Court Opinion

ID: 4363230
Source: CourtListenerOpinion
Date Created: 2019-01-30 21:02:05.732439+00
Date Added: 2024-06-11T13:30:08.550410
License: Public Domain

Filed 1/3/19; Certified for Publication 1/30/19 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                    SECOND APPELLATE DISTRICT

                                  DIVISION SIX

ANTONIA VASQUEZ et al.,                              2d Civil No.B287696
                                                   (Super. Ct. No. 56-2017-
     Plaintiffs and Respondents,                   00498860-CU-OE-VTA)
                                                      (Ventura County)
v.

SAN MIGUEL PRODUCE,
INC.,

  Defendant, Cross-
Complainant and Appellant.

EMPLOYER’S DEPOT, INC.,

  Cross-Defendant and
Appellant.

       Respondents Antonia Vasquez and Cecilia Zacarias were
hired by appellant Employer’s Depot, Inc. (EDI), a staffing
agency. EDI was respondents’ employer when they worked on
assignment. Respondents and EDI agreed in writing to arbitrate
“all disputes that may arise within the employment context.”
       EDI assigned respondents to pack produce for appellant
San Miguel Produce, Inc. Respondents later sued San Miguel for
labor law violations. San Miguel cross-complained, blaming EDI
for causing respondents’ alleged damages. Appellants jointly
moved to compel arbitration. The trial court denied their motion.
(Code Civ. Proc., §1281.2.)
       On de novo review, we conclude that arbitration is
mandated. Appellants are co-employers with an identity of
interests and mutual responsibility for complying with state law
governing employers in the produce packing industry. It is
inconsequential that respondents chose not to name EDI as a
defendant. They agreed to arbitrate “all disputes” arising from
their employment. At all relevant times EDI was their employer.
We reverse and remand with directions to stay court proceedings
and order the parties to arbitrate their dispute.
            FACTS AND PROCEDURAL HISTORY
       EDI leases its employees on a temporary basis to other
businesses. It is responsible for paying wages for any work
performed and issuing wage statements. EDI assigned
respondents to San Miguel for one to two months, where they
worked as “packing employees.”
       Respondents filed suit against San Miguel, alleging that it
failed to pay minimum wage or overtime, failed to provide meal
and rest periods or accurate wage statements, and failed to
promptly pay wages on termination. Though they did not name
EDI, respondents allege that they “were employed jointly by [San
Miguel] and a temporary services employer.” Respondents do not
deny that EDI is their temporary services employer.
       San Miguel answered the complaint and asserted that
respondents failed to join EDI, their actual employer and an
indispensable party. San Miguel cross-complained against EDI,

                                2
seeking indemnification and alleging that EDI was responsible
for the labor law violations claimed by respondents.
       Respondents signed an arbitration agreement (Agreement).
It states, “my Temporary Employment Agency . . . and [EDI] (my
‘Worksite Employer’) and I will utilize binding arbitration to
resolve all disputes that may arise within the employment
context,” whether based on tort, contract or statute.1 Further, “I
agree that any claim, dispute, and/or controversy that either I
may have against my Worksite Employer, my Temporary
Employment Agency . . . having any relationship or connection
whatsoever with my seeking employment with, or any other
association with my Worksite Employer [or] my Temporary
Employment Agency . . . shall be submitted to and determined
exclusively by binding arbitration under the Federal Arbitration
Act (9 U.S.C. §§ 1, et seq.) in conformity with the procedures of
the California Arbitration Act . . . .” Respondents agreed that “all
claims that I may have . . . must be taken [sic] individually and
not as a plaintiff or class member in any collective action.”
       Appellants moved to compel contractual arbitration. In
opposition, respondents argued that EDI cannot compel
arbitration because it is not named as a defendant in the
complaint, and San Miguel cannot compel arbitration because it
is not a signatory to the Agreement. Appellants replied that they
can invoke the Agreement as joint employers and because San
Miguel is EDI’s agent. The trial court denied appellants’ motion
to compel.

      1 EDI’s attorney conceded that EDI is misidentified as the
“worksite employer” due to typographical error.

                                 3
                          DISCUSSION
      1. Appeal and Review
      The denial of a petition to compel arbitration is appealable.
(Code Civ. Proc., §1294, subd. (a).) Review is de novo because no
evidence was offered to interpret the Agreement and
uncontradicted declarations were submitted in support of the
motion to compel arbitration. (Gravillis v. Coldwell Banker
Residential Brokerage Co. (2006) 143 Cal.App.4th 761, 771; In re
Tobacco Cases I (2004) 124 Cal.App.4th 1095, 1105.) “Our de
novo review includes the legal determination whether and to
what extent nonsignatories to an arbitration agreement can
enforce the arbitration clause.” (DMS Services, LLC v. Superior
Court (2012) 205 Cal.App.4th 1346, 1352.)
      2. The Policy Favoring Arbitration
      California and federal law favor enforcement of arbitration
agreements. (Shearson/American Express v. McMahon (1987)
482 U.S. 220, 226; Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1,
9.) Arbitration should be ordered unless the agreement, liberally
interpreted, clearly does not apply to the dispute. We resolve any
doubts in favor of arbitration. (Vianna v. Doctors’ Management
Co. (1994) 27 Cal.App.4th 1186, 1189.)
      3. EDI Has Standing To Compel Arbitration
      Respondents do not deny their obligation to arbitrate with
EDI “all disputes that may arise within the employment context.”
Respondents were hired by EDI and paid by EDI for work they
performed while assigned to San Miguel. They allege that they
received inaccurate wage statements and were not promptly paid
when their employment ended. (Lab. Code, §§ 201, 202, 226.)
EDI alone paid respondents and issued their wage statements.
By necessity, EDI must answer for respondents’ claims of late
payment and wage statement inaccuracies.

                                4
       This dispute, in toto, arises from respondents’ employment
with EDI. Had they not been hired by EDI, respondents would
not have been assigned to San Miguel. San Miguel’s cross-
complaint alleges that respondents’ damages were caused by
EDI’s breach of its duty to pay respondents all wages due and
failure to use reasonable care in carrying out its obligations.
       EDI will be denied the benefit of the Agreement if it is
obliged to litigate a dispute arising from respondents’
employment. Respondents cannot “avoid arbitration by suing
non-signatory defendants for claims that are ‘“based on the same
facts and are inherently inseparable”’ from arbitrable claims
against signatory defendants. [Citation.]” (Metalclad Corp. v.
Ventana Environmental Organizational Partnership (2003) 109
Cal.App.4th 1705, 1713.) Looking at “‘the relationships of
persons, wrongs and issues’” (ibid), we conclude that signatory
cross-defendant EDI can compel arbitration of inseparable claims
based on the same facts alleged against San Miguel.
       4. Appellants May Jointly Enforce the Agreement
       As a rule, only a party to an arbitration agreement can
invoke it. However, an agency or similar relationship between
the nonsignatory and one of the parties to the arbitration
agreement allows enforcement by the nonsignatory. (Westra v.
Marcus & Millichap Real Estate Investment Brokerage Co., Inc.
(2005) 129 Cal.App.4th 759, 763-766 [agent of a signatory party
to an arbitration agreement may compel arbitration, even if the
agent did not sign the agreement].) Appellants’ co-employer
relationship and identity of interest with regard to their mutual
employees allows them to compel arbitration of an employment
dispute.
       The Agreement mandates that respondents arbitrate any
dispute with the “temporary employment agency” and the

                                5
“worksite employer.” EDI is misidentified in the Agreement as
the “worksite employer.” (See fn. 1, ante.) Despite the error,
respondents plead that they “were employed jointly by [San
Miguel] and a temporary services employer.” Respondents
concede that EDI is their temporary services employer and San
Miguel is their worksite employer; they made no effort to
contradict appellants’ declarations showing that they are
respondents’ co-employers.
      Respondents agree that state law governs co-employer
duties and liability. (Serrano v. Aerotek, Inc. (2018) 21
Cal.App.5th 773, 784.) Under state law, every employer is liable
for unpaid minimum wages and overtime compensation. (Lab.
Code, § 1194; Noe v. Superior Court (2015) 237 Cal.App.4th 316,
333 [“section 1194 permits an employee with multiple employers
to seek recovery of unpaid wages from any of them”].) In
California, wage and hour claims are governed by the Labor Code
and wage orders, and both have equal dignity; the courts give
“extraordinary deference” to wage orders and enforce their
specific terms. (Martinez v. Combs (2010) 49 Cal.4th 35, 61;
Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th
1004, 1026-1027; Lab. Code, § 1185.)
      We asked the parties to brief Wage Order No. 8 (Cal. Code
Regs., tit. 8, §11080), a state law relevant to co-employer duties.
Wage Order No. 8 governs “all persons employed in the
industries handling products after harvest.” (Id., subd. 1.) It
defines an employer as anyone “who directly or indirectly, or
through an agent or any other person, employs or exercises
control over the wages, hours, or working conditions of any
person.” (Id., subd. 2(F).) This definition of an employer
“reach[es] situations in which multiple entities control different
aspects of the employment relationship. This occurs, for

                                 6
example, when one entity (such as a temporary employment
agency) hires and pays a worker, and another entity supervises
the work.” (Martinez v. Combs, supra, 49 Cal.4th at p. 76.)
       An employer (a) exercises control over wages, hours, or
working conditions, or (b) suffers or permits the work, or (c)
engages the employee, creating a common law employment
relationship. (Martinez v. Combs, supra, 49 Cal.4th. at p. 64.)
The definition of “employer” is expansive because it “is intended
to preclude a business from evading the prohibitions or
responsibilities embodied in the relevant wage orders directly or
indirectly―through indifference, negligence, intentional
subterfuge, or misclassification.” (Dynamex Operations West, Inc.
v. Superior Court (2018) 4 Cal.5th 903, 961-962.) Here, both San
Miguel and EDI are the “employer.” EDI hired respondents,
assigned them to work temporarily as produce packers, paid
them, and issued their wage statements. San Miguel supervised
respondents’ work and reported their hours to EDI.
       Co-employers in the post-harvest packing industry have
concurrent duties to their employees. (Cal. Code Regs., tit. 8,
§ 11080, subds. 4(A) [“Every employer” shall pay minimum
wages], 7(A)(3) [“Every employer” shall keep accurate employee
time records], 11(A) [“No employer” will fail to comply with meal
period requirements], 12(A) [“Every employer” will permit rest
periods].) Under Wage Order No. 8, both appellants were
responsible for assuring proper payment of wages, providing meal
and rest periods and keeping accurate records.
       The courts have found that co-employers have equal
obligations to comply with laws governing wages, meals and rest
breaks. A co-employer cannot “discharge its affirmative
obligation to authorize and permit meal and rest breaks purely
through inaction.” (Benton v. Telecom Network Specialists, Inc.

                               7
(2013) 220 Cal.App.4th 701, 728-730 [citing a similar wage order
making “every employer” responsible for providing lawful meal
and rest breaks, even if the staffing agency and the worksite
employer had different policies]; Lubin v. The Wackenhut Corp.
(2016) 5 Cal.App.5th 926, 931-932, 946-947 [as the employer of
guards assigned to private and public entities, a security staffing
company had to determine if guards could take off-duty meal
breaks, even if worksite clients demanded that the guards remain
on duty during breaks].)
       The mutual relationship between co-employers is
underscored in a recent case from Division Two of this District,
Castillo v. Glenair, Inc. (2018) 23 Cal.App.5th 262. (Castillo)
The Castillos were employed and paid by GCA, a temporary
staffing company. It assigned the Castillos to work at Glenair,
which recorded their time and reported it to GCA. The Castillos
characterized GCA and Glenair as joint employers. The Castillos
sued GCA for Labor Code violations, claiming unpaid wages and
deprivation of meal and rest breaks; once those claims were
resolved, they sued Glenair for the same statutory violations.
(Id. at pp. 266-270.)
       The court in Castillo concluded that the staffing agency and
on-site employer had an agency relationship, as a matter of law.
GCA relied on Glenair to perform timekeeping tasks, providing
information that allowed GCA to pay its employees. Glenair’s
role in collecting, reviewing and providing employee time records
created a specific agency relationship. “Glenair was an agent of
GCA―specifically an agent with respect to GCA’s payment of
wages to its employees” so that a settlement with GCA barred a
second lawsuit against Glenair. (Castillo, supra, 23 Cal.App.5th
at pp. 281-282.)

                                8
       The Agreement encompasses any disputes respondents
have with the temporary employment agency and the worksite
employer. If the Agreement misidentified EDI as the “worksite
employer,” respondents have disregarded the error by pleading
that they were jointly employed by San Miguel “and a temporary
services employer,” meaning EDI. By acknowledging that they
worked for San Miguel (the worksite employer) and a temporary
services employer (EDI), it is within respondents’ reasonable
expectations that the Agreement applies to both of the
appellants. Appellants are both responsible under state law for
ensuring compliance with the wage and hour laws that
respondents claim were violated. Under Castillo, San Miguel
served as EDI’s agent, collecting and providing employee records
so that respondents could be paid. As a result, appellants may
invoke the Agreement and compel arbitration.
       A like result was reached in Garcia v. Pexco, LLC (2017)
11 Cal.App.5th 782. Garcia had an arbitration agreement with
his employer, Real Time Staffing Services. He sued Real Time
and a worksite employer, Pexco, for labor law violations. (Id. at
pp. 784-785.) The court concluded that nonsignatory Pexco could
compel arbitration because “all of Garcia’s claims are intimately
founded in and intertwined with his employment relationship
with Real Time,” with whom he agreed to arbitrate “any dispute.”
(Id. at p. 787.) Otherwise stated, “Garcia’s claims against Pexco
are rooted in his employment relationship with Real Time . . . .”
(Ibid.) Notably, “Garcia agreed to arbitrate his wage and hour
claims against his employer, and Garcia alleges Pexco and Real
Time were his joint employers.” (Id. at 788.) As joint employers,
Pexco and Real Time were agents of each other in their dealings
with Garcia. (Ibid.)

                                9
       In our case, like Garcia, respondents’ claims against
nonsignatory San Miguel are rooted in their employment
relationship with signatory EDI, and the complaint alleges that
the two are joint employers. Unlike Garcia, respondents did not
sue the staffing agency. However, that is a distinction without a
difference because EDI is a party to this litigation; appellants are
equally responsible for complying with wage and hour laws; and
this entire dispute arose from respondents’ employment with
EDI, which must ensure lawful work breaks when its employees
are assigned to a client such as San Miguel. (Lubin v. The
Wackenhut Corp., supra, 5 Cal.App.5th at pp. 946-947.) This
lawsuit falls within the Agreement because it is a dispute, claim
or controversy that arises from respondents’ employment.
                           DISPOSITION
       The order denying the petition to compel arbitration is
reversed. The trial court is directed to stay this litigation and
order the parties to arbitrate their dispute. Appellants are
entitled to recover their costs on appeal.

                                      PERREN, J.

We concur:

      GILBERT, P. J.

      TANGEMAN, J.

                                 10
                   Vincent J. O'Neill, Judge

              Superior Court County of Ventura
               ______________________________

      Karasik Law Firm and Gregory N. Karasik; Law Offices of
Santos Gomez, Santos Gomez and Maria Esmeralda Vissuzi for
Plaintiffs and Respondents.
      Lothorp Richards McMillan Miller & Templeman and
Darin Marx for Defendant, Cross-Complainant and Appellant
San Miguel Produce, Inc.
      LightGabler and Jonathan Fraser Light for Cross-
Defendant and Appellant Employer’s Depot, Inc.

                              11
Filed 1/30/19
                     CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                     SECOND APPELLATE DISTRICT

                               DIVISION SIX

ANTONIA VASQUEZ et al.,                              2d Civil No.B287696
                                              (Super. Ct. No. 56-2017-00498860-
     Plaintiffs and Respondents,                         CU-OE-VTA)
                                                       (Ventura County)
v.
                                              ORDER CERTIFYING OPINION
SAN MIGUEL PRODUCE, INC.,                         FOR PUBLICATION
                                              [NO CHANGE IN JUDGMENT]
  Defendant, Cross-complainant and
Appellant;

EMPLOYER’S DEPOT, INC.,

     Cross-defendant and Appellant.

THE COURT :
                 *

      The opinion in the above-entitled matter filed on January
3, 2019, was not certified for publication in the Official Reports.
For good cause it now appears that the opinion should be
published in the Official Reports and it is so ordered.

*
    PERREN, J., GILBERT, P.J., TANGEMAN, J.