Martinez-Gonzalez v. Elkhorn Packing Co., LLC, 25f4th613

Background:

Plaintiff Dario Martinez-Gonzalez, an H‑2A seasonal agricultural worker recruited by Elkhorn, worked on fields operated by D’Arrigo during 2016–2017 and alleges widespread wage, meal/rest, housing, and safety violations and several intrusive entries into employer‑provided housing.
Plaintiff signed Spanish‑language arbitration agreements with Elkhorn in 2016 and 2017 that broadly require arbitration of “all claims . . . arising out of, relating to or in any way associated with” his employment and waive class/representative wage claims “to the extent permitted by law.”
District court held a bench trial on Plaintiff’s defenses (economic duress and undue influence) and denied the initial motion to compel arbitration; the Ninth Circuit reversed those unenforceability rulings and remanded to determine whether Plaintiff’s claims fall within the arbitration agreements’ scope.
On remand, Defendants moved to compel arbitration of all claims; Plaintiff raised new arguments (FAA inapplicability, fraud defense, that D’Arrigo cannot invoke the agreements, and certain non‑arbitrable claims including PAGA representative claims and intrusion tort).
The district court held the FAA applies, rejected Plaintiff’s belated fraud defense as forfeited and outside the Ninth Circuit’s remand, ruled D’Arrigo may compel arbitration under equitable estoppel, compelled the individual portion of the PAGA claim to arbitration and stayed the representative PAGA claim, and held the intrusion claim is arbitrable.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Applicability of FAA	FAA doesn't apply because arbitration agreements were standalone and not embedded in H‑2A job orders or a commercial contract	FAA applies because agreements relate to and govern disputes arising from employment affecting interstate commerce	FAA applies; agreements evidence a transaction involving commerce and govern employment disputes
Timeliness / Fraud defense	Plaintiff may now assert fraud (fraud in the factum) and court can decide on remand	Fraud defense was not timely raised at pretrial/bench trial and Defendants lacked notice; remand limited to scope question	Fraud defense forfeited; court lacks jurisdiction to consider it on remand given Ninth Circuit’s limited mandate
Whether D’Arrigo (nonsignatory) can enforce arbitration	D’Arrigo cannot compel arbitration because it didn't sign the agreements	D’Arrigo may compel arbitration under equitable estoppel (and alternatively agency/third‑party theories)	D’Arrigo may enforce the agreements under equitable estoppel; court need not reach other theories
Arbitrability of PAGA claim	Waiver clause is an unlawful wholesale waiver of PAGA representative claims, so PAGA shouldn't be arbitrated	Agreement permits arbitration of individual PAGA claims; representative portion may survive and be litigated consistent with Viking River	Individual portion of PAGA claim compelled to arbitration; representative PAGA claims stayed pending state‑law developments
Arbitrability of intrusion upon seclusion tort	Intrusion claim arises from non‑employment privacy wrongs and is outside the arbitration scope	The intrusion is alleged to have been committed by employer agents at employer housing and relates to employment	Intrusion claim falls within broad “arising out of/relating to” employment language and is arbitrable

Key Cases Cited

Martinez‑Gonzalez v. Elkhorn Packing Co. LLC, 25 F.4th 613 (9th Cir. 2022) (Ninth Circuit reversed district court’s duress/undue‑influence findings and remanded to decide scope of arbitration agreements)
Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (U.S. 2022) (FAA preempts rule preventing division of PAGA claims; individual PAGA claims may be compelled to arbitration)
Garcia v. Pexco, LLC, 11 Cal. App. 5th 782 (Cal. Ct. App. 2017) (equitable estoppel may bind nonsignatory employer‑clients when claims are intertwined with signatory’s employment agreement)
Franklin v. Cmty. Reg'l Med. Ctr., 998 F.3d 867 (9th Cir. 2021) (applied Garcia to compel arbitration against a nonsignatory client‑employer)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (federal policy favoring arbitration and arbitration as a matter of contract)
Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (court’s limited role under FAA: decide existence and scope of arbitration agreement)
Kramer v. Toyota Motor Corp., 705 F.3d 1122 (9th Cir. 2013) (summarizing doctrines allowing nonsignatories to invoke arbitration under state contract law)
New Prime Inc. v. Oliveira, 139 S. Ct. 532 (U.S. 2019) (threshold question whether FAA applies is for courts to decide)
Hall v. City of Los Angeles, 697 F.3d 1059 (9th Cir. 2012) (district court is bound by the scope of an appellate court’s remand)