Jose Antonio Santana Rubio v. Ritz-Carlton Hotel Company, LLC, et al

Case Number

24CV04533

Case Type

Hearing Date / Time

Wed, 04/23/2025 - 10:00

Nature of Proceedings

Motion To Compel Arbitration And To Stay All Proceedings Pending Arbitration

Tentative Ruling

For Plaintiff Jose Antonio Santana Rubio: Kane Moon, Christopher L. Garcia, Ryan D. Handley, Moon Law Group, PC

                                   

For Defendants The Ritz-Carlton Hotel Company, L.L.C., Marriott International Administrative Services, Inc., and Luis De La Mora Sotelo: Jennifer S. McGeorge, Julie A. Bachert, Ford & Harrison LLP.

                      

RULING

For all reasons discussed herein, the motion of defendants The Ritz-Carlton Hotel Company, L.L.C., and Marriott International Administrative Services, Inc., to compel arbitration and stay all proceedings is denied.

Background

On August 16, 2024, plaintiff Jose Antonio Santana Rubio (Rubio) filed a complaint against defendants Ritz-Carlton Hotel Company, LLC (the Ritz), Marriott International Administrative Services, Inc. (Marriott), and Luis De La Mora Palmas (Palmas) (collectively, defendants). As alleged in the complaint:

In July 2015, defendants hired Rubio as a dish washer. (Compl., ¶ 8.) On April 12, 2022, Rubio’s doctor diagnosed Rubio with a hernia. (Id. at ¶ 9.) Rubio’s doctor scheduled Rubio for surgery the following day and placed Rubio on a medical leave of absence which was extended from time to time. (Ibid.) Rubio immediately informed defendants of his surgery. (Ibid.)

On May 11, 2022, Rubio fell and injured his pelvis. (Compl., ¶ 10.) Rubio immediately informed defendants of this injury and requested a medical leave of absence. (Ibid)

Rubio’s hernia and pelvis injury interfered with Rubio’s major life activities and Rubio’s ability to work. (Compl., ¶ 18.)

In June 2022, Rubio noticed that defendants were no longer providing him with health insurance. (Compl., ¶ 11.) Rubio asked defendants about the status of Rubio’s job and health insurance, and complained to Palmas that defendants were effectively firing him because of a disability. (Id. at ¶¶ 11-12.) Though defendants initially told Rubio that they would investigate his complaints, defendants never followed up with Rubio and began to ignore Rubio, effectively firing Rubio after nearly 7 years of service. (Id. at ¶¶ 13-14.)

Rubio believes that defendants terminated his employment in retaliation for Rubio being disabled, for Rubio taking time off work because of a medical condition, for Rubio’s medical leave of absence and requests for accommodation, and for Rubio’s complaints of illegal activity. (Compl., ¶ 15.) Before terminating Rubio, defendants failed to engage in a good faith interactive process to determine effective reasonable accommodations, and failed to accommodate Rubio’s disability. (Id. at ¶¶ 16-17.)

In the complaint, Rubio alleges eleven causes of action: (1) disability discrimination in violation of Government Code section 12900 et seq. (the California Fair Employment and Housing Act or FEHA) (against the Ritz and Marriott); (2) failure to engage in a good faith interactive process in violation of the FEHA (against the Ritz and Marriott); (3) failure to accommodate in violation of the FEHA (against the Ritz and Marriott); (4) retaliation in violation of the FEHA (against the Ritz and Marriott); (5) failure to take all reasonable steps to prevent discrimination or retaliation in violation of the FEHA (against the Ritz and Marriott); (6) interference in violation of Government Code section 12945.2 (the California Family Rights Act or CFRA) (against the Ritz and Marriott); (7) retaliation in violation of the CFRA (against the Ritz and Marriott); (8) discrimination in violation of the CFRA (against the Ritz and Marriott); (9) violation of Labor Code section 1102.5 (against all defendants); (10) violation of Labor Code section 98.6 (against the Ritz and Marriott); and (11) wrongful termination in violation of public policy (against the Ritz and Marriott).

Court records reflect that on September 19, 2024, the Ritz and Marriott (collectively, the Hotel Defendants) filed a notice of removal of this case to the United States District Court for the Central District of California (the District Court). (See Oct. 22, 2024, District Court Order & Ltr. filed Oct. 30, 2024.) The record further reflects that, after removal, the action was assigned District Court case number 2:24-cv-08042-SB-AS (the District Court Action). (Ibid. [docket sheet].)

The record also shows that on October 22, 2024, the District Court entered in the District Court Action an order remanding the case to this Court, based on lack of subject matter jurisdiction. (See Oct. 22, 2024, District Court Order & Ltr. filed Oct. 30, 2024.) The civil docket sheet for the District Court Action, a copy of which is attached to a letter from the District Court dated October 22, 2024, and filed in this action on October 30, 2024, shows, among other things, that on October 18, 2024, Rubio filed in the District Court Action a first amended complaint (the FAC). (Ibid.)

After remand, and pursuant to a stipulation of the parties filed in this action on November 6, 2024, this court entered an order on November 8, 2024, granting the Hotel Defendants an extension of time to file a response to Rubio’s complaint to December 2, 2024.

Pursuant to a second joint stipulation of the parties filed in this action on November 15, 2024, the court entered an order on November 18, 2024, granting the Hotel Defendants an extension of time to file a response to the FAC to December 17, 2024.

On December 13, 2024, the Hotel Defendants filed a third joint stipulation (the third stipulation) in which the parties agreed that counsel for the Hotel Defendants first learned that Rubio had “potentially” entered into an arbitration agreement with the Hotel Defendants on December 12, 2024. (See Dec. 13, 2024, Third Stip. At p. 4, ll. 12-13.) The parties further agreed to extend the time for the Hotel Defendants to file a response to the FAC to January 16, 2025. (Ibid.)

On December 17, 2024, the Hotel Defendants filed an answer to the FAC, generally denying its allegations and asserting forty-eight affirmative defenses. A copy of the FAC filed by Rubio in the District Court Action is attached to the answer as exhibit A.

In the FAC, Rubio alleges the same causes of action set forth above and asserts the same allegations described above, including the allegations set forth in paragraphs 8 through 18 of the complaint. As further alleged in the FAC:

In August 2020, Rubio’s doctor diagnosed Rubio with kidney failure which required dialysis three times a week. (FAC, ¶ 9.) Rubio did not need to take time off work to attend dialysis. (Ibid.) Rubio informed defendants of his kidney condition which also interfered with Rubio’s work and major life activities. (Id. at ¶¶ 9 & 21.)

As a result of the hernia diagnosis further detailed above, Rubio’s doctor placed Rubio on a medical leave of absence for approximately one month, of which Rubio informed defendants. (FAC, ¶ 10.) In addition, Rubio was hospitalized for approximately two weeks as a result of the May 11, 2022, fall described above, in which Rubio fell and fractured his pelvis. (Ibid.)

Within one month of sustaining the pelvis injury described above, Rubio noticed that defendants were no longer providing him with health insurance. (FAC, ¶ 12.) When Rubio attempted to speak to defendants’ Human Resources department to request information regarding Rubio’s employment and health insurance, Rubio was informed that he was no longer in defendants’ “system”. (Id. at ¶ 13.) Defendants began ignoring Rubio in June 2022. (Id. at ¶ 15.) When defendants cancelled Rubio’s health insurance and ignored Rubio’s requests to confirm his employment, Rubio understood that defendants were firing him. (Id. at ¶ 16.)

If defendants had provided Rubio with a medical leave of absence to accommodate Rubio’s disability, Rubio would have been able to return to work with or without restrictions, and to perform the essential functions of his job. (FAC, ¶ 20.)

On January 24, 2025, the Hotel Defendants filed the present motion (the arbitration motion) for an order compelling Rubio to arbitrate this dispute, including the issue of arbitrability, and staying the litigation pending the outcome of the arbitration.

In support of the arbitration motion, the Hotel Defendants submit the declaration of Paul Bullock (Bullock), who states that he has been employed as the Director of Human Resources for the Ritz-Carlton Bacara (the Hotel) since September 10, 2022. (Bullock Decl., ¶ 1.) In this role, Bullock is responsible for interviewing and hiring new employees, reviewing all new hire paperwork, conducting training, and supervising human resources matters and the employment-related policies and practices of the Hotel. (Id. at ¶ 2.)

Bullock declares that the Ritz is a luxury hotel chain with locations across the United States and in more than 30 countries, and which provides lodging to international and out of state business travelers and tourists. (Bullock Decl., ¶ 3.) The Ritz operates the Hotel, which is located in Santa Barbara, California, and purchases linens, uniforms, cleaning supplies and equipment, maintenance equipment and parts, and food and beverage products, from outside of California. (Id. at ¶¶ 1 & 3.)

Bullock states that Rubio began working at the Hotel as a steward on September 8, 2017. (Bullock Decl., ¶ 4.) As part of the Hotel’s onboarding process, newly hired employees receive an employee handbook and policies relating to timekeeping, meal and rest periods, attendance, and workplace injuries. (Ibid.) According to Bullock, the Hotel also provides employees with an “Agreement to Arbitrate”, either during or after the onboarding process. (Ibid.) Bullock states that copies of all paperwork signed by newly hired employees, including the “Agreement to Arbitrate”, are placed in the employees’ personnel files. (Ibid.)

Bullock declares that he reviewed Rubio’s personnel file and obtained a copy of a document entitled “Acknowledgment of Agreement” which Bullock contends was signed by Rubio on November 23, 2017. (Bullock Decl., ¶ 4.) Bullock asserts that, pursuant to the Acknowledgment of Agreement, Rubio agreed to arbitrate certain disputes related to his employment at the Ritz. (Ibid.) A copy of the Acknowledgment of Agreement obtained by Bullock from Rubio’s personnel file is attached to the Bullock declaration as exhibit A.

In addition, Bullock states that he has access to what Bullock describes as the current and historical arbitration agreements maintained by the Ritz. (Bullock Decl., ¶ 4.) Bullock attaches to his declaration as exhibit B, a copy of a document entitled “The Ritz-Carlton Employee Agreement” (the Employee Agreement), which Bullock contends is the April 2016 version of the arbitration agreement that corresponds to the Acknowledgment of Agreement signed by Rubio on November 23, 2017, and further detailed above. (Id. at ¶ 4 & Exh. B.)

The Hotel Defendants also submit the declaration of their counsel, Julie A. Bachert (Bachert), who declares that on September 26, 2024, the District Court entered an order in the District Court Action requiring the parties to meet and confer to discuss whether Rubio’s claim against Palmas should be dismissed, and to resolve this matter in full. (Bachert Decl., ¶ 5.) Bachert further declares that the District Court ordered Rubio to, on or before October 4, 2024, either dismiss the claims against Palmas, or to file a noticed motion to remand to the extent Rubio believed he had a viable claim against Palmas. (Ibid.)

Bachert states that on October 4, 2024, Rubio filed in the District Court Action a motion to remand the case to state court which was opposed by the Hotel Defendants. (Bachert Decl., ¶¶ 6 & 8.) Bachert further asserts that on October 10, 2024, the Hotel Defendants filed in the District Court Action a motion to dismiss Rubio’s complaint. (Id. at ¶¶ 7, 9-10, & 13.) Bachert contends that the District Court deemed the motion to dismiss as moot, did not hear or make a ruling on that motion, and remanded the case on October 22, 2024. (Id. at ¶¶ 9, 11, & 14.)

Bachert also states that the parties entered into the November 6, 2024, stipulation described above because, among other things, the Hotel Defendants anticipated that their response to the FAC was due on November 18, 2024, and Rubio’s counsel represented that he needed additional time to consider filing a second amended complaint. (Bachert Decl., ¶ 15.) Bachert further asserts that the parties filed the second joint stipulation on November 16, 2024, to allow Rubio additional time to consider filing a second amended complaint and to allow the parties adequate time to meet and confer in advance of a potential demurrer by the Hotel Defendants to the FAC. (Id. at ¶ 17.)

Bachert asserts that on December 12, 2024, she informed Rubio’s counsel that “there was a potential arbitration agreement executed by [Rubio] during his employment.” (Bachert Decl., ¶ 19.) The parties agreed to extend the Hotel Defendants’ time to file a response to the FAC pursuant to the third stipulation described above which, according to Bachert, was intended to allow the Hotel Defendants additional time to analyze the potential arbitration agreement, to allow the parties to meet and confer regarding that agreement, and to provide Rubio additional time to consider filing a second amended complaint. (Id. at ¶¶ 19-20.)

According to Bachert, the Hotel Defendants filed an answer to the FAC to avoid a default. (Bachert Decl., ¶ 22.) Bachert further asserts that, on the same date the Hotel Defendants filed their answer to the FAC, Bachert provided to Rubio’s counsel a copy of the Acknowledgment of Agreement and the April 2019 version of the Employee Agreement. (Id. at ¶ 23 & Exh. D.) Bachert declares that the first time Rubio stated that he would not agree to submit the dispute to arbitration was during a case management conference conducted in this matter on January 15, 2025. (Id. at ¶ 26.) On January 23, 2025, Bachert sent to Rubio’s counsel a copy of the April 2016 version of the Employee Agreement. (Id. at ¶ 29 & Exh. H.)

On March 12, 2025, Luis De La Mora Sotelo (Sotelo), who asserts that he was erroneously sued and served in this action as Palmas, filed a joinder in the arbitration motion.

The arbitration motion is opposed by Rubio, who submits a declaration stating that he was employed with the Hotel Defendants from July 2015 through June 2022, and that Sotelo (who Rubio refers to as Palmas) was Rubio’s supervisor. (Rubio Decl., ¶ 2.) Rubio, who is a native Spanish speaker, asserts that the Hotel Defendants knew that he had a limited ability to speak, read, or write in English. (Id. at ¶¶ 3-4.)

Rubio further asserts that during his employment with the Hotel Defendants, he was forced to sign numerous documents that were in English, and that no Spanish translation of these documents was provided. (Rubio Decl., ¶ 5.) Rubio states that he did not have an opportunity to read or consult with an attorney concerning any documents during his employment with the Hotel Defendants. (Id. at ¶ 8.)

Rubio declares that he has reviewed the copies of the Acknowledgment of Agreement and Employee Agreement attached to the Bullock declaration, and that he does not remember, and never received a Spanish translation of, these documents. (Rubio Decl., ¶ 6.)

Rubio also asserts that the Hotel Defendants and Sotelo/Palmas never discussed or explained arbitration or arbitration agreements, that Rubio did not understand what arbitration was until his counsel explained it to him, and that if the Hotel Defendants or Sotelo/Palmas had explained what arbitration was, or if Rubio had been aware of the existence of an agreement to arbitrate, he would have never signed Acknowledgment of Agreement. (Rubio Decl., ¶¶ 7 & 10.) According to Rubio, the Hotel Defendants and Sotelo/Palmas also did not tell Rubio that there was an opt-out provision, that any agreement to arbitrate was voluntary or negotiable, or that Rubio could refuse to agree to arbitration. (Id. at ¶ 9.)

Rubio also submits the declaration of his counsel, Ryan D. Handley (Handley), in support of his opposition to the arbitration motion. Handley asserts that, as grounds for removal of this action, the Hotel Defendants argued that Rubio fraudulently joined Palmas as an individual defendant in this action for the purpose of depriving the District Court of diversity jurisdiction. (Handley Decl., ¶ 4; see also Sept. 19, 2024, Notice of Removal, Exh. A at ¶¶ 13-24 [arguing that claims against Palmas are “baseless” and that Palmas was fraudulently joined].) Handley further asserts that on September 26, 2024, the District Court ordered, among other things, that Rubio either dismiss Palmas or file a motion to remand by October 4, 2024, which Rubio filed on that date. (Id. at ¶¶ 5-7.)

In addition, Handley states that on September 18, 2024, counsel for the Hotel Defendants transmitted a “meet and confer” email relating to a motion to dismiss, which the Hotel Defendants filed in the District Court action on October 10, 2024, pursuant to rule 12(b)(6) of the Federal Rules of Civil Procedure (28 U.S.C.). (Handley Decl., ¶¶ 3, 8, & Exh. 1.) Handley further states that on October 16, 2024, he engaged in meet and confer efforts with the Hotel Defendants’ counsel as required under rule 26(f) of the Federal Rules of Civil Procedure. (Ibid. & Exh. 2.)

Handley asserts that, after remand, counsel for the Hotel Defendants transmitted a letter regarding a demurrer to the FAC filed by Rubio in the District Court Action on October 18, 2024. (Handley Decl., ¶¶ 9, 11, & Exh. 3.)

According to Handley, the first time the Hotel Defendants’ counsel informed Rubio of the existence of any arbitration agreement was on December 12, 2024. (Handley Decl., ¶ 12.) On December 23, 2024, Rubio served the Hotel Defendants with special interrogatories and request for production of documents, to which the Hotel Defendants responded on January 24, 2025. (Id. at ¶¶ 15-16 & Exhs. 6-7.) Handley further notes that a job application produced by the Hotel Defendants shows that Rubio’s English ability is “beginner”. (Handley Decl., ¶ 14 & Exh. 5.)

The above summary is not intended to be exhaustive, and the Court considers all admissible evidence submitted in support of and in opposition to the arbitration motion.

On March 19, 2025, the Court entered a Minute Order (the Minute Order) adopting its tentative ruling on the arbitration motion as follows:

“Notwithstanding whether or not the Acknowledgment of Agreement, either alone or in conjunction with the Employment Agreement, constitutes a valid and enforceable agreement to arbitrate the present dispute, or whether or not there exists a delegation clause requiring issues of arbitrability to be submitted to an arbitrator (and the Court presently makes no findings as to these matters), there exists some question as to whether or not the Hotel Defendants have waived their right to arbitrate. (See, e.g., Morgan v. Sundance, Inc. (2022) 596 U.S. 411, 417-419 [general discussion under federal procedural rules]; Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, 583-585 [same re state procedural rules].)

For reasons further discussed below, the Court requires, but does not presently have, an appropriate record on which it may determine the issue of waiver. Therefore, and for the reasons further discussed below, the Court will continue the hearing on the arbitration motion.

As a preliminary matter, the Hotel Defendants contend that, under the express terms of the Acknowledgment of Agreement, the Federal Arbitration Act, codified as chapter 1 of title 9 of the United States Code (the FAA), governs the arbitration at issue.

“[T]he presence of interstate commerce is not the only manner under which the FAA may apply.” (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355.) “In accordance with choice-of-law principles, the parties may limit the trial court’s authority … under the [California Arbitration Act] by adopting the more restrictive procedural provisions of the FAA.” (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 157.) Whether an agreement to arbitrate incorporates the FAA’s procedural provisions “is a question of law involving interpretation of statutes and the contract (with no extrinsic evidence).” (Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1117.) “[T]he starting point in the interpretation of [a] choice-of-law clause, like any contractual provision, is with the language of the contract itself.” (Mount Diablo Medical Center v. Health Net of California, Inc. (2002) 101 Cal.App.4th 711, 722; see also Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 384 [“state contract rules generally govern the construction of arbitration agreements”].)

The Acknowledgment of Agreement includes a provision which states: “I understand that arbitration under this Agreement is governed by the [FAA].” (Bullock Decl., Exh. A [fifth paragraph].) The choice-of-law provision contained in the Acknowledgment of Agreement is unambiguous and demonstrates that, to the extent the Acknowledgment of Agreement constitutes a valid and enforceable agreement to arbitrate the present dispute, the parties intended that the FAA would govern the arbitration.

In his opposition to the motion, Rubio does not dispute that the Acknowledgment of Agreement includes an express provision that arbitration under that agreement is governed by the FAA. Rubio also offers no reasoned argument to show why the FAA does not govern arbitration under the Acknowledgment of Agreement, including by referring to other provisions within that document or the Employee Agreement, to show that the parties intended that any required arbitration would be governed in any respect by California law.

Additional undisputed evidence and information offered in the Bullock declaration is also sufficient to show that arbitration under the Acknowledgment of Agreement is subject to or governed by the FAA.

The terms “involving commerce” are “the functional equivalent of “affecting[]” commerce. (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 273-274.) “[T]he pertinent question is whether the contract evidences a transaction involving interstate commerce, not whether the dispute arises from the particular part of the transaction involving interstate commerce.” (Shepard v. Edward Mackay Enterprises, Inc. (2007) 148 Cal.App.4th 1092, 1101; see also Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56-57 [“Congress’ Commerce Clause power ‘may be exercised in individual cases without showing any specific effect upon interstate commerce’ if in the aggregate the economic activity in question would represent ‘a general practice ... subject to federal control.’ [Citations.] Only that general practice need bear on interstate commerce in a substantial way. [Citation.]”].)

The information and evidence offered in the Bullock declaration, which is not disputed or effectively disputed by Rubio, is sufficient to show that the Hotel Defendants’ aggregate economic activity represents a general practice which bears on interstate commerce. Rubio offers no reasoned factual or legal arguments showing that he was not working in, or engaging in activity that affected, interstate commerce with respect to Rubio’s duties at the Hotel. Rubio also has not provided any reasoned argument to show that the FAA does not apply to his employment with the Hotel Defendants. (Bernhardt v. Polygraphic Co. of America (1956) 350 U.S. 198, 200-201 [FAA governs if employee was “working ‘in’ commerce, was producing goods for commerce, or was engaging in activity that affected commerce”].Further, even if Rubio’s activities did not have a specific effect on interstate commerce, because the aggregate economic activity of the Hotel and the Hotel Defendants represents a general practice bearing on commerce, it is subject to federal control.

For all reasons further discussed above, the Hotel Defendants have met their burden to show that, to the extent any arbitration may be compelled under the Acknowledgment of Agreement, the arbitration is governed by the FAA.

In the arbitration motion, the Hotel Defendants assert that Rubio will argue that the Hotel Defendants have waived their right to arbitrate by removing this case to federal court, filing a motion to dismiss in the District Court Action (which the Hotel Defendants contend was mooted upon remand), and by filing an answer to the FAC in this Court. (Notice at p. 2, ll. 23-25.) The Hotel Defendants contend that their conduct in the District Court Action and in this action does not constitute a waiver of the right to arbitration, and that they have expressly asserted a right to arbitration, and an affirmative defense based on that right, in their answer to the FAC. (Id. at ll. 26 & p. 3, ll. 1-18; see also Memo. at p. 2, ll. 1-24.) For these reasons, the Hotel Defendants contend, they have not waived their right to arbitration. (Notice at p. 1, ll. 13.)

In his opposition to the arbitration motion, Rubio contends that, though the Hotel Defendants have been in possession of the Employee Agreement and the Acknowledgment of Agreement for over seven years, the Hotel Defendants removed the case to the District Court and filed a motion to dismiss in the District Court Action instead of moving to compel arbitration. Furthermore, Rubio argues, the removal of the case to federal court forced Rubio to litigate this matter and to file the FAC in the District Court Action in order to avoid the motion to dismiss filed by the Hotel Defendants. Rubio contends that this conduct by the Hotel Defendants is inconsistent with the right to arbitrate.

Rubio further asserts that, though counsel for the Hotel Defendants informed Rubio’s counsel in December 2024 that they had located an arbitration agreement, nothing in the information or evidence submitted with the arbitration motion shows when the Hotel Defendants discovered the Acknowledgment of Agreement. For these and all reasons further discussed above, Rubio contends, the Hotel Defendants have waived any right to compel arbitration of Rubio’s disputes.

Based on the points raised by the Hotel Defendants and Rubio and further discussed above, it appears to the Court that the motion to dismiss filed by the Hotel Defendants in the District Court Action and described in the parties’ respective moving and opposing papers is material to the issue of whether or not the Hotel Defendants waived their right to arbitration. It also appears that Rubio’s motion to remand, and the Hotel Defendants’ opposition to that motion, may be material to the waiver issue.

The Superior Court of Santa Barbara County, Local Rules, rule 1308, provides that “[d]ocuments filed in federal court after removal are not provided to the superior court. To complete the superior court’s file after remand, within 30 days of the filing of the order of remand, each party shall file a declaration describing the material pleadings that party filed in the federal action and the pertinent orders or rulings entered in the federal action. Certified or conformed copies of all such pleadings and papers shall be attached to the declaration.” (Super. Ct. Santa Barbara County, Local Rules, rule 1308.) (Note: Undesignated rule references shall be to the Local Rules of the Superior Court of Santa Barbara County unless otherwise indicated.)

Though the motion to dismiss filed by the Hotel Defendants in the District Court Action, and the papers supporting and opposing the motion to remand filed by Rubio, are or appear to be material to the issue of waiver raised in the arbitration motion and Rubio’s opposition to that motion, neither the declarations described in rule 1308, nor certified or conformed copies of these papers and pleadings, have been submitted by any party in compliance with rule 1308.

As the Court requires a complete and appropriate record on which to determine the issue of waiver raised by the parties in this proceeding, which must include all matters or filings that are or may be material to the issue, the Court will continue the hearing on the arbitration motion and order the Hotel Defendants and Rubio to, with respect to each material pleading or paper filed by each party in the District Court Action, file and serve the declaration described in rule 1308, together with certified or conformed copies of the Hotel Defendants’ motion to dismiss, Rubio’s motion to remand, the Hotel Defendants opposition to Rubio’s motion to remand, and any other pleadings or papers which are material to the waiver issue raised by the parties, in compliance with rule 1308.

In addition, in their reply to Rubio’s opposition to the arbitration motion, the Hotel Defendants contend that the issue of waiver must be determined by an arbitrator under what the Hotel Defendants contend is a delegation clause contained in the Employment Agreement. Though the Hotel Defendants raise the waiver issue in their opening memorandum, and additionally argue at length in that memorandum that there exists a delegation clause in the Employee Agreement which requires the Court to assign the issue of arbitrability to the arbitrator, wholly absent from the moving papers is any reasoned argument showing why the issue of waiver must, under the purported delegation clause, be assigned to an arbitrator irrespective of whether there exists a waiver of the right to arbitrate.

The Hotel Defendants also submit a supplemental declaration of Bullock in support of their reply, in which Bullock states that the Employee Agreement was not located in Rubio’s personnel file. (Supp. Bullock Decl., ¶ 2.) Instead, Bullock asserts, the Employee Agreement “is in the form of a pamphlet, is typically given to the employee as a matter of the Hotel’s practice, while the signed Acknowledgment of Agreement is placed in and kept in the employee’s personnel file (in this case, [Rubio’s] personnel file).” (Ibid.)

Bullock further states in his supplemental declaration that “[t]here was initially some difficulty in locating the April 2016 version of the [Employee] Agreement, which corresponds to the Acknowledgment of Agreement signed by [Rubio].” (Supp. Bullock Decl., ¶ 3.) Bullock also asserts that he and his colleague were able to locate a later version of the Employee Agreement (i.e., the April 2019 version) in December 2024, and that, after conducting a further search, Bullock was able to locate the April 2016 version of the Employee Agreement at issue in January 2025. (Id. at ¶ 3.)

“The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers.” (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537 (Jay).) Further, “[p]oints raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument.” (American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453.)

The points raised in the Hotel Defendants’ reply papers with respect to whether the issue of waiver must be determined by an arbitrator under the purported delegation clause discussed at length in the moving papers, and the information provided in the supplemental Bullock declaration described above, constitute new points and evidence which the Hotel Defendants should have but failed to include in their moving papers. These new points and evidence are offered to shore up the Hotel Defendants’ arguments that a purported delegation clause requires the Court to assign all arbitrability issues to an arbitrator, and that they did not waive their right to arbitration. The gaps the Hotel Defendants seek to fill with the new matters and evidence offered in the reply papers and the supplemental Bullock declaration are gaps in the Hotel Defendants’ original arguments and evidence, and not gaps created by Rubio’s opposition to the motion.

Though the Court has discretion to decline consideration of the new evidence offered in the supplemental Bullock declaration and the new points raised for the first time in the Hotel Defendants’ reply memorandum, as the Court will continue the hearing, and in the interests of justice including concerns of due process, the Court will admit the supplemental Bullock declaration and consider the new points raised by the Hotel Defendants in reply after Rubio is provided the opportunity to rebut and counter these new points and evidence, including whether and to what extent the issue of waiver must be delegated to an arbitrator, if at all. (Jay, supra, 218 Cal.App.4th at p. 1538; San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316.)

For all reasons discussed above, the Court will authorize Rubio to submit a supplemental brief which may be directed only the new points and evidence raised in the reply of the Hotel Defendants and the supplemental Bullock declaration as further discussed above. As the Hotel Defendants raised the issue of waiver in their moving and reply papers, the Hotel Defendants have had an opportunity to fully address this issue, including in response to Rubio’s opposition. Therefore, the Hotel Defendants shall not be permitted to file a response to the supplemental brief of Rubio. In addition, nothing herein shall authorize any party to file additional papers in support of or in opposition to the arbitration motion apart from the supplemental brief described above.”

Pursuant to the Minute Order, the Court continued arbitration motion to April 23, 2025, and ordered the parties to, on or before April 7, 2025, each file and serve all necessary declarations, together with certified or conformed copies of material pleadings and papers, as required by Superior Court of Santa Barbara County, Local Rules, rule 1308. In addition, the Court authorized Rubio to file and serve a supplemental brief responding to the new points and evidence raised in the Hotel Defendants’ reply brief.

On April 7, 2025, the Hotel Defendants filed, in four parts, a second Bachert declaration to which is attached a copy of what Bachert describes as the civil docket for the District Court Action, and copies of documents identified in entry nos. 1 through 16, 18, 20, 21, 24 through 28 of that docket, which include various court notices and orders, and motions and other documents filed by the Hotel Defendants in the District Court Action. (Apr. 7, 2025, Bachert Decl., Part 1, ¶ 3-26 & Exhs. A-Y.)

Also on April 7, 2025, Rubio filed a second declaration of his counsel Handley, to which are attached as exhibits 1 through 53, various motions and other documents filed by Rubio and the Hotel Defendants in the District Court Action, and a supplemental brief.

Analysis

Noted above, the parties dispute whether the Hotel Defendants have waived the right to arbitrate and whether or not an arbitrator must decide the issue of waiver pursuant to what the Hotel Defendants describe as a delegation clause.

The Hotel Defendants contend that the removal of the case to the District Court and the filing of an answer to the FAC do not constitute a waiver of the right to arbitrate, an issue which the Hotel Defendants argue must be decided by the arbitrator pursuant to a delegation clause. Rubio contends that the Hotel Defendants waived their right to arbitrate by removing the case to the District Court, filing a motion to dismiss Rubio’s claims in the District Court Action, requiring Rubio to file the FAC and to engage in the conference required under rule 26(f) of the Federal Rules of Civil Procedure (28 U.S.C.), and requiring Rubio to file a motion to remand the case back to this court.

The Hotel Defendants do not appear to, and cannot reasonably, dispute that the any purported waiver of the Hotel Defendants’ their right to arbitrate arises from “conduct related to the judicial process….” (Thorup v. Dean Witter Reynolds, Inc. (1986) 180 Cal.App.3d 228, 235; cf. Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 964, fn. 1 [addressing “nonlitigation conduct” giving rise to waiver allegations at issue in that case].) Generally, the question of whether a party has waived any right to arbitrate a dispute by engaging in conduct related to the judicial process, or “litigation conduct”, is decided by the court and not the arbitrator. (Hong v. CJ CGV America Holdings, Inc. (2013) 222 Cal.App.4th 240, 255-258 (Hong); see also Middlesex County v. Gevyn Const. Corp. (1st Cir. 1971) 450 F.2d 53, 56, fn. 2 [the “pursuit of legal remedy inconsistent with arbitration” constitutes a default under the FAA]; Martin v. Yasuda (9th Cir. 2016) 829 F.3d 1118, 1123 (Martin) [the question of waiver based on litigation conduct is “presumptively for a court and not an arbitrator to decide”].)

Notwithstanding the presumption that the court determines whether a party has waived its right to arbitrate based on that party’s litigation conduct, the parties may agree that an arbitrator will determine the issue of waiver by placing “clear and unmistakable language to that effect in the [arbitration] agreement.”  (Hong, supra, 222 Cal.App.4th at p. 258; Martin, supra, 829 F.3d at p. 1124; see also Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 772 [“clear and unmistakable” test “applies under both the FAA and California law”].) To the extent an arbitration agreement is silent or ambiguous with respect to an arbitrator’s power to decide a particular question or issue, a court will not conclude that the parties have agreed that the arbitrator, and not the court, will determine that issue. (Hartley v. Superior Court (2011) 196 Cal.App.4th 1249, 1254 (Hartley).)

The purported delegation clause on which the Hotel Defendants rely appears in the Employee Agreement attached to the Bullock declaration as exhibit B. The clause provides that “questions related to procedure (including venue and choice of arbitrator), and arbitrability (that is whether an issue is subject to arbitration under this agreement) shall also be decided by the arbitrator.” (Motion at p. 6, ll. 21-24; Bullock Decl., Exh. B at p. 12/pdf p. 14 [section titled “What Types Of Issues Are Covered By This Agreement?”].)

Though the evidence and information offered by the Hotel Defendants, which is not effectively disputed by Rubio, shows that Rubio ostensibly signed the Acknowledgment of Agreement, the purported delegation clause on which the Hotel Defendants rely does not appear in that document. Further, the Hotel Defendants do not contend, and fail to explain why, the Acknowledgment of Agreement itself contains a delegation clause. There is also evidence showing that Bullock did not locate the Employee Agreement in which the purported delegation clause appears in Rubio’s personnel file. (See Bullock Reply Decl., ¶¶ 2-3.) This evidence raises some question regarding whether Rubio was provided with a copy of the Employee Agreement at the time he signed the Acknowledgment of Agreement.

Though, generally, the terms of another document may be incorporated into the document executed by the parties, “ ‘ “the reference must be clear and unequivocal, the reference must be called to the attention of the other party and he must consent thereto, and the terms of the incorporated document must be known or easily available to the contracting parties.” ’ [Citations.]” (Shaw v. Regents of University of California (1997) 58 Cal.App.4th 44, 54.) The Hotel Defendants also fail to explain why the Acknowledgment of Agreement ostensibly signed by Rubio includes clear or unequivocal language referencing the Employee Agreement or the purported delegation clause appearing in that document, calls to Rubio’s attention that there exists a delegation clause in the Employee Agreement, or why the terms of the delegation clause were known or easily available to Rubio such that Rubio consented to these terms. (Baker v. Aubry (1989) 216 Cal.App.3d 1259, 1264.)

Even if the court were to assume without deciding that the Employee Agreement and the Acknowledgment of Agreement are physically part of one agreement to arbitrate that was provided to Rubio at the time of hire (and the court presently makes no findings in this regard), the purported delegation clause does not clearly and unmistakably delegate the issue of waiver to the arbitrator.

For example, the plain language of the delegation clause on which the Hotel Defendants rely requires the arbitrator to determine whether a particular question or issue is subject to arbitration. Though a party can be compelled to resolve those disputes that party has agreed to settle by arbitration, the purported delegation clause at issue here is ambiguous as to whether the parties agreed that an arbitrator must decide the specific issue of waiver. For this reason, the evidence presented by the Hotel Defendants is insufficient to “satisfy the clear and unmistakable evidence standard.” (Hartley, supra, 196 Cal.App.4th at p. 1254; see also AT & T Technologies, Inc. v. Communications Workers of America (1986) 475 U.S. 643, 651, 106 S.Ct. 1415, 89 L.Ed.2d 648 [“[t]he willingness of parties to enter into agreements that provide for arbitration of specified disputes would be ‘drastically reduced,’ … if a[n] … arbitrator had the ‘power to determine his own jurisdiction ....’”]; First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 946, 115 S.Ct. 1920, 131 L.Ed.2d 985 [record did not demonstrate a “willingness to be effectively bound by the arbitrator’s decision on that point”].)

For all reasons discussed above, the Hotel Defendants have failed to show the existence of clear and unmistakable evidence that Rubio agreed to submit the question or issue of waiver by litigation conduct to an arbitrator. Therefore, and for all reasons discussed above, Rubio has a right to obtain the court’s decision as to whether or not the Hotel Defendants have waived the right to arbitrate.

“Under both the [FAA] and state law, waivers of the right to arbitrate are not lightly inferred.” (Hong, supra, 222 Cal.App.4th at pp. 248-249.) Generally, a waiver of the right to arbitrate exists when a party has knowledge of an existing right to arbitrate and acts in a manner which is inconsistent with that right. (Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, 573 (Quach); Martin, supra, 829 F.3d at p. 1124.)

To determine whether a party has waived a right to arbitrate, the court generally considers whether “ ‘ “ ‘the litigation machinery has been substantially invoked’ and the parties ‘were well into preparation of a lawsuit’ before the party notified the opposing party of an intent to arbitrate; … whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; … whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; …[and] ‘whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place’…..” ’ [Citations.]” (Quach, supra, 16 Cal.5th at p. 573; Peterson v. Shearson/American Exp., Inc. (10th Cir. 1988) 849 F.2d 464, 467.) The party opposing arbitration is not required to demonstrate prejudice resulting from any waiver of the right to arbitrate. (Quach, supra, 16 Cal.5th at p. 585; Morgan v. Sundance, Inc. (2022) 596 U.S. 411, 418-419, 142 S.Ct. 1708, 212 L.Ed.2d 753.)

As further detailed above, Rubio filed this action on August 16, 2024. The Hotel Defendants did not file the present motion until January 24, 2025, more than five months after Rubio initiated suit.

Available evidence and information also shows that the Hotel Defendants, including Bullock, were aware of the fact that, as part of the Hotel’s regular onboarding process, newly hired employees such as Rubio are provided with a copy of the arbitration agreement at issue in the arbitration motion. (Bullock Decl., ¶ 4.) Though Bullock states that there was initially some difficulty locating the April 2016 version of the Employee Agreement, there is no evidence or information showing that Bullock encountered any difficulty locating the Acknowledgment of Agreement. There is also no evidence or information to suggest that different versions of the Employee Agreement, including the 2019 version that Bullock was able to locate, do not include, or include different versions of, an agreement to arbitrate claims such as those raised by Rubio in this action.

The evidence and information further detailed above shows, expressly and by inference, that the Hotel Defendants had knowledge of their right to compel arbitration of Rubio’s claims at the time Rubio filed the complaint in this action. (Martin, supra, 829 F.3d at p. 1124.) Wholly absent from the arbitration motion is any reasonable explanation showing why the Hotel Defendants waited five months after Rubio filed the complaint to file the present motion. Absent any reasonable explanation, this delay is a “significant factor weighing in favor of finding waiver.” (Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 969.)

The present record also shows that the notice of removal of this case filed by the Hotel Defendants on September 19, 2024, (the Removal Notice) was made on the grounds that the matter in controversy exceeds the sum of $75,000 and is between citizens of different States under title 38 United States Code section 1332(a)(1). (Apr. 7, 2025, Bachert Decl., ¶ 4 & Exh. B, Section II(A) & (C), pp. 3-6 & 12-19.) Noted above, the Hotel Defendants also assert in the Removal Notice that Rubio cannot establish liability against Palmas under Labor Code section 1102.5, that Rubio’s joinder of Palmas in this action was fraudulent, and that the citizenship of Palmas, who is alleged to be a citizen of California, should be disregarded by the District Court. (Apr. 7, 2025, Bachert Decl., Exh. B, Section II(B), pp. 6-11.)

The record further shows that on October 10, 2024, the Hotel Defendants filed in the District Court Action a motion to dismiss each cause of action alleged in Rubio’s complaint, in which the Hotel Defendants argued that Rubio failed to plead sufficient facts to state each of the causes of action alleged in the complaint, and that no claim for discrimination under Government Code section 12945.1, which the Hotel Defendants refer to in the motion to dismiss as the California Family Rights Act, exists as a matter of law. (Apr. 7, 2025, Bachert Decl., Exh. T [motion to dismiss].) In addition, the Hotel Defendants met and conferred with Rubio regarding their motion to dismiss, and entered into a stipulation with Rubio (the Stipulation) to extend the time to file that motion. (Id. at Exh. G.)

“A party cannot keep its right to demand arbitration in reserve indefinitely while it pursues a decision on the merits before the district court.” (In re Mirant Corp. (5th Cir. 2010) 613 F.3d 584, 591.) Instead, the “extended silence and much-delayed demand for arbitration” of a party, including by filing pleadings and motions, is indicative of a “ ‘conscious decision to continue to seek judicial judgment on the merits of [the] arbitrable claims….’ [Citation.]” (Van Ness Townhouses v. Mar Industries Corp. (9th Cir. 1988) 862 F.2d 754, 759.) For all reasons discussed above, available evidence and information shows that, in their Removal Notice and motion to dismiss, the Hotel Defendants advanced points and arguments disputing or challenging the sufficiency or merits of the claims asserted by Rubio in this action, including those alleged against Palmas. For these reasons, the filing of the Removal Notice and motion to dismiss by the Hotel Defendants is inconsistent with an agreement to arbitrate these claims.

Moreover, in the Removal Notice, the Stipulation, and the motion to dismiss, the Hotel Defendants did not raise the issue of arbitration or assert any right to arbitrate the present dispute. (See Martin, supra, 829 F.3d at p. 1125 [defendant’s failure to claim a right to arbitration in any pleading was sufficient to show that defendant acted inconsistent with right to arbitration].) Instead, by filing the Removal Notice and the motion to dismiss, the Hotel Defendants chose to “take advantage of being in federal court” by seeking a decision on the substantive merits of what the Hotel Defendants now contend are arbitrable claims. (Ibid.) For these additional reasons, the evidence and information shows that the Hotel Defendants engaged in acts which are inconsistent with the right to arbitrate claimed in the arbitration motion. (Id. at pp. 1125-1126; Quach, supra, 16 Cal.5th at p. 573.)

Further, “although filing a motion to dismiss that does not address the merits of the case is not sufficient to constitute an inconsistent act, seeking a decision on the merits of an issue may satisfy this element.” (Martin, supra, 829 F.3d at p. 1125.) Noted above, the motion to dismiss filed by the Hotel Defendants in the District Court Action sought a judicial decision regarding the merits or sufficiency of the claims alleged in Rubio’s complaint. By taking advantage of a procedure available under Rule 12(b)(6) of the Federal Rules of Civil Procedure to challenge the sufficiency of the causes of action alleged in Rubio’s complaint, including by presenting defenses to those claims, the Hotel Defendants have engaged in litigation conduct in a manner which is inconsistent with the right to arbitrate. (Quach, supra, 16 Cal.5th at p. 573.)

Though the Hotel Defendants assert in their answer to the FAC that they reserve the right to arbitration, the purported reservation of this right was made four months after Rubio filed the complaint. Further, reserving a right to arbitrate is not the equivalent of asserting that right. (Martin, supra, 829 F.3d at p. 1125.) For these reasons, the assertion of a right to arbitrate based on the existence of an arbitration agreement which appears for the first time in the Hotel Defendants’ answer to the FAC is also, by itself, “not enough to defeat a claim of waiver.” (Ibid.)

The Hotel Defendants’ own evidence shows that the regular onboarding process at the Hotel includes providing newly hired employees with the Employee Agreement and the Acknowledgement of Agreement further discussed above. There is no evidence or information to show or suggest that the Hotel Defendants were not aware of the Hotel’s regular onboarding process, the Acknowledgment of Agreement, the Employee Agreement, or the purported agreement to arbitration contained within these documents, at the time Rubio filed the complaint. Though the record shows that the Hotel Defendants had knowledge of an existing alleged right to compel Rubio to arbitrate his claims at the time Rubio filed his complaint, instead of immediately moving to compel arbitration either in this court or in the District Court Action, the Hotel Defendants actively sought a determination of the merits of those claims as further discussed above.

In addition, and notwithstanding the Hotel Defendants’ ostensible knowledge of a right to arbitrate under the terms of the Employee Agreement and the Acknowledgment of Agreement, the existence of an agreement to arbitrate was not raised with Rubio’s counsel until December 12, 2024, after the Hotel Defendants had engaged in the litigation conduct further described above. (See Jan. 24, 2025, Bachert Decl., ¶ 19.) Under the totality of the circumstances present here, the actions of the Hotel Defendants do not constitute a timely demand for arbitration and are not consistent with their claimed right to arbitrate. For these and all reasons discussed above, the court finds that the Hotel Defendants have waived their right to arbitrate the claims alleged by Rubio in this action. Therefore, the court will deny the arbitration motion.