Claims

Defendant also moves for dismissal of Plaintiff’s 

representative claims because they exceed the scope of claims 

permitted by the arbitration agreement. Based on the Court’s 

holding that the arbitration agreement does not apply to this 

suit, the arbitration agreement cannot limit Plaintiff’s 

representative claims. Defendant’s motion to dismiss these 

claims is denied. 

III. ORDER

For the foregoing reasons, Defendant’s Motion to Compel 

Arbitration and Dismiss Plaintiff’s Representative Claims is 

DENIED. 

IT IS SO ORDERED.

Dated: June 27, 2013

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