Isabelle Franklin v. Cmty. Regl Med. Ctr. ( 2021 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ISABELLE FRANKLIN, No. 19-17570
Plaintiff-Appellant,
D.C. No.
v. 1:19-cv-00709-
SKO
COMMUNITY REGIONAL MEDICAL
CENTER, FKA Fresno Community OPINION
Hospital and Medical Center,
Defendant-Appellee,
and
COMMUNITY MEDICAL CENTERS, INC.,
Defendant.
Appeal from the United States District Court
for the Eastern District of California
Sheila K. Oberto, Magistrate Judge, Presiding
Argued and Submitted October 22, 2020
Honolulu, Hawaii
Filed May 21, 2021
Before: J. Clifford Wallace, Carlos T. Bea, and
Mark J. Bennett, Circuit Judges.
Opinion by Judge Bennett
2 FRANKLIN V. CMTY. REG’L MED. CTR.
SUMMARY *
Arbitration
The panel affirmed the district court’s order granting
defendant’s motion to compel arbitration of wage-and-hour
claims brought by a nurse under the Fair Labor Standards
Act and California law.
Plaintiff signed a Mediation and Arbitration Policy and
Agreement with the staffing agency for which she worked.
She also signed a Travel Nurse Assignment Contract with
the staffing agency, establishing the terms of her assignment
to work at defendant Community Regional Medical Center’s
hospital. The Assignment Contract also included an
arbitration provision.
The panel held that the defendant Hospital, a
nonsignatory, could compel arbitration because plaintiff’s
claims against the Hospital were intimately founded in and
intertwined with her contracts with the staffing agency.
Thus, under California law, plaintiff was equitably estopped
from avoiding the arbitration provisions of her employment
contracts.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
FRANKLIN V. CMTY. REG’L MED. CTR. 3
COUNSEL
David C. Leimbach (argued) and Carolyn H. Cottrell,
Schneider Wallace Cottrell Konecky LLP, Emeryville,
California, for Plaintiff-Appellant.
Andrew M. Paley (argued), Kiran Aftab Seldon and
Geoffrey C. Westbrook, Seyfarth Shaw LLP, Los Angeles,
California, for Defendant-Appellee.
OPINION
BENNETT, Circuit Judge:
Plaintiff Isabelle Franklin appeals from the district
court’s order granting defendant Community Regional
Medical Center’s motion to compel arbitration of Franklin’s
claims for statutory hour and wage violations. We have
jurisdiction pursuant to 9 U.S.C. § 16(a)(3), and we affirm.
I.
Franklin is a nurse who works on assignment. She was
employed by a staffing agency, United Staffing Solutions,
Inc. (USSI), with whom she signed a Mediation and
Arbitration Policy and Agreement (Arbitration Agreement).
The Arbitration Agreement requires Franklin and USSI to
arbitrate “all disputes that may arise out of or be related to
[Franklin’s] employment, including but not limited to the
4 FRANKLIN V. CMTY. REG’L MED. CTR.
termination of [Franklin’s] employment and [Franklin’s]
compensation.” 1
In late 2017, USSI assigned Franklin to work at
Community Regional Medical Center’s hospital (the
Hospital) in Fresno, California. Franklin signed a Travel
Nurse Assignment Contract (Assignment Contract) with
USSI establishing the terms of her assignment. The
Assignment Contract sets Franklin’s hourly wages, her
overtime rate, the length of her shifts, and USSI’s
reimbursement policies. It explains that overtime will be
paid “as dictated by Hospital policy and/or State Law,” but
any overtime “must be approved by USSI prior to working.”
The Assignment Contract also includes an arbitration
provision for “any controversy or claim arising under
federal, state, and local statutory or common or contract law
between United Staffing Solutions, Inc. and [Franklin]
involving the construction or application of any of the terms,
provisions, or conditions of the [Assignment Contract].”
The Hospital is not a signatory to either the Arbitration
Agreement or the Assignment Contract, and there is no
contract between Franklin and the Hospital. There is also no
contract between the Hospital and USSI. Instead, the
Hospital contracts with a managed service provider,
Comforce Technical Services, Inc. (“RightSourcing”) to
source contingent nursing staff like Franklin.
RightSourcing, in turn, contracts with USSI to provide the
contingent nursing staff for the Hospital.
Under this arrangement, the Hospital retains supervision
over the contingent nursing staff’s provision of clinical
1
There are certain specifically listed “excluded disputes,” which
are not relevant here.
FRANKLIN V. CMTY. REG’L MED. CTR. 5
services. RightSourcing bills the Hospital and remits
payment to USSI for time worked by contingent nursing
staff. USSI sets the wages of the nursing staff and pays them
accordingly. The contract between RightSourcing and USSI
requires that nursing staff use the Hospital’s timekeeping
system but allows USSI to review the records for any
discrepancies. In that contract, USSI agreed to pay its
employees for any missed meal periods, but also agreed it
would try to collect waivers of second meal periods from its
employees. 2
2
The contract provides:
In California, Supplier Employee must be provided a
thirty (30) minute meal period if he or she works more
than five (5) hours per day. If the total work period
per day is no more than six (6) hours, the meal period
may be waived by mutual consent of Client and
Supplier Employee. A Supplier Employee who works
more than ten (10) hours per day must be provided
with a second meal period of at least thirty (30)
minutes. If the total work period per day is no more
than twelve (12) hours, the second meal period may be
waived by mutual consent but only if the first was not.
A Supplier Employee need not be compensated for a
meal break, if relieved of all work during the period
and allowed to leave Client’s premises.
Supplier will attempt to collect a California Meal
Period Waiver for the second meal period from all
Supplier Employees assigned to Client. If Supplier
Employee refuses to waive second meal period,
Supplier will notify Client and will counsel Supplier
Employee accordingly. Supplier is required to pay the
Supplier Employee for each missed off-duty meal
period, and Client will be billed at the regular hourly
rate. If Supplier Employee abuses the requirement,
Supplier will counsel Supplier Employee and with
6 FRANKLIN V. CMTY. REG’L MED. CTR.
Franklin worked at the Hospital from December 2017 to
January 2018. Franklin then brought a class and collective
action against the Hospital, alleging violations of the Fair
Labor Standards Act (FLSA), the California Labor Code,
and the California Business and Professions Code. The
FLSA claims allege that the Hospital required Franklin to
work during meal breaks and off the clock but failed to pay
her for that work. The California Labor Code claims are
substantially similar to the FLSA claims and, in addition,
allege that the Hospital failed to provide accurate itemized
wage statements to Franklin or reimburse her for travel
expenses incurred during orientation at the Hospital. The
California Business and Professions Code claim alleges
unfair business practices based on the California Labor Code
violations.
The district court granted the Hospital’s motion to
compel arbitration and dismissed Franklin’s claims without
prejudice. The district court held that the Hospital could
compel arbitration as a nonsignatory because Franklin’s
statutory claims against the Hospital were “intimately
founded in and intertwined with” her contracts with USSI.
Thus, under California law, Franklin was equitably estopped
from avoiding the arbitration provisions of her employment
contracts. Franklin timely appealed.
II.
We usually review a district court’s decision about the
arbitrability of claims de novo. Kramer v. Toyota Motor
Corp., 705 F.3d 1122, 1126 (9th Cir. 2013). When the
arbitrability decision concerns equitable estoppel, however,
Client’s consent, cancel Supplier Employee’s
assignment with Client.
FRANKLIN V. CMTY. REG’L MED. CTR. 7
our caselaw has been inconsistent on whether we review the
district court’s decision de novo or for abuse of discretion.
Compare Setty v. Shrinivas Sugandhalaya LLP, 986 F.3d
1139, 1141 (9th Cir. 2021) (reviewing for abuse of
discretion), and Nguyen v. Barnes & Noble Inc., 763 F.3d
1171, 1179 (9th Cir. 2014) (same), with Namisnak v. Uber
Techs., Inc., 971 F.3d 1088, 1094 (9th Cir. 2020) (reviewing
de novo), and Kramer, 705 F.3d at 1126 (same). Because
we reach the same result here under both de novo and abuse
of discretion review, we need not resolve that inconsistency
today and analyze this issue de novo.
III.
“Generally, parties who have not assented to an
arbitration agreement cannot be compelled to arbitrate under
its terms.” Namisnak, 971 F.3d at 1094. But “[t]he United
States Supreme Court has held that a litigant who is not a
party to an arbitration agreement may invoke arbitration
under the FAA if the relevant state contract law allows the
litigant to enforce the agreement.” Kramer, 705 F.3d at
1128 (citing Arthur Andersen LLP v. Carlisle, 556 U.S. 624,
632 (2009)). California law applies here, and it allows a
nonsignatory to invoke arbitration under the doctrine of
equitable estoppel even when a signatory “attempts to avoid
arbitration by suing nonsignatory defendants for claims that
are based on the same facts and are inherently inseparable
from arbitrable claims against signatory defendants.”
Metalclad Corp. v. Ventana Env’t Organizational P’ship, 1
Cal. Rptr. 3d 328, 334 (Ct. App. 2003) (quotation marks and
citation omitted). We look to “the relationships of persons,
wrongs and issues,” and in particular, whether the claims are
“intimately founded in and intertwined with the underlying
contract obligations.” Id. (citation omitted); see also
8 FRANKLIN V. CMTY. REG’L MED. CTR.
Kramer, 705 F.3d at 1128. We do this because, as the court
in Metalclad found:
The doctrine [of equitable estoppel] prevents
a party from playing fast and loose with its
commitment to arbitrate, honoring it when
advantageous and circumventing it to gain
undue advantage. . . . [W]here a party to an
arbitration agreement attempts to avoid that
agreement by suing a “related party with
which it has no arbitration agreement, in the
hope that the claim against the other party
will be adjudicated first and have preclusive
effect in the arbitration[,] [s]uch a maneuver
should not be allowed to succeed . . . .”
1 Cal. Rptr. 3d at 335 (quoting IDS Life Ins. Co. v.
SunAmerica, Inc., 103 F.3d 524, 530 (7th Cir. 1996)); see
also Boucher v. All. Title Co., 25 Cal. Rptr. 3d 440, 447 (Ct.
App. 2005) (“The fundamental point [of equitable estoppel]
is that a party may not make use of a contract containing an
arbitration clause and then attempt to avoid the duty to
arbitrate by defining the forum in which the dispute will be
resolved.”); Turtle Ridge Media Grp., Inc. v. Pac. Bell
Directory, 44 Cal. Rptr. 3d 817, 822 (Ct. App. 2006). Thus,
the question is whether Franklin’s claims against the
Hospital are “intimately founded in and intertwined with”
her employment contract with USSI.
A.
We begin by determining the relevant California law for
analyzing whether a signatory employee’s claim against a
nonsignatory client of the staffing agency is “intimately
founded in and intertwined with” the employment contract.
When the California Supreme Court has not spoken on an
FRANKLIN V. CMTY. REG’L MED. CTR. 9
issue, we are “obligated to follow the decisions of the state’s
intermediate appellate courts,” unless there is “convincing
evidence” that the California Supreme Court would decide
differently. Beeman v. Anthem Prescription Mgmt., LLC,
689 F.3d 1002, 1008 (9th Cir. 2012) (en banc) (citation
omitted). “This is especially true when the supreme court
has refused to review the lower court’s decision.” State
Farm Fire & Cas. Co. v. Abraio, 874 F.2d 619, 621 (9th Cir.
1989).
Here, in the absence of a California Supreme Court case
on point, we must decide whether we are bound to follow the
California Court of Appeal’s published decision in Garcia v.
Pexco, LLC, 217 Cal. Rptr. 3d 793 (Ct. App. 2017). In
Garcia, the California Court of Appeal held that an
employee’s California Labor Code claims against the
staffing agency’s nonsignatory client were “intimately
founded in and intertwined with” his employment contract
with the staffing agency. Id. at 796–97. The California
Supreme Court denied review. Id. at 797. But Franklin
contends that Garcia is an “outlier” case that was wrongly
decided, and thus its holding is not binding on us. We
disagree.
Our review of California law shows that Garcia is not an
“outlier” case. A recent published California Court of
Appeal decision on equitable estoppel in the employment
context, Jarboe v. Hanlees Auto Group, 267 Cal. Rptr. 3d
640 (Ct. App. 2020), discussed Garcia and its holding that a
“nonsignatory[] could compel arbitration based on equitable
estoppel because [plaintiff]’s ‘claims against [the
nonsignatory client] are rooted in his employment
relationship with [the staffing agency].’” Jarboe, 267 Cal.
Rptr. 3d at 651 (quoting Garcia, 217 Cal. Rptr. 3d at 796–
97). The court in Jarboe distinguished but did not disagree
10 FRANKLIN V. CMTY. REG’L MED. CTR.
with Garcia—in fact, it analyzed Garcia together with
Metalclad and Boucher, two cases that we have long
recognized as accurate statements of California law. See
Jarboe, 267 Cal. Rptr. 3d at 650–52; see also Kramer, 705
F.3d at 1129. There are no California decisions inconsistent
with Garcia, and we see no evidence that the California
Supreme Court would reject Garcia’s reasoning.
Franklin also argues that Garcia was wrongly decided
because statutory claims never arise out of or involve the
interpretation of employment agreements, 3 relying on
Narayan v. EGL, Inc., 616 F.3d 895 (9th Cir. 2010), and
Elijahjuan v. Superior Court, 147 Cal. Rptr. 3d 857 (Ct.
App. 2012). But Narayan is not relevant here. In Narayan,
we held that plaintiffs’ claims, which turned on whether they
were employees, did not “arise out of the contract” and
therefore fell outside the scope of the employment contract’s
choice-of-law clause under Texas law. 616 F.3d at 898–99.
That narrow holding on the scope of a contractual clause
(under a different state’s law) has no bearing on the different
question of whether a plaintiff’s claims are “intertwined
3
Garcia rejected this argument:
[Garcia] alleges his claims are based upon statutory
violations, do not sound in contract, and cannot be
deemed part of the arbitration agreement.
[His] argument ignores the fact that a claim “arising
out of” a contract does not itself need to be contractual.
Even though Garcia’s claims are styled as Labor Code
violations, the arbitration agreement applies.
217 Cal. Rptr. 3d at 795–96 (citation omitted).
FRANKLIN V. CMTY. REG’L MED. CTR. 11
with” the employment contract. 4 Similarly, Elijahjuan has
nothing to do with equitable estoppel. In Elijahjuan, the
court considered whether a statutory claim against a
signatory employer fell outside the scope of the arbitration
clause. 147 Cal. Rptr. 3d at 859–60. That scope-of-
arbitration analysis of a claim between two signatories
provides no guidance for whether claims against a
nonsignatory are “intertwined with” the employment
contract. 5
Of course, to compel arbitration of a plaintiff’s claims
against a nonsignatory (as Garcia did), the court must decide
both that (1) the plaintiff is equitably estopped from escaping
the contract, and (2) the claims fall within the scope of the
contract’s arbitration clause. See Garcia, 217 Cal. Rptr. 3d
at 795–97. So Elijahjuan’s scope-of-arbitration analysis
may be relevant to whether a claim against a nonsignatory is
ultimately arbitrated. But in Elijahjuan, the court relied on
the specific terms of the arbitration clause to determine that
4
In addition, the central issue in Narayan was whether plaintiffs
were employees—a question answered by California’s multi-factor
Borello test, not the contract’s terms. 616 F.3d at 899–904. In fact, we
acknowledged that “the contracts will likely be used as evidence to prove
or disprove the statutory claims.” Id. at 899. Besides, California courts
have continued to compel arbitration of California Labor Code claims.
See Khalatian v. Prime Time Shuttle, Inc., 188 Cal. Rptr. 3d 113, 119
(Ct. App. 2015).
5
The scope-of-arbitration and equitable estoppel inquiries are
distinct. See Garcia, 217 Cal. Rptr. 3d at 795–96 (discussing whether
the plaintiff’s claims fell outside the scope of arbitration separately from
the equitable estoppel analysis). The equitable estoppel inquiry asks
whether it is fair to saddle the plaintiff with the contract’s obligations
(under the “intimately founded in and intertwined with” test). The
scope-of-arbitration inquiry asks whether the contract’s obligations
include arbitration of the plaintiff’s claims.
12 FRANKLIN V. CMTY. REG’L MED. CTR.
the statutory claims were outside the scope of the agreement.
147 Cal. Rptr. 3d at 864 (“The arbitration provision in this
case is . . . narrow and obviously differs from one
encompassing ‘any and all employment-related disputes.’”).
Here, the Arbitration Agreement specifically states that it
encompasses “all disputes,” including those “based on . . .
statute,” whether based on certain enumerated federal and
state statutes, or on “any other state or federal law or
regulation.” Likewise, the arbitration agreement in Garcia
“specifically defined disputes subject to arbitration as
including . . . those regarding . . . state and federal
employment laws and regulation[s].” 217 Cal. Rptr. 3d at
794. The arbitration clause in Elijahjuan had no such
language. See Elijahjuan, 147 Cal. Rptr. 3d at 860 (requiring
arbitration only for disputes “aris[ing] with regard to [the
contract’s] application or interpretation” (emphasis in
original)); cf. Khalatian, 188 Cal. Rptr. 3d at 119
(compelling arbitration of California Labor Code claims
because of “the broad language of the [a]greement”). Thus,
Elijahjuan does not conflict with Garcia or preclude
arbitration of Franklin’s claims. 6
Rather, Garcia is consistent with Ninth Circuit precedent
on equitable estoppel. Although Franklin points out that we
have “never previously allowed a non-signatory defendant
to invoke equitable estoppel against a signatory plaintiff,”
Rajagopalan v. NoteWorld, LLC, 718 F.3d 844, 847 (9th Cir.
2013) (per curiam), neither have we foreclosed that
6
The district court found that Franklin’s claims were “‘expressly
included’ in the scope of [her and USSI’s] agreement to arbitrate.” She
does not otherwise challenge that finding except through her claim that
“statutory wage and hour claims exist independent of employment
agreements,” which we reject.
FRANKLIN V. CMTY. REG’L MED. CTR. 13
possibility. 7 In Kramer, we recognized that equitable
estoppel applies when the plaintiff’s claims rely on the
written agreement, for instance when the claims are
“intimately founded in and intertwined with the underlying
contract obligations.” 705 F.3d at 1129 (quoting Goldman
v. KPMG, LLP, 92 Cal. Rptr. 3d 534, 543 (Ct. App. 2009)).
We have consistently reiterated this rule in later cases that
have considered a nonsignatory defendant’s attempt to
invoke equitable estoppel against a signatory plaintiff. See,
e.g., Murphy v. DirecTV, Inc., 724 F.3d 1218, 1230 (9th Cir.
2013); In re Henson, 869 F.3d 1052, 1060 (9th Cir. 2017)
(per curiam). Each time, we have declined to require
arbitration because the specific facts did not suggest the
plaintiffs’ claims were “intimately founded in and
intertwined with” the arbitration contract. Kramer, for
example, involved claims by consumers, who had arbitration
agreements with a retailer, against a nonsignatory
manufacturer for product defects. 705 F.3d at 1125–26; cf.
Murphy, 724 F.3d at 1230 (consumer claims against
nonsignatory retailer); In re Henson, 869 F.3d at 1061
(similar). None of our previous cases have involved staffing
agencies, and the relationship between employees (like
nurses), staffing agencies, and clients (like hospitals) bears
little resemblance to the relationship between consumers and
participants in the supply chain (like manufacturers). 8
7
In fact, it is no longer true that we have never applied equitable
estoppel to compel arbitration of a plaintiff’s claims against a
nonsignatory. See In re Pac. Fertility Ctr. Litig., 814 F. App’x 206, 209
(9th Cir. 2020).
8
Our other equitable estoppel cases take place in similarly
inapposite contexts. See Rajagopalan, 718 F.3d at 846–48 (finding
claims against payment processing company were not intertwined with
contract with debt servicing provider); Mundi v. Union Sec. Life Ins., 555
F.3d 1042, 1044, 1047 (9th Cir. 2009) (finding claims related to life
14 FRANKLIN V. CMTY. REG’L MED. CTR.
Garcia simply applies a rule that we have (necessarily) long
recognized—that equitable estoppel applies to claims
“intimately founded in and intertwined with” an underlying
contract—to different facts.
Even if we had doubts about how Garcia fits within our
circuit’s caselaw, principles of federalism and comity weigh
strongly in favor of following Garcia. The same
considerations that drove the Supreme Court’s decision in
Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), exist
here. Arbitration agreements are contracts, and the Federal
Arbitration Act does not “purport[] to alter background
principles of state contract law regarding the scope of
agreements (including the question of who is bound by
them).” Arthur Andersen, 556 U.S. at 630. Thus, in
applying state law here, we embody Erie by “follow[ing] the
decisions of intermediate state courts in the absence of
convincing evidence that the highest court of the state would
decide differently.” Stoner v. N.Y. Life Ins. Co., 311 U.S.
464, 467 (1940). We have no convincing evidence that the
California Supreme Court (which denied review in Garcia)
would reject Garcia’s reasoning. 9 We have no competing
California Court of Appeal decisions that conflict with
Garcia. If we declined to follow Garcia in this situation, we
would place our court in the inappropriate position of
independently determining the meaning of California
insurance policy covering a loan were not intertwined with the loan
itself).
9
Although Franklin argues that some federal district courts have
disagreed with Garcia’s result, “[t]he opinions of other federal [district]
judges on a question of state law do not constitute convincing evidence
that the state supreme court would decide an issue differently.” Ryman
v. Sears, Roebuck & Co., 505 F.3d 993, 995 n.1 (9th Cir. 2007)
(quotation marks, citation, and alteration omitted).
FRANKLIN V. CMTY. REG’L MED. CTR. 15
contract law. We would also create a divide between how
our circuit and California courts apply equitable estoppel,
leading to the “classic pre-Erie problems of forum shopping
and inconsistent enforcement of state law.” Beeman, 689
F.3d at 1005. This we cannot do. Erie, 304 U.S. at 74–78.
Accordingly, we follow the California Court of Appeal’s
decision in Garcia.
B.
The court in Garcia found that the plaintiff’s statutory
claims were “intimately founded in and intertwined with” his
employment relationship on these facts: The plaintiff signed
an arbitration agreement with a staffing agency and was then
assigned to work for the staffing agency’s client, who was a
nonsignatory to the arbitration agreement. Garcia, 217 Cal.
Rptr. 3d at 794. The plaintiff alleged that the staffing agency
and the client had deprived him of meal breaks and rest
periods, failed to record his meal breaks properly, and did
not pay him for overtime work, among other grievances. Id.;
see also First Am. Class Action Compl. at 4, Garcia, 217
Cal. Rptr. 3d 793 (No. G052872), 2015 WL 10738717.
Based on these allegations, the plaintiff sued both the
staffing agency and the client as joint employers for
violating the California Labor Code and sought recovery of
the wages to which he was entitled. Garcia, 217 Cal. Rptr.
3d at 794–95; First Am. Class Action Compl. at 5–9, Garcia,
217 Cal. Rptr. 3d 793 (No. G052872).
The facts here are like those in Garcia. Franklin signed
two arbitration agreements with USSI and was then assigned
to work for USSI’s client, the Hospital—a nonsignatory to
the arbitration agreements. Franklin alleges that the Hospital
failed to give her proper meal breaks, pay her for off-the-
clock work, provide accurate wage statements, or reimburse
her for expenses she incurred during her orientation. Like
16 FRANKLIN V. CMTY. REG’L MED. CTR.
the plaintiff in Garcia, Franklin also brings statutory claims
against the Hospital under the California Labor Code (and
similar claims under the FLSA) to recover wages she claims
she is entitled to.
It does not matter that Franklin’s allegations are leveled
only at the Hospital and not USSI. Although the court in
Garcia cited the plaintiff’s decision to allege that the staffing
agency and the client were jointly responsible for the
statutory violations, 217 Cal. Rptr. 3d at 797, that was not an
invitation for litigants and their lawyers to plead around
equitable estoppel. In matters of equity, such as the
application of equitable estoppel, it is the substance of the
plaintiff’s claim that counts, not the form of its pleading. See
Copp v. Millen, 77 P.2d 1093, 1096 (Cal. 1938) (“Equity
always looks to the substance, and not to the form . . . .”).
For the same reason, Franklin cannot avoid arbitration
simply because she has sued only the Hospital and not USSI.
Cf. Goldman, 92 Cal. Rptr. 3d at 547 (discussing Grigson v.
Creative Artists Agency, L.L.C., 210 F.3d 524 (5th Cir.
2000), where the Fifth Circuit described an action against
only nonsignatories as “a quite obvious, if not blatant,
attempt to bypass the agreement’s arbitration clause,” id. at
530). Instead, we look at whether the substance of
Franklin’s claims against the Hospital is so intertwined with
her employment contract with USSI that it would be unfair
for Franklin to avoid arbitration.
The thrust of Franklin’s claims is that she is owed wages
(and overtime) for unrecorded time that she worked. For
example, she alleges that she was required to “remain on
duty” during her meal and rest breaks, and as a result
“routinely performed work during her entire shift.” Yet she
was not paid for the time she worked during her breaks.
Similarly, Franklin alleges that she “performed work while
FRANKLIN V. CMTY. REG’L MED. CTR. 17
‘off-the-clock’ with [the Hospital]’s knowledge and was
denied compensation for the time she spent engaged in this
work.” The court in Garcia found these types of claims were
intertwined with the employment relationship with the
staffing agency, and we do likewise. We analyze Franklin’s
claims by looking at the relationship between the parties and
their connection to the alleged violations. Metalclad, 1 Cal.
Rptr. 3d at 334. In doing so, we find that Franklin’s
employment with USSI is central to her claims. The record
shows that USSI was responsible for seeking meal period
waivers and compensating Franklin for missed meal breaks,
as well as making Franklin available for orientation at the
Hospital that she alleges was “off-the-clock” work. Even if
Franklin is correct that the Hospital violated its statutory
obligations by, for example, “alter[ing] the time records to
show a meal period that was never taken,” or “requir[ing]
[Franklin] to perform substantial work off-the-clock and
without compensation,” USSI was responsible for reviewing
the timekeeping records and raising any discrepancies with
the Hospital. Although Franklin omits any mention of USSI
from her complaint, the substance of her claims is rooted in
her employment relationship with USSI, which is governed
by the Arbitration Agreement. 10 See Garcia, 217 Cal. Rptr.
3d at 796.
Moreover, Franklin’s claims depend on whether she was
paid the wages or overtime she was due, see, e.g., 29 U.S.C.
10
We have distinguished between an employment relationship and
an employment agreement in declining to compel arbitration. Yang v.
Majestic Blue Fisheries, LLC, 876 F.3d 996, 1002–03 (9th Cir. 2017),
abrogated on other grounds by GE Energy Power Conversion Fr. SAS,
Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637 (2020). But
here there is both an employment agreement with an arbitration clause
(the Assignment Contract) and a separate Arbitration Agreement
covering Franklin’s employment with USSI generally.
18 FRANKLIN V. CMTY. REG’L MED. CTR.
§ 207(a)(1), but she does not dispute that USSI, not the
Hospital, was responsible for paying her. Not only did the
Assignment Contract set her hourly wage rate and overtime
rate, but it also set the regular length of her shifts, the time
her shifts started and ended, and the number of hours in her
workweek. And under the contract, USSI would pay all
overtime “as dictated by Hospital policy and/or State Law,”
subject to USSI pre-approval. It is true that Franklin could
hypothetically sustain her claims even if there were no
Assignment Contract, but in that case a factfinder would still
need information about how and whether Franklin was paid
by USSI. Here, that necessary information is established by
the terms of her Assignment Contract. Thus, we agree with
the district court that “whether [Franklin] can maintain
liability against the Hospital[,] given USSI’s role as [her]
employer, cannot be answered without reference to the
Assignment Contract.”
Finally, Franklin’s other claims—that the Hospital failed
to provide her accurate wage statements or reimburse her
travel expenses—cannot stand on their own against the
Hospital. For example, she alleges that the Hospital “do[es]
not provide timely, accurate itemized wage statements” and
“often promise[s] to reimburse [her] for . . . travel expenses,
but often fails to do so.” But the Assignment Contract sets
out USSI’s payroll duties and the amount of Franklin’s travel
reimbursement. Therefore, these claims are not “fully viable
without reference to the terms of [the Assignment
Contract].” Goldman, 92 Cal. Rptr. 3d at 551.
Accordingly, Franklin’s claims against the Hospital are
“intimately founded in and intertwined with” her
employment contract with USSI. We thus hold that Franklin
FRANKLIN V. CMTY. REG’L MED. CTR. 19
is equitably estopped from avoiding arbitration of her claims
against the Hospital. 11
AFFIRMED.
11
Because we agree with the district court that the Hospital can
compel arbitration under the doctrine of equitable estoppel, we need not
and do not reach the issue of whether the Hospital can also compel
arbitration under the theory that it is an agent of USSI.