Court Opinion

ID: 9840951
Source: CourtListenerOpinion
Date Created: 2023-09-20 20:04:50.91913+00
Date Added: 2024-06-11T08:38:42.168576
License: Public Domain

Filed 9/20/23 Shakespeare v. National Steel and Shipbuilding Co. CA4/1
                   NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

                 COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                       DIVISION ONE

                                              STATE OF CALIFORNIA

ARCHIE SHAKESPEARE,                                                          D081270

          Plaintiff and Respondent,

          v.                                                                 (Super. Ct. No. 37-2021-
                                                                             00013962-CU-OE-CTL)
NATIONAL STEEL AND
SHIPBUILDING COMPANY,

          Defendant and Appellant.

          APPEAL from an order of the Superior Court of San Diego County,
Katherine A. Bacal, Judge. Affirmed.
          Quarles & Brady, E. Joseph Connaughton, Evan A. Peña, and Kelly E.
Kagan for Defendant and Appellant.
          Peter R. Dion-Kindem; The Blanchard Law Group and Lonnie C.
Blanchard, III for Plaintiff and Respondent.

                                                                    I
                                                     INTRODUCTION
          National Steel and Shipbuilding Company (NASSCO) appeals an order
denying its petition to compel arbitration of a wage and hour complaint
brought by its alleged former employee Archie Shakespeare. The trial court
denied the petition on grounds that NASSCO failed to establish the existence
of an arbitration agreement between NASSCO and Shakespeare. We affirm.
                                      II
                               BACKGROUND
      Shakespeare filed the operative complaint against his putative former
employers, NASSCO and Ameri-Force Craft Services, Inc. (Ameri-Force). In
relevant part, he alleged NASSCO violated wage and overtime laws by failing
to pay its non-exempt employees for time spent going through workplace
security checkpoints, donning and doffing personal protective equipment,
having their temperatures checked, and traveling between security
checkpoints and their workplace sites. Further, he alleged NASSCO failed to
pay wages due on termination, violated wage statement laws, and violated
the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.). He filed his
claims on an individual basis, on behalf of a putative class of non-exempt
NASSCO employees, and on a representative basis under the Private
Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA).
      NASSCO petitioned to compel arbitration of the case. It argued that it
entered into collective bargaining agreements (CBAs) with two labor unions
that represent most of the non-exempt employees Shakespeare seeks to
represent on a class or representative basis. The CBAs govern the terms of
employment for unionized employees on matters such as hours, wages, and
overtime. All of the CBAs provide that disputes concerning the
interpretation or application of the CBAs may be referred to arbitration if the
disputes are not resolved through an internal grievance procedure. Some of
the CBAs state that NASSCO and its unionized employees must arbitrate

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any “claims arising out of employment,” including wage and hour claims, on
an individual basis.
      Shakespeare opposed the petition to compel arbitration. He argued
that NASSCO failed to establish that he accepted, or was otherwise bound
by, an arbitration agreement. In particular, he claimed he never signed, and
was not subject to, the CBAs executed by NASSCO and the labor unions.
      NASSCO filed a reply in support of its arbitration petition. It did not
argue that Shakespeare accepted, or was otherwise bound by, its CBAs. On
the contrary, it claimed Shakespeare was never a NASSCO employee and,
therefore, he was never a member of the labor unions that executed the CBAs
on behalf of their members. According to NASSCO, Shakespeare was an
employee of codefendant Ameri-Force, a staffing agency that purportedly
dispatched Shakespeare to work for NASSCO on a temporary basis.
      The trial court denied the petition to compel arbitration. It found
NASSCO did not “put forth any evidence to show that [Shakespeare] entered
any agreement to arbitrate his dispute. Nor did NASSCO show in its moving
papers that some other theory or doctrine warrant[ed] concluding that any of
the arbitration provisions in the CBAs would apply to [Shakespeare], an
alleged non-represented employee.”

      NASSCO appeals the order denying its petition to compel arbitration.1
                                      III
                                DISCUSSION
      “ ‘ “[T]he threshold question presented by a petition to compel
arbitration is whether there is an agreement to arbitrate.” ’ [Citation.] While
both the Federal Arbitration Act (9 U.S.C. § 1 et seq.; the FAA) and

1     The trial court also denied a request from NASSCO to strike the class
and representative allegations from Shakespeare’s complaint. NASSCO does
not challenge this ruling in this appeal.
                                       3
California law favor arbitration, a party is not required to arbitrate his or her
claims absent consent.” (Costa v. Road Runner Sports, Inc. (2022) 84
Cal.App.5th 224, 233; see Sandquist v. Lebo Automotive, Inc. (2016) 1 Cal.5th
233, 252 [“[B]ecause ‘[a]rbitration is strictly “a matter of consent” ’ [citations],
‘ “a party cannot be required to submit to an arbitration any dispute which he
has not agreed so to submit” ’ ”].) “ ‘ “The party seeking to compel arbitration
bears the burden of proving the existence of a valid arbitration agreement.” ’ ”
(Kinder v. Capistrano Beach Care Center, LLC (2023) 91 Cal.App.5th 804,
811.)
        “ ‘[W]e apply general California contract law to determine whether the
parties formed a valid agreement to arbitrate their dispute.’ ” (Ford Motor
Warranty Cases (2023) 89 Cal.App.5th 1324, 1331.) But, where the formation
or revocability of an arbitration agreement are not at issue—and the
pertinent question is who may or must submit to arbitration pursuant to an
otherwise valid arbitration agreement—federal law applies. (Metalclad Corp.
v. Ventana Environmental Organizational Partnership (2003) 109
Cal.App.4th 1705, 1712–1713 (Metalclad); see also International Paper Co. v.
Schwabedissen Maschinen & Anlagen GMBH (4th Cir. 2000) 206 F.3d 411,
416–417, fn. 4 (Schwabedissen) [“Because the determination of whether ... a
nonsignatory, is bound by the [arbitration agreement] presents no state law
question of contract formation or validity, we look to the ‘federal substantive
law of arbitrability’ to resolve this question.”].)
        “ ‘Because arbitration is a matter of contract, generally “ ‘one must be a
party to an arbitration agreement to be bound by it or invoke it.’ ” ’
[Citation.] ‘However, both California and federal courts have recognized
limited exceptions to this rule, allowing nonsignatories to an agreement
containing an arbitration clause to compel arbitration of, or be compelled to

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arbitrate, a dispute arising within the scope of that agreement.’ ” (People v.
Maplebear, Inc. (2022) 81 Cal.App.5th 923, 931, italics added; see also Jones
v. Jacobson (2011) 195 Cal.App.4th 1, 17 (Jones) [“with limited exceptions
only parties to an arbitration agreement can enforce it or be required to
arbitrate”].) “ ‘ “ ‘As one authority has stated, there are six theories by which
a nonsignatory may be bound to arbitrate: “(a) incorporation by reference;
(b) assumption; (c) agency; (d) veil-piercing or alter ego; (e) estoppel; and
(f) third-party beneficiary.” ’ ” ’ ” (Maplebear, at pp. 931–932.)
      The parties agree Shakespeare did not personally execute the CBAs
containing the arbitration provisions NASSCO seeks to enforce. Further,
they agree Shakespeare was not a unionized NASSCO employee represented
by the labor unions that executed the CBAs. Thus, it is uncontested
Shakespeare never consented to the arbitration provisions in the CBAs and
no other entity purported to do so on his behalf or for his benefit.
      Nonetheless, NASSCO argues Shakespeare must submit to arbitration
based on an equitable estoppel theory. NASSCO argues Shakespeare is
estopped from asserting that the CBAs cannot be enforced against him
because he has accepted the benefits of the CBAs. In particular, NASSCO
asserts he has benefitted from the CBAs because, as part of the current
lawsuit, he has filed potentially lucrative putative class and representative
claims on behalf of unionized employees who are subject to the CBAs.
Alternatively, NASSCO argues he benefitted by working at a NASSCO
worksite, a “largely unionized job site” governed by the CBAs. We reject
NASSCO’s estoppel argument.
      As an initial matter, NASSCO forfeited its estoppel argument by failing
to present it to the trial court for its consideration in the first instance. “ ‘[I]t
is fundamental that a reviewing court will ordinarily not consider claims

                                          5
made for the first time on appeal which could have been but were not
presented to the trial court.’ ” (Perez v. Grajales (2008) 169 Cal.App.4th 580,
591; see, e.g., Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243
Cal.App.4th 1, 9 [appellant forfeited claim that nonsignatory could not
enforce arbitration agreement]; Jones, supra, 195 Cal.App.4th at p. 19, fn. 12
[appellants forfeited claim they were entitled to enforce arbitration
agreement under agency theory by not presenting it to trial court].)
      NASSCO urges us to exercise our discretion and excuse its failure to
present its estoppel argument below. “[T]he appellate court’s discretion to
excuse forfeiture should be exercised rarely and only in cases presenting an
important legal issue.” (In re Marriage of Elali & Marchoud (2022) 79
Cal.App.5th 668, 682.) This case is not the rare case in which it is
appropriate for us to excuse forfeiture. NASSCO’s claim—that Shakespeare
is estopped from opposing enforcement of the arbitration provisions in the
CBAs because he has benefitted from the CBAs—is not a pure legal issue, but
rather an argument that requires consideration of factual issues including
the extent to which Shakespeare has in fact benefitted from the CBAs. (See
Driscoll v. City of Los Angeles (1967) 67 Cal.2d 297, 305 [“The existence of an
estoppel is generally a question of fact for the trial court whose determination
is conclusive on appeal unless the opposite conclusion is the only one that can
be reasonably drawn from the evidence.”].) Moreover, the appeal does not
present an important legal issue warranting our exercise of discretion.
      Forfeiture aside, NASSCO’s estoppel argument is unconvincing on the
merits. To support its estoppel argument, NASSCO invokes legal standards
discussed in federal decisional law, primarily Schwabedissen, supra, 206 F.3d
411. In that case, a lower federal court determined a nonsignatory to an
arbitration agreement may be estopped from refusing to comply with the

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arbitration agreement when the nonsignatory has “ ‘receive[d] a “direct
benefit” from [the] contract containing [the] arbitration clause.’ ” (Id. at
p. 418; ibid. [“In the arbitration context, the [estoppel] doctrine recognizes
that a party may be estopped from asserting that the lack of his signature on
a written contract precludes enforcement of the contract’s arbitration clause
when he has consistently maintained that other provisions of the same
contract should be enforced to benefit him.”]; see also Metalclad, supra, 109
Cal.App.4th at p. 1713 [“a party who has not signed a contract containing an
arbitration clause may nonetheless be compelled to arbitrate when he seeks
enforcement of other provisions of the same contract that benefit him”].)
      According to NASSCO, Shakespeare is benefitting from the CBAs—and
is estopped from resisting enforcement of their arbitration provisions—
because he is pursuing potentially profitable class and representative causes
of action on behalf of employees whose terms of employment are governed by
the CBAs. But, as Shakespeare correctly notes, his causes of action do not
seek to secure benefits or effectuate rights guaranteed by the CBAs. Rather,
they allege extra-contractual violations of state wage and hour laws. Thus, to
the extent Shakespeare might obtain any benefit from his putative class and
representative causes of action, it is state law that would supply the benefit—
not the CBAs. (See Young v. Horizon West, Inc. (2013) 220 Cal.App.4th 1122,
1131 [nonsignatory could not be compelled into arbitration under estoppel
theory, in part, because nonsignatory sued signatory for “noncontractual
injury,” not to recover benefits under contract with arbitration provisions];
see also InterGen N.V. v. Grina (1st Cir. 2003) 344 F.3d 134, 145–146
[nonsignatory could not be compelled to arbitration because it did not seek
damages under contract containing arbitration provisions; rather, it sought
recovery for signatory’s “extra-contractual assurances”].)

                                        7
      In the alternative, NASSCO argues Shakespeare benefitted from the
CBAs because he purportedly worked “at a job site where [the] CBAs set the
terms of employment for almost everyone around him.” Perhaps because
NASSCO did not present its estoppel argument to the trial court in the first
instance, there is nothing in the appellate record to support NASSCO’s
unfounded claims about where Shakespeare worked, with whom he worked,
and the CBAs that might have governed those particular coworkers’ terms of
employment. For this reason alone, the argument fails. But even if the
appellate record supported NASSCO’s argument, we would reject it. “ ‘[Case
law] consistently requires a direct benefit under the contract containing an
arbitration clause before a reluctant party can be forced into arbitration.’ ”
(Crowley Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158
Cal.App.4th 1061, 1070–1071.) Here, the claimed benefit—working in
proximity to employees who benefitted from the CBAs—is far too attenuated
to compel a nonsignatory like Shakespeare into arbitration.
      We offer a brief observation in closing. Throughout its appellate briefs,
NASSCO vigorously claims Shakespeare should not “be allowed” to pursue
causes of action on behalf of NASSCO employees generally, let alone those
subject to CBAs, because he was never a NASSCO employee. This argument
potentially might be relevant when the trial court decides whether class
certification is warranted for Shakespeare’s causes of action—at which point
the court must decide, among other things, whether a well-defined
community of interest exists. (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th
955, 968.) It may also be pertinent to whether Shakespeare is an “aggrieved
employee” with standing to bring a PAGA cause of action on behalf of himself
and “other current or former employees.” (Lab. Code, § 2699, subd. (a).) But
it is plainly irrelevant to the current proceeding, which concerns the

                                        8
straightforward question of whether a signatory to an arbitration agreement
(NASSCO) may require a nonsignatory to the agreement (Shakespeare) to
submit his claims to arbitration. Under the facts presented here, the answer

to that question is no.2
                                       IV
                                DISPOSITION
      The order denying the petition to compel arbitration is affirmed.
Respondent is entitled to his appellate costs.

                                                           McCONNELL, P. J.

WE CONCUR:

IRION, J.

DO, J.

2     Shakespeare filed a motion for monetary sanctions against NASSCO
and/or its legal counsel arguing that the present appeal is frivolous. (See In
re Marriage of Flaherty (1982) 31 Cal.3d 637, 649–651.) Although we side
with Shakespeare on the merits, we conclude the appeal is not so totally and
completely devoid of merit that it constitutes a frivolous appeal. Accordingly,
we deny the sanctions motion.
                                       9