UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

DESIDERO SOTO, ET AL.,

Plaintiffs,

v.

O.C. COMMUNICATIONS, INC., et al.,

Defendants.

Case No. 17-cv-00251-VC 

ORDER RE MOTIONS TO COMPEL 

ARBITRATION

Re: Dkt. Nos. 259, 261

The claims of the plaintiffs whose employment is covered by the 2013, 2015, and 2017 

agreements are compelled to arbitration. Both O.C. Communications and Comcast are entitled to 

compel arbitration with these plaintiffs. 

The plaintiffs argue that OCC waived the right to compel arbitration because it did not 

seek to stay the case while the Supreme Court considered Epic Systems Corp. v. Lewis, 138 S.

Ct. 1612 (2018). Although the right to compel arbitration can be waived, “any party arguing 

waiver of arbitration bears a heavy burden of proof.” Martin v. Yasuda, 829 F.3d 1118, 1124 (9th 

Cir. 2016) (quoting Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986)). To

establish waiver, the plaintiffs must prove: (1) OCC had “knowledge of an existing right to 

compel arbitration;” (2) OCC “act[ed] inconsistent with that existing right; and (3) this

prejudiced the plaintiffs. Id. The plaintiffs make a strong case on the second and third factors, but 

they ultimately lose on the first: The defendants did not have an “existing” right to compel 

individual arbitration until the Supreme Court decided Epic Systems. 138 S. Ct. at 1619. Before 

then, the Ninth Circuit rule was that the National Labor Relations Act forbade employers from 

requiring workers to sign away their rights to seek concerted legal claims regarding employment 

conditions. Morris v. Ernst & Young, LLP, 834 F.3d 975, 990 (9th Cir. 2016), overruled by Epic 
2

Systems, 138 S. Ct. at 1632. Under that rule, a motion to compel individual arbitration in this 

case would have been futile.

It’s true, as the plaintiffs point out, that diligent lawyers throughout the circuit filed 

requests to stay employment lawsuits while Epic Systems was pending. And many such requests 

were granted. See Plaintiffs’ Letter Brief, Dkt. No. 269; see, e.g., Rowland v. CarMax Auto 

Superstores California, LLC, No. 2:16-cv-02135-VGC, 2017 WL 527900 (E.D. Cal. Feb. 8, 

2017). Had OCC sought a stay here, and had the request been granted, this would have saved 

OCC and the plaintiffs precious time and resources. Perhaps it would be appropriate to sanction 

OCC and its lawyers for putting the plaintiffs through this trouble, particularly given the 

intransigent conduct of OCC and its lawyers during discovery. But on the issue of waiver, the 

Ninth Circuit rule requires that the defendant have knowledge of an “existing” right, not an 

impending one. Nor, to the extent this is relevant, did OCC have knowledge of an existing right 

to a stay pending the Supreme Court’s decision.

As for Comcast, it is a third-party beneficiary of the 2015 and 2017 agreements, so it may 

compel arbitration with the plaintiffs covered by those agreements. See Murphy v. DirecTV, Inc., 

724 F.3d 1218, 1233 (9th Cir. 2013) (recognizing arbitration agreements can be enforced by 

third-party beneficiaries under California law). It may also compel arbitration with the plaintiffs 

covered by the 2013 agreement. Although Comcast is not a third-party beneficiary of that 

agreement, the entire basis for the plaintiffs’ claims against Comcast is that OCC is its agent. If 

that’s not true, it means there is no claim against Comcast. If it is true, it means Comcast may 

enforce the arbitration agreement under the agency exception. See Garcia v. Pexco, LLC, 11 Cal. 

App. 5th 782, 788 (2017).

The parties’ briefing regarding the 2004 agreement is inadequate to reach a decision 

about whether the plaintiffs covered by that agreement should be compelled to arbitration. For 

example, the parties do not address the argument that OCC’s right to compel arbitration under 

that agreement was not affected by the Epic Systems decision and was therefore waived. There’s 

a possibility that the Supreme Court’s pending decision in Lamps Plus, Inc. v. Varela, 138 S. Ct. 
3

1697 (2018), will shed light on how the agreement should be construed regarding collective 

action arbitration, but the parties have not adequately discussed this issue. For its part, Comcast, 

as an agent of OCC, would presumably be stuck with OCC’s waiver of its rights to compel under 

the 2004 Agreement unless it can establish an independent right to enforce the agreement on an 

equitable estoppel theory. Comcast may have such an argument in light of Garcia, but there is 

some doubt that the California Supreme Court would uphold that aspect of the Garcia ruling.1

See 11 Cal. App. 5th at 787-88. Because these issues have not been adequately addressed, the 

motion to compel arbitration as to these plaintiffs is denied, without prejudice to filing a renewed 

motion to compel.

The defendants’ motion to stay the PAGA claims is denied for the reasons stated on the 

record.

A further case management conference is scheduled for January 15, 2019. A Case 

Management Statement is due by January 8, 2019.

IT IS SO ORDERED.

sDated: November 21, 2018

______________________________________

VINCE CHHABRIA

United States District Judge

 

1 Garcia’s interpretation of the equitable estoppel exception may be inconsistent with traditional 

notions of equitable estoppel and other California Court of Appeal cases. See Jones v. Jacobson, 

195 Cal. App. 4th 1, 20 (2011) (“[T]he very purposes of the doctrine [are] to prevent a party 

from using the terms or obligations of an agreement as the basis of his claims against a 

nonsignatory, while at the same time refusing to arbitrate with the nonsignatory under another 

clause of the same agreement.”); Goldman v. KPMG LLP, 173 Cal. App. 4th 209, 229-30 (2009) 

(“[E]quitable estoppel applies only if the plaintiffs’ claims against the nonsignatory are 

dependent upon, or inextricably bound up with, the obligations imposed by the contract plaintiff 

has signed with the signatory defendant.”). Garcia also may erroneously equate the standard for 

arbitrability with the standard for determining whether a plaintiff’s claims are sufficiently bound 

up with the contract to warrant application of equitable estoppel. See Garcia, 11 Cal. App. 5th at 

786.