1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DAVION LOUIS, Case No. 24-cv-03011-JD

8 Plaintiff,

ORDER RE ARBITRATION

v. 9

10 TPG FUNDING, LLC, et al., Defendants. 11

12 13 Plaintiff Davion Louis filed a lawsuit against a former employer, defendants TPG Funding, 14 LLC, TPG Inc., and Does 1-5 (collectively TPG), in connection with a “separation agreement” he 15 and TPG executed in July 2022. Dkt. No. 12 (FAC) ¶ 9. Louis alleges that TPG breached the 16 agreement by failing to pay him and falsely accusing him of “transmitting confidential information 17 belonging to” TPG. Id. ¶¶ 10-11. He seeks damages for breach of contract, waiting-time penalties 18 under California state law on the ground that the monies owed pursuant to the agreement were 19 “wages,” and a declaratory judgment that a “forfeiture provision” in the agreement is void and 20 unenforceable. Id. ¶¶ 11, 13, 16-20, 22, 25-26. 21 After the case was transferred from the Central District of California, Dkt. No. 20, TPG 22 moved to compel the arbitration of Louis’s claims pursuant to an arbitration clause in the 23 separation agreement, Dkt. No. 23. Louis timely opposed, Dkt. No. 34, and the Court took the 24 matter under submission, Dkt. No. 36. Arbitration is denied. 25 LEGAL STANDARDS 26 The parties do not dispute the arbitration demand in the separation agreement is governed 27 by the Federal Arbitration Act (FAA), Pub. L. No. 68-401, 43 Stat. 833. The Court has discussed 1 Glob. Staffing, Inc., No. 22-cv-02436-JD, 2022 WL 4960666, at *2 (N.D. Cal. Oct. 3, 2022); 2 Williams v. Eaze Sols., Inc., 417 F. Supp. 3d 1233, 1238-39 (N.D. Cal. 2019). In pertinent part, 3 “[u]nder Section 4 of the FAA, the Court’s role ‘is limited to determining whether a valid 4 arbitration agreement exists and, if so, whether the agreement encompasses the dispute at issue.’” 5 Rodriguez v. Twitter, Inc., 671 F. Supp. 3d 1028, 1031 (N.D. Cal. 2023) (quoting Lifescan, Inc. v. 6 Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004)). “Unless the parties provide 7 otherwise, the validity and scope of an agreement to arbitrate are determined by the Court,” id., 8 and “state-law principles of contract formation and interpretation” apply, Suski v. Coinbase, Inc., 9 55 F.4th 1227, 1230 (9th Cir. 2022), aff’d by 602 U.S. 143 (2024). “Any doubts about the scope 10 of arbitrable issues should be decided in favor of arbitration.” Williams, 417 F. Supp. 3d at 1239. 11 Under California law, “the mutual intention of the parties at the time the contract is formed 12 governs the interpretation.” Hartford Cas. Ins. Co. v. Swift Dist., Inc., 59 Cal. 4th 277, 288 (2014) 13 (quoting Cal. Civ. Code § 1636). To that end, the Court must “look first to the language of the 14 contract in order to ascertain its plain meaning or the meaning a layperson would ordinarily attach 15 to it.” Id. (citation omitted); see Cal. Civ. Code § 1638 (“The language of a contract is to govern 16 its interpretation, if the language is clear and explicit, and does not involve absurdity.”). The 17 Court considers “the clear and explicit meaning of the[] provisions, interpreted in their ordinary 18 and popular sense, unless used by the parties in a technical sense or a special meaning is given to 19 them by usage.” Hartford, 59 Cal. 4th at 288 (cleaned up) (quoting AIU Ins. Co. v. Superior 20 Court, 51 Cal. 3d 807, 822 (1990)). 21 DISCUSSION 22 The arbitration clause of the separation agreement provides, Dkt. No. 23-1 at ECF 9:

23 Any disputes between the Company and you arising out of or related to your employment with the Company, the termination of 24 your employment thereof, or pay and benefits will be resolved in a binding arbitration. The venue of such arbitration will be in San 25 Francisco County, California. Any disputes related to this Agreement are not included and can be adjudicated in a Court of Law or through 26 alternative dispute resolution in the filing party’s sole discretion. 27 Louis’s claims plainly come within the scope of the “related to this Agreement” carveout 1 Cal. 4th at 288 (quotation omitted). “Agreement,” as used in the arbitration clause, is 2 contractually defined to refer to the separation agreement, Dkt. No. 23-1 at ECF 4, and Louis’s 3 claims are based on TPG’s alleged breach of the separation agreement by refusing to pay certain 4 monies it provided for, FAC ¶¶ 9, 12, 15-21; see Dkt. No. 23-1 at ECF 5 (setting forth “Severance 5 Pay”). There is no doubt that a dispute over those unpaid monies “relate[s] to” the “Agreement” 6 since he is alleging a breach of, and seeking damages pursuant to, the “Agreement.” Dkt. No. 23- 7 1 at ECF 9. 8 TPG’s efforts to sidestep the plain language of the arbitration clause are unavailing. TPG 9 says that, because Louis’s claims are based on allegations about improper data use, his 10 termination, and TPG’s withholding of employment benefits, the claims are covered by the first 11 sentence in the arbitration clause. Dkt. No. 23 at 5. The problem for TPG is that this ignores the 12 plain text of the carveout and the language of the FAC’s allegations. Moreover, TPG’s focus on 13 whether there are “allegations” about his employment, see Dkt. No. 35 at 3 (“Plaintiff’s FAC 14 makes affirmative allegations regarding his ongoing employment . . . .”), is misplaced. The salient 15 question is whether the complaint advances a “dispute[]” that is included in or carved out from the 16 general agreement to arbitrate, Dkt. No. 23-1 at ECF 9. That Louis contends the monies he was 17 owed under the agreement, and on which he seeks damages, are also “wages” under the California 18 Labor Code, FAC ¶¶ 12, 21-22, does not change the nature of that inquiry. TPG suggests that 19 construing the arbitration clause this way would “render[] illusory” Louis’s promise to arbitrate 20 disputes “arising out of or related to” his employment. Dkt. No. 35 at 1. Not so, as there are a 21 significant number of employment- or pay-related disputes Louis could have had with TPG that 22 would having nothing to do with the separation agreement. 23 TPG also argues that the carveout “may” refer to disputes like the one set forth in Louis’s 24 claim for declaratory relief -- i.e., disputes about the validity of the separation agreement itself or 25 portions thereof. See Dkt. No. 23 at 6; Dkt. No. 35 at 2, 4 n.1. The text of the agreement does not 26 say “[a]ny disputes related to this Agreement’s validity.” See Williams, 417 F. Supp. 3d at 1241 27 (arbitration clause providing that “any dispute, claim or controversy arising out of or relating to 1 187498, at *2 (N.D. Cal. Jan. 13, 2023) (discussing cases where arbitration clauses contained 2 || delegation clauses that expressly or adequately made questions of validity arbitrable). The Court 3 sees no good reason to add that limitation, and TPG certainly has not provided one. See Cal. Civ. 4 || Code § 1638 (“The language of a contract is to govern its interpretation, if the language is clear 5 and explicit.”). Moreover, on TPG’s reading, it is not at all clear why even that dispute would not 6 || be covered by the first sentence in the arbitration clause, given that the separation agreement “‘sets 7 || forth the terms of... employment through the Transition Period.” Dkt. No. 23-1 at ECF 4. At no 8 || point does TPG explain what it thinks is a dispute covered by the carveout, and the Court declines 9 to read the carveout into superfluity. See Cal. Civ. Code § 1641 (“The whole of a contract is to be 10 || taken together, so as to give effect to every part.”’). 11 TPG mentions some cases for the proposition that “the inclusive language of the arbitration 12 || clause is unequivocally broader as a matter of law than the carveout.” Dkt. No. 35 at 2-3. Maybe 5 13 so, but it does not follow that the scope of the carveout should be restricted more severely and 14 || narrowly than “the meaning a layperson would ordinarily attach to it.” Hartford, 59 Cal. 4th at 15 || 288 (citation omitted). Consequently, the “plain and ordinary” meaning of the carveout 16 || unambiguously captures the claims Louis alleges in his complaint, id. (citation omitted), and TPG 3 17 has not advanced any persuasive basis for concluding otherwise. 18 CONCLUSION 19 The motion to compel the arbitration of Louis’s claims is denied. The parties are directed 20 || to file by April 8, 2025, a joint statement proposing a case-management schedule and identifying 21 whether the parties wish to engage in private mediation or go through the Court’s ADR process. 22 || Ifthe parties elect for private mediation, the statement should also identify a mutually agreed-on 23 private mediator. 24 IT IS SO ORDERED. 25 Dated: March 19, 2025 26 27 28 JAMYf DONATO Unitg4 States District Judge