This is an action under the Private Attorneys General Act (“PAGA”) and the Unfair Competition Law (“UCL”) arising from defendants Google LLC, Google Inc., and Alphabet, Inc.’s (collectively, “Google”) alleged practice of recruiting diverse candidates by misrepresenting the nature of the job they will perform if they are hired, along with its imposition of unlawful confidentiality agreements and other policies on employees.
Before the Court is plaintiff’s motion to lift the stay pending arbitration of the first, second, and eleventh causes of action. Google opposes plaintiff’s motion in large part, urging that the stay should be lifted for the limited purpose of finalizing the pleadings but should otherwise remain in place until certain conditions are satisfied.
I. Allegations of the Operative Complaint
According to the First Amended Complaint (“FAC”), plaintiff had a successful career with Caterpillar, Inc. in Illinois from 2006 until 2015, when he left to care for his ill sister. (FAC, ¶¶ 13-14.) His last position at Caterpillar was Senior Business Relationship Manager. (Id. at ¶ 13.) After his sister passed away in 2016, plaintiff returned to the labor market and received interest from numerous employers, including an offer with a substantial salary and a relocation package. (Id. at ¶¶ 14-15, 20.)
At the urging of a Google manager, plaintiff applied for a job at Google as a Partner Operations Manager in the gTech department. (FAC, ¶ 16.) His resume made his prior experience as a Business Relationship Manager clear, and in response to plaintiff’s questions, interviewers and a recruiter stated that the job duties of the Partner Operations Manager role would be consistent with plaintiff’s expertise as a Business Relationship Manager. (Id. at ¶¶ 16-19.) In reliance on these statements, as well as Google’s omissions about the actual nature of the Partner Operations Manager role, plaintiff accepted the offer from Google, foregoing other opportunities and moving to California, leaving a second, disabled sister behind in Illinois. (Id. at ¶ 21.)
As a condition of employment with Google, plaintiff was required to sign an “At-will Employment, Confidential Information, Invention Assignment and Arbitration Agreement,” which contains several provisions that he contends are unlawful. (FAC, ¶¶ 22-28.) Furthermore, plaintiff learned during his orientation in early August of 2016 that his new duties would comprise providing technical support to Google customers. (Id. at ¶¶ 29-30.) Contrary to his offer letter, he was assigned a job title of “Senior Solutions Consultant,” which is not equivalent to a Business Relationship Manager or even a Partner Operations Manager. (Id. at ¶ 31.) When he complained to his superior within days of being hired, his superior told him not to worry because Google was “newly committed” to hiring and retaining African-Americans and would therefore try to find him a different job that was a better fit. (Id. at ¶ 32.)
At the end of August 2016, plaintiff met with his superiors and a Human Resources professional, who explained that Google does not have a Business Relationship Manager role on the gTech team. (FAC, ¶ 33.) Instead, plaintiff was hired pursuant to a new pilot program
called “Chameleon,” in which Google would hire individuals as Partner Operations Managers without knowing what they would actually do when they arrived or if there was even an open position available. (Ibid.) Once hired, Google would assign these individuals an available job—in plaintiff’s case, the Solutions Consultant role. (Ibid.) Plaintiff explained that he accepted Google’s offer of employment and moved to California to work in a Business Relationship Manager position, not as a Solutions Consultant, but was informed that if he did not find another role within Google within 30 days, he would have to remain on the gTech team as a Solutions Consultant. (Id. at ¶¶ 33-34.) While plaintiff attempted to find an appropriate role at Google, he was unsuccessful due to Google’s general practices of prohibiting a role change within the first year of employment and prohibiting a change in “grade level,” which was necessary for plaintiff to work in a job similar to a Business Relationship Manager role. (Id. at ¶ 35.)
In October 2016, plaintiff’s disabled sister suffered a setback and he was permitted to work out of Google’s Chicago office to care for her. (FAC, ¶ 36.) While in Chicago, he learned of another opportunity as a “strategic negotiator” for Google’s data center team and interviewed for the position. (Id. at ¶ 37.) Although it appeared he would be offered the position, he was advised in February 2017 that he was required to return to Mountain View, a requirement that was not imposed on a younger, white Solutions Consultant on his team. (Id. at ¶ 38.) Upon his return to Mountain View, plaintiff was placed on a “Performance Expectation Plan” and then a “Performance Improvement Plan,” with Google citing behavior that described a stereotypical “angry black man,” but for which non-blacks were not disciplined. (Id. at ¶¶ 39-46.)
On May 8, 2017, plaintiff went on leave. (FAC, ¶ 47.) Google initially denied his request for protected leave under the Family and Medical Leave Act (“FMLA”) and California Family Rights Act (“CFRA”) and only approved his leave after he signed a release allowing Google and others to access all of his medical information. (Id. at ¶ 47.) Plaintiff contends that this violates the FMLA, CFRA, the California constitution, and other laws. (Id. at ¶¶ 48- 49.)
Based on these allegations, plaintiff asserts claims under PAGA for (1) fraud in violation of Labor Code section 970, (2) retaliation in violation of Labor Code section 1102.5(b), (3) unlawful confidentiality agreement in restraint of trade in violation of Labor Code section 432.5, (4) unlawful confidentiality agreement with no Federal Defend Trade Secrets Act notice in violation of Labor Code section 432.5, (5) illegal harassment release in violation of Labor Code section 432.5, (6) prohibition on engaging in lawful conduct during non-work hours in violation of Labor Code sections 96(k) and 98.6, (7) violations of Labor Code sections 232 and 1197.5(k) by prohibiting employees from disclosing information about their wages, (8) violation of Labor Code section 232.3 by prohibiting employees from disclosing information about their working conditions, (9) violation of Labor Code section 1102.5(a) by preventing employees from disclosing information about suspected violations of the law, (10) Labor Code violations arising from Google’s Code of Conduct, and (12) unlawful medical release forms in violation of Labor Code section 432.5. Plaintiff also asserts an eleventh cause of action for unfair competition, in which he seeks a public injunction enjoining Google from (1) misleading candidates to induce them to move for a job at Google in violation of Labor Code section 970; (2) retaliating against whistleblowers in violation of Labor Code section 1102.5(a); and (3) requiring employees to sign its medical release as a condition of receiving leave, and from obtaining or sharing their medical records pursuant to the release.
II. Procedural Background
At a mediation on March 22, 2018, the parties reached a settlement of plaintiff’s PAGA and UCL claims related to the medical release he signed in connection with his leave. The Court granted the parties’ motion for approval of that settlement in an order filed on October 29, 2018.
In August of 2018, the parties submitted a stipulated order addressing which of plaintiff’s remaining claims should proceed to arbitration and which should be heard by the Court. The parties agreed that the arbitration provision governing plaintiff’s employment permits the arbitrator to enter a public injunction and that plaintiff’s eleventh cause of action under the UCL should proceed to arbitration insofar as it arises from Labor Code sections 970 and 1102.5(b). They disagreed regarding the proper treatment of the PAGA causes of action. Plaintiff stated that he would move to compel arbitration of the first and second causes of action, while Google intended to seek a stay of the third through tenth causes of action in favor of a related PAGA case filed by plaintiff’s counsel, Doe v. Google (Super. Ct. S.F. City and County, No. CGC-16-556034) (hereinafter, “Doe”). The Court signed the stipulation, ordering that the eleventh cause of action be submitted to arbitration as it relates to the claims under Labor Code sections 970 and 1102.5(b). It subsequently denied plaintiff’s motion to compel arbitration and granted Google’s motion to stay the first and second causes of action pending arbitration and its motion to stay the third through tenth causes of action in light of Doe. Cassel demanded arbitration with JAMS and an arbitrator was appointed on January 9, 2019.
Meanwhile, on June 27, 2018, a partial PAGA settlement was approved in Doe. The settlement concerned defendants’ former practice of requiring employees to sign an “Adult Content Liability Release,” which is the subject of plaintiff’s fifth cause of action. Plaintiff stipulated to dismiss this claim with prejudice. Doe remains pending on appeal, and plaintiff does not ask the Court to lift the stay of the third through tenth causes of action now.
The motion before the Court arises from a change in Google’s arbitration policy. In early 2019, Google announced that it would no longer enforce arbitration agreements against current employees with regard to employment disputes and formally waived its right to do so. The parties met and conferred in light of this announcement and agreed that Cassel was no longer required to arbitrate his claims. They advised the arbitrator that the arbitration should be closed without a determination on the merits, and he issued an order to that effect on April 26, 2019.
The parties agree that the first, second, and eleventh causes of action should proceed in this Court now that the arbitration has been closed. However, they dispute the extent to which the stay should be lifted at this time, as well as related issues concerning management of the case.
Code of Civil Procedure section 1281.4 provides for a stay of pending litigation while a related arbitration is proceeding. “Once a stay is granted the trial court retains vestigial powers over the matters submitted to arbitration, including the power to rule on a petition to confirm, correct, or vacate an award.” (Cinel v. Christopher (2012) 203 Cal.App.4th 759, 769.) This
vestigial jurisdiction “consists solely of making the determination, upon conclusion of the arbitration proceedings, of whether there was an award on the merits (in which case the action at law should be dismissed because of the res judicata effects of the arbitration award) or not (at which point the action at law may resume to determine the rights of the parties).” (Ibid., internal citations and quotations omitted.) Where the arbitration is terminated without a determination on the merits, the stay is terminated and the matter proceeds to trial in court. (See ibid.)
Here, the parties agree that the stay should be lifted at some point and to some degree. However, Google contends that before the stay is lifted, plaintiff should be required to present it with a proposed Second Amended Complaint (“SAC”) including all of the claims that he intends to pursue in this action. It further urges that discovery should remain stayed pending resolution of the pleadings, including Google’s likely demurrer to claims newly asserted in the SAC. In particular, Google contends that “[t]he Court should not lift the stay to allow Cassel to pursue a preliminary injunction,” which he has indicated that he intends to seek.
The Court agrees that the first order of business should be updating the complaint to reflect the claims and theories that plaintiff intends to pursue now that this action is back from arbitration. However, given the age of the case and plaintiff’s apparent intent to move for a preliminary injunction, it will not extend the discovery stay beyond the time at which the SAC is filed. Accordingly, the parties shall continue to discuss a potential stipulation to the filing of the SAC, and they shall also meet and confer regarding the sequence and timing of discovery in the case. While the Court does not intend to issue any order phasing discovery, the parties are encouraged to consider focusing their initial efforts on any discovery needed to resolve plaintiff’s potential motion for a preliminary injunction, if he still intends to file one in the near future. The Court expresses no opinion on the merits of that motion at this time: while it notes Google’s objections on that subject, it finds no basis to prevent or unduly delay plaintiff from bringing his motion. If a stipulation is not achieved, plaintiff shall promptly move for leave to file the SAC so that the case may proceed.
IV. Conclusion and Order
Plaintiff’s motion is GRANTED IN PART as follows. The stay of the first, second, and eleventh causes of action pending arbitration is lifted; however, discovery shall remain stayed until the SAC is filed or until further order of the Court. The parties shall continue to discuss a potential stipulation to the filing of the SAC, and they shall also meet and confer regarding the sequence and timing of discovery in the case, particularly if any discovery will be needed to resolve a motion for a preliminary injunction. If a stipulation is not achieved, plaintiff shall promptly move for leave to file the SAC.
The motion is DENIED in all other respects.
The Court will prepare the order.