Grabowski v. C.H. Robinson Co.
2011 U.S. Dist. LEXIS 105680
S.D. Cal.2011Background
- Plaintiff Grabowski sues Defendants for misclassification and related wage-and-hour claims under California and federal law, on behalf of a putative class/collective.
- Plaintiff alleges Defendants improperly classified him as exempt and unpaid overtime, along with related wage-statement and PAGA claims.
- Plaintiff entered into multiple Bonus Incentive Agreements containing a dispute-resolution clause demanding arbitration on an individual basis and waiving class/collective actions.
- The 2007–2010 agreements reference AAA arbitration, with carve-outs and other terms, and the signatures occurred before and after Concepcion was decided.
- Defendants move to compel arbitration under the FAA, seeking dismissal or stay, arguing the agreements are valid and encompass the disputes.
- The court evaluates waiver, FAA applicability, NLRA §7, California Labor Code §206.5, duress, unconscionability, severability, and PAGA considerations; ultimately grants arbitration and dismisses the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendants waived arbitration rights | Grabowski argues waiver occurred due to litigation in court | Defendants contend delay was not waiver post-Concepcion | No waiver found; right to compel arbitration preserved |
| Whether the arbitration agreement is valid and covers the dispute | Arbitration provision is invalid under NLRA, CA law; not enforceable | FAA requires enforcement if a valid agreement covers the dispute | Agreement valid and encompasses the claims after severance of unconscionable terms |
| NLRA Section 7 impact on arbitration | Arbitration waivers infringe NLRA §7 rights | NLRA does not invalidate the arbitration provisions here | NLRA §7 does not render the arbitration provision unenforceable |
| California Labor Code §206.5 challenges | Signing was coercive to avoid wage forfeiture | No wages 'due' at signing; provision not unlawful | No §206.5 violation; bonuses linked to future pay, not earned wages |
| Conscionability and severability of provisions | Arbitration terms are procedurally/substantively unconscionable | Some terms are unconscionable but severable | Three provisions severable; remaining arbitration enforceable; PAGA claim arbitrable under Brown/Quevedo framework |
Key Cases Cited
- Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83 (Cal. 2000) (found unconscionability framework for arbitration in CA)
- Davis v. O'Melveny & Myers, 485 F.3d 1066 (9th Cir. 2007) (confidentiality and unconscionability analysis in arbitration)
- Ingle v. Circuit City Stores, Inc., 328 F.3d 1165 (9th Cir. 2003) (unilateral modification of contract terms; substantive unconscionability)
- Cox v. Ocean View Hotel Corp., 533 F.3d 1114 (9th Cir. 2008) (waiver and FAA posture regarding arbitration enforcement)
- Concepcion v. AT&T Mobility LLC, 131 S. Ct. 1740 (2011) (FAA preemption of California unconscionability in class-action waivers; enforcement of arbitration)