Hernandez v. DMSI Staffing, LLC.
2015 WL 458083
N.D. Cal.2015Background
- Plaintiff Martina Hernandez filed a class action against DMSI Staffing, LLC and Ross Stores, Inc. for California wage-and-hour and UCL violations, plus a PAGA representative claim.
- Hernandez was initially in Alameda County Superior Court; Defendants removed to federal court and remand was denied.
- Hernandez alleged joint employment with DMSI and Ross, with DMSI supplying workers to Ross’s California warehouses.
- Hernandez signed a Dispute Resolution Agreement (DRA) with DMSI and Ross’s Arbitration Policy with class-action waiver language.
- Ross’s arbitration policy explicitly bars class, private attorney general, or representative actions; Iskanian governs PAGA waivers in California law.
- Plaintiff sought to arbitrate labor-code and UCL claims but contested the PAGA representative claim; plaintiff moved to amend to dismiss PAGA, which the court denied.
- The court granted arbitration as to Hernandez’s first six causes of action and denied/defers on the PAGA claim, directing further briefing on next steps.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAA preemption bars Iskanian’s PAGA waiver rule | Hernandez argues Iskanian’s anti-waiver rule constrains waiver via arbitration. | Defendants contend FAA preempts Iskanian, allowing waiver/arbitration of PAGA. | FAA does not preempt Iskanian’s PAGA waiver rule. |
| Whether PAGA representative waiver clauses are enforceable | Hernandez asserts PAGA waiver is unenforceable under state law. | Ross/DMSI argue waivers should be enforceable under FAA preemption standards. | Waivers of PAGA representative claims are not enforceable under Iskanian. |
| Whether the DRA and Ross Arbitration Policy bar the PAGA claim | Clauses purport to bar PAGA; Iskanian governs enforceability. | Waivers should be enforced to compel arbitration of PAGA claims. | DRA/Ross Policy do not bar arbitration of PAGA claims; Iskanian governs non-enforceability. |
| Whether plaintiff may amend to dismiss PAGA claim | Plaintiff sought time-barred PAGA dismissal; amendment should be allowed. | Amendment would be futile and prejudice defendants; filed in bad faith. | Plaintiff’s motion to amend denied; proceed to merits and arbitration rulings. |
Key Cases Cited
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA anti-waiver rule not enforceable under California law; government enforcement role)
- Concepcion v. California, 563 U.S. 333 (U.S. 2011) (FAA preemption of state Discover Bank rule; class-action procedures not required in PAGA)
- Baumann v. Citibank, N.A., 747 F.3d 1113 (9th Cir. 2014) (PAGA representative actions differ from class actions; no numerosity requirements)
- Ferguson v. Corinthian Colleges, Inc., 733 F.3d 928 (9th Cir. 2013) (FAA preemption context for Broughton-Cruz rule)
- Waffle House, Inc. v. Salesforce?, 534 U.S. 279 (U.S. 2002) (FAA policy and proper scope of arbitration)
- Arias v. Superior Court, 46 Cal.4th 960 (Cal. 2009) (PAGA framework; LWDA as real party in interest)
- Kilgore v. KeyBank, Nat’l Ass’n, 673 F.3d 947 (9th Cir. 2012) (Broughton-Cruz rule context; preemption discussion)