Court Opinion

ID: 9901993
Source: CourtListenerOpinion
Date Created: 2023-11-22 20:01:53.776536+00
Date Added: 2024-06-11T09:21:42.749720
License: Public Domain

Filed 11/22/23

                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                           DIVISION SIX

 STATE OF CALIFORNIA ex                2d Civil No. B327137
 rel. EDGAR CISNEROS,               (Super. Ct. No., 20CV-0095)
                                     (San Luis Obispo County)
      Plaintiff and Respondent,

 v.

 ALCO HARVEST, INC., et al.,

   Defendants and Appellants.
 _____________________________

 JESUS GUZMAN,                      (Super. Ct. No. 21CV00299)
                                      (Santa Barbara County)
      Plaintiff and Respondent,

 v.

 ALCO HARVESTING LLC et
 al.,

      Defendants and Appellants.
LILIA GARCIA-BROWER, as                (Super. Ct. No. 21CV02855)
Labor Commissioner, etc., et             (Santa Barbara County)
al.,

     Plaintiffs and Respondents,

v.

ALCO HARVESTING LLC et
al.,

     Defendants and Appellants.

      The H-2A Temporary Agricultural Program allows
employers to recruit foreign agricultural workers when the
domestic labor market cannot meet employers’ needs. The
United States Department of Labor (DOL) must certify an
employer’s participation in the H-2A program. This process
requires the employer, among other things, to submit a “job
order” describing “the material terms and conditions” of the jobs
for which it seeks foreign workers.
      Plaintiff and respondent Jesus Guzman is a foreign worker
hired by defendant and appellant Alco Harvesting LLC to work
at farms owned by defendant and appellant Betteravia Farms.1
He later brought employment claims against appellants. Alco
moved to compel arbitration pursuant to an arbitration
agreement presented to and signed by Guzman at his orientation.
The trial court found the agreement void and denied the motion.

       1 We refer to appellants Betteravia Farms LLC, Betteravia

Investments LLC, Bonita Packing Co., and Grubstake
Investments LLC collectively as “Betteravia Farms.”

                                   2
It considered arbitration a “material term and condition” of
Guzman’s employment, and as such, a job requirement that Alco
should have disclosed during the H-2A certification process.
       We affirm.
         FACTUAL AND PROCEDURAL BACKGROUND
       Betteravia contracted with Alco to provide labor services
for its produce farms. Guzman is a citizen of Mexico recruited
and hired by Alco under the H-2A program. He entered the
United States under an H-2A work visa in early 2020 and worked
for two growing seasons at Betteravia farms in Yuma, Arizona
and Santa Maria, California. Guzman returned to Mexico in July
when he contracted COVID-19.
       Guzman filed this action asserting individual employment
claims and a Private Attorney General Act (PAGA) claim. The
Labor Commissioner filed an enforcement action arising from the
same alleged violations. The trial court consolidated the cases for
all purposes at the request of the Labor Commissioner.2
       Alco moved to compel arbitration of Guzman’s claims
pursuant to a written agreement he and other workers signed in
Mexico during their orientation. The trial court denied the
motion. It noted Alco had not listed mandatory arbitration as one
of the material terms of employment when it sought DOL
certification to hire Guzman and other temporary workers under
the H-2A program. This violated federal regulations requiring

      2 The trial court consolidated these with a third action filed

by respondent Edgar Cisneros. Cisneros later agreed to dismiss
all his claims except those brought under PAGA. Alco and
Betteravia seek no relief as to Cisneros in this appeal. Cisneros
requests we affirm the trial court but does not address the merits
of the appeal in his brief.

                                 3
disclosure of such terms and prevented Alco and Betteravia from
enforcing any subsequent arbitration agreement imposed on the
workers. The trial court also denied their request to stay the
Labor Commissioner’s action pending arbitration.3 Alco and
Betteravia appeal both orders.
                            DISCUSSION
                         Standard of Review
       The trial court found the arbitration agreement violated
federal regulations as a matter of law. We review de novo
whether Guzman must arbitrate his claims. (See Mendez v. Mid-
Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541
[“‘Ordinarily, we review a denial of a petition to compel
arbitration for abuse of discretion. [Citation.] However, where
the trial court’s denial of a petition to arbitrate presents a pure
question of law, we review the order de novo.’”].)
               H-2A Temporary Agricultural Program
       The H-2A program allows employers in the agricultural
sector to hire temporary foreign workers when “there are not
sufficient [domestic] workers who are able, willing, and qualified,
and who will be available at the time and place needed, to
perform the labor or services.” (8 U.S.C. § 1188(a)(1)(A); 20
C.F.R. § 655.100(a)(1)(i).) An employer must seek certification
from DOL before it can recruit H-2A foreign workers.
       The employer first submits Form ETA-790/790A, called a
“Job Order.” (20 C.F.R. § 655.121(a).) DOL’s implementing
regulations define a “Job Order” as “[t]he document containing

      3 The Labor Commissioner moved this Court to dismiss

Alco’s and Betteravia’s appeal of the order denying their stay
request, arguing the ruling was not a separately appealable
order. We denied the motion in our order dated October 3, 2023.
(Code Civ. Proc., § 1294.2.)

                                 4
the material terms and conditions of employment that is posted
by the State Workforce Agency (SWA) on its interstate and
intrastate job clearance systems based on the employer’s
Agricultural Clearance Order (Form ETA-790/ETA-790A and all
appropriate addenda).” (20 C.F.R. § 655.103(b), italics added.)
Any Job Order submitted to DOL by an employer must contain
the following language: “This clearance order describes the
actual terms and conditions of the employment being offered by
me and contains all the material terms and conditions of the job.”
(Id., § 653.501(c)(3)(viii).)
       DOL transmits the Job Order to the State Workforce
Agency (SWA) of each state in which the employer intends to use
the workers. (20 C.F.R. § 655.150(a).) SWA places approved
orders into a publicly accessible clearance system that domestic
workers can use to apply for posted job openings. (Id.,
§ 655.121(f), (g).) Orders so posted are called “Clearance Orders.”
Employers must try to recruit from the domestic labor market
and hire any “qualified, eligible U.S. worker who applies . . . until
50 percent of the period of the work contract has elapsed.” (Id.,
§ 655.135(c), (d).)
       The employer next submits a completed Form ETA-9142A,
called an “Application for Temporary Employment Certification”
(Application), along with “all supporting documentation and
information.” (20 C.F.R. § 655.130(a).) This must include a copy
of the completed Job Order. (Ibid.) DOL reviews the Application
together with the Job Order and notifies the applicant of any
deficiencies. (Id., §§ 655.140(a), 655.141.) It must grant or deny
the Application “not later than 30 calendar days before the first
date of need” for workers. (Id., § 655.160.) DOL forwards
certified Applications and Job Orders to United States
Citizenship and Immigration Services. (Id., § 655.162.)

                                  5
Employers may then hire and admit foreign workers into the
country on H-2A visas. (Id., § 655.130.)
                  Validity of Arbitration Agreement
       Alco and Betteravia contend the arbitration agreement
signed by Guzman is enforceable under the Federal Arbitration
Act and California law. They analogize this case to Martinez-
Gonzalez v. Elkhorn Packing Co. (9th Cir. 2022) 25 F.4th 613
(Elkhorn), which compelled a worker to arbitrate even though his
employer did not submit the arbitration agreement or its terms
during the H-2A certification process. Alco and Betteravia
request that we reverse the appealed orders and remand the case
with directions to enter an order compelling Guzman’s individual
and PAGA claims to arbitration. We conclude the trial court
properly declined to enforce the agreement.
       The question on appeal is not, as Alco and Betteravia
contend, “whether an H-2A employee may be compelled to
arbitration.” There are instead two questions: (1) whether
mandatory arbitration was a “material term or condition” of
Guzman’s employment with Alco; and (2) if so, whether Alco
disclosed this requirement in its H-2A certifications submissions
to DOL. We answer “yes” to the first, and “no” to the second.
       Alco’s arbitration agreement required Guzman to forfeit his
right to a jury trial in “any claim, dispute and/or controversy that
[any] Employee may have against the Company . . . arising from,
relating to or having any relationship or connection whatsoever
with [or to the] Employee’s . . . employment by, or other
association with the Company . . . .” The arbitration agreement
also prohibited him from participating in any class action claims
against Alco. We consider the relinquishing of these rights as
“material terms and conditions” of his employment. (See, e.g.,
Lawrence v. Walzer & Gabrielson (1989) 207 Cal.App.3d 1501,

                                 6
1507, quoting Main v. Merrill Lynch, Pierce, Fenner & Smith, Inc.
(1977) 67 Cal.App.3d 19, 31 [“‘[The] right to select a judicial
forum, vis-a-vis arbitration, is a ‘“substantial right,”’ not lightly
to be deemed waived. [Citations.]’”].)
       We next turn to whether Alco disclosed these terms and
conditions during H-2A certification. The Job Orders submitted
to DOL have lengthy addenda describing such things as work
experience and physical requirements, the grounds for
terminating a worker, training and production standards, and
reimbursement of transportation costs. Alco’s general manager,
Jeremy MacKenzie, attested that the Yuma and Santa Maria Job
Orders “describe[d] the actual terms and conditions of the
employment being offered by me and contain[ed] all the material
terms and conditions of the job.” Its submissions mention
nothing, however, about workers signing a separate, all-
encompassing arbitration agreement when they reported to
orientation. The agreement is thus unlawful and unenforceable.
(See Sheppard, Mullin, Richter & Hampton, LLP v. J-M
Manufacturing Co., Inc. (2018) 6 Cal.5th 59, 73, quoting Civ.
Code, § 1667 [“a contract is unlawful, and therefore
unenforceable, if it is ‘[c]ontrary to an express provision of law’ or
‘[c]ontrary to the policy of express law, though not expressly
prohibited’”].)
       We do not find Elkhorn controlling or persuasive. The
plaintiff-employee in that case challenged his employer’s
arbitration agreement as the product of undue influence and
economic duress. The Ninth Circuit had no occasion to answer
the questions presented here. “‘[C]ases are not authority for
propositions not considered.’” (American Federation of Labor v.
Unemployment Ins. Appeals Bd. (1996) 13 Cal.4th 1017, 1039;
B.B. v. County of Los Angeles (2020) 10 Cal.5th 1, 11.)

                                  7
                    Requests to Dismiss and Stay
       Alco and Betteravia request we direct the trial court to stay
the Labor Commissioner’s action and to stay or dismiss Guzman’s
non-individual claims pending arbitration. Our affirming the
trial court’s decision renders these requests moot. A recent
amendment to the Labor Code limiting the effect of arbitration
agreements to DOL enforcement actions is likewise irrelevant to
this appeal.4
                           DISPOSITION
       Judgment is affirmed. Respondents shall recover their
costs on appeal.
       CERTIFIED FOR PUBLICATION.

                                     CODY, J.

We concur:

      GILBERT, P. J.                 BALTODANO, J.

      4 While this appeal was pending, Assembly Bill No. 594

(2023-2024 Reg. Sess.) § 2 added section 182 to the Labor Code,
which states: “In any action initiated by a public prosecutor or
the Labor Commissioner to enforce this code, any individual
agreement between a worker and employer that purports to limit
representative actions or to mandate private arbitration shall
have no effect on the authority of the public prosecutor or the
Labor Commissioner to enforce the code.”

                                 8
                  Timothy J. Staffel, Judge
           Superior Court County of Santa Barbara
      ________________________________________________

     Fisher & Phillips, Alden J. Parker, Rebecca Hause-Schultz,
and Heather M. Domingo, for Defendants and Appellants Alco
Harvesting, LLC, Betteravia Farms LLC, Betteravia Investments
LLC, Bonita Packing Co., and Grubstake Investments LLC.
     Workworld Law, Ruben Escobedo III, for Plaintiff and
Respondent Edgar Cisneros.
     California Rural Legal Assistance, Inc., Corrie L. Meals,
Sandra Aguila, Ana Vicente de Castro, and Dennise Silva;
Dawson Morton for Plaintiff and Respondent Jesus Guzman.
     Division of Labor Standards Enforcement, Alec Segarich
and Anel Flores, for Plaintiff and Respondent Lilia Garcia-
Brower, Labor Commissioner.

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