1] ALLEN MATKINS LECK GAMBLE. MALLORY & NATSIS LLP 2| BALDWIN J. LEE (BAR NO. 187413) STOR (BAR NO. 202795) CONFORMED coPY 3 x0 Center, 12th Floor supe inne FLED. ‘A. 94111-4074 “Bounty ottos Anco 4 515 -_ i 5 | E-Mail: blee@@allenmatkins.com dan 1820 anestor@allenmatkins.com Sherr R, Caner, Bxcenive Oftca/Giork 6 ALLEN MATIN GAMBLE, a 7) MALLORY & NATSIS LLP NANCY S. FONG (BAR NO. 217552) 8 | 865 South Figueroa Street, Suite 2800 Los Angeles, Calitornia 90017-2543 9 555 816 10 fong@allenmatkins.com 11 | Attorneys for Defendant SNAP INC, R B SUPERIOR COURT OF THE OF CALIFORNIA 4 FOR THE COUNTY OF LOS ANG By Fax 15 | ANTHONY POMPLIANO, an individual, | Case No. BC643641 16 Plaintiff, ASS 'D FOR ALL PURPOSES TO. Judge Richard ‘ico 17 vs, DEFENDANT'S PETITION TO COMPEL 18 | SNAP INC,, d.b.a. SNAPCHAT, a Delaware | ARBITRATION Corporation: and DOES | through 10, 19 Date: September 22, 2017 Defendants Time: 8:30 a.m. 20 Dept 17 Res ID: 170118188609 21 2 Complaint Filed: January 4, 2017 Trial Date: Not Set 23 ee 25 26 a7 28 | ~~ DERENDANT'S PETITION TO COMPEL ARBITRATION4 tu. 9o}m. 10 ul 12 1B 14 15 16 fv. 28 TABLE OF CONTENTS Page INTRODUCTION. 1 STATEMENT OF FACTS AND PROCEDURAL HISTORY wd A. Statement Of Facts 3 1, Pompliano’s Employment And His Agreement To Arbitrate.... 3 2. Pompliano’s Termination.. B. Procedural History. ARGUMENT A. The Parties! Agrecment Requites Pompliano To Arbitrate His Seetion 1050 Claim a B. The Parties’ Agreement Clearly And Unmistakably Delegates The Question Of Arbitrability To The Arbitrator... C. _ Pompliano Can Show No Excuse To Justify Evasion Of The Agreement : D. The Court Must Stay This Action U: Complete: CONCLUSION @ DEFENDANT'S PETITION TO COMPEL ARBITRATION1. INTRODUCTION Six months ago, Anthony Pompliano initiated an arbitration against Snap Inc. (formerly Snapchat, Inc.), where he worked for three weeks in 2015. That was the appropriate—and indeed the only—venue Pompliano could have chosen, because his arbitration agreement with Snap requires that all controversies related to his employment be submitted to binding arbitration, Now, however, Pompliano has run to court, filing a Complaint that reeycles—often verbatim—the same allegations that he put in his arbitration demand and that he has litigated for half'a year before the arbitrator. Make no mistake: This late-breaking bid for a judicial, and public, forum to air his sensationalist allegations is all about publicity. Its certainly not about the law or the actual written agreement between the parties that (correctly) led Pompliano to file his grievances with an arbitrator in the first place. That is because the agreement unmistakably says that the arbitrator—and the arbitrator alone—is to resolve Pompliano’s contentions: “[AJny and all claims, controversies, or disputes ... relating in any manner to Ei iployee’s hiring, employment, , Will be submitted to final and or termination of employment, whether voluntary or involuntai binding arbitration.” Compl., Ex. A. His newly minted Complaint, which alleges a single cause of action for violating Labor Code Section 1050, is a dispute “relating” to his employment and termination of employment. He therefore must arbitrate it, as he agreed to do, Pompliano tries to sidestep his promise to arbitrate by pointing to a clause in the arbitration agreement that lets the parties “seek{] a preliminary injunction . .. in court to preserve the status quo before the arbitrator issues his/her award.” Jd, But that clause gets him nowhere be se it simply lets courts preserve the status quo on an issue while the arbitrator adjudicates it. That is ‘why it says the injunction will last until “the arbitrator issues his/her award.” Id. Indeed, California ‘courts recognize exactly that; they hold that where a court is authorized to enjoin parties to preserve the status quo during arbitration, that power permits injunetions “necessary to preserve the meaningfulness of arbitration.” Davenport v, Blue Cross of Calif., 52 Cal. App. 4th 435, 450- 53 (1997) (citation omitted). Pompliano’s problem is that he has not filed a Section 1050 claim before the arbitrator, or otherwise sought an arbitral order to stop ap from allegedly bad- mouthing him to other employers regarding his te ation (which he asserts in his Complaint DEFEI DANT'S PETITION TO COMPEL ARBITRATION1 [establishes a Section 1050 claim), Because Pompliano has never asked the arbitrator to rule on the 2 | Section 1050 claim, he cannot ask this Court to preserve the status quo for a phantom ruling that 3 | the arbitrator will never make. He should be compelled back to arbitration, 4 Although the Court need go no further to resolve Snap’s petition to compel arbitration, 5 | there is yet another reason why Pompliano’s bid to evade arbitration cannot be countenanced. The 6 | arbitration agreement goes on to command that “disagreements over the arbitrability of any claim, 7 | controversy, or dispute or the arbitrator's jurisdiction ... will be resolved by the arbitrator.” 8 | Compl., Ex. A. Ina case like this one, where Pompliano himself invoked arbitration and has been 9 | arbitrating for months, he should not be allowed to circumvent that provision. This Court thus 10 | should not decide the “status quo” issue in the first instance anyway. Instead, the Court should 11 | require Pompliano to submit his Complaint to the arbitrator so he can rule on arbitrability. 12 ‘That outcome is particularly appropriate here because the key allegation in Pompliano’s 13 | Complaint—that Snap has maligned him to the point of making him unemployable—is 14 | demonstrably false. The Court would not know that because Pompliano’s Complaint stops 15 | curiously short of telling the full story of his life after Snap. An important point he neglects to 16 | mention is that he got another job with another tech company in the social-media space not long 17 | after leaving Snap. But in a twist that will sound familiar, Pomp! ano got fired from that job too, 18 | after working there for less than two months. He then hit that employer with a lawsuit that also 19 | raises allegations of fraud. See Pompliano v. Brighten Labs Inc., Los Angeles Superior Court Case 20 | No. BC613185. If Pompliano still wants to perpetuate the myth that Snap has hurt his job 21 | prospects, he should tell that tale to the arbitrator, not conscript this Court into advancing his 22 | public-relations efforts. And speaking of myths, his allegations a Snap are false from top to 23 | bottom and right out of his allege-fraud-against-former-employers playbook. As Snap will show at 24 | the appropriate time in the appropriate forum, Pompliano was a disgruntled employee who was 25 | fired for poor performance. To rationalize hit ring, Pompliano has ginned up preposterous 26 | allegations about Snap giving Ise user metrics back in 2015. Those accusa ns are sure 27 | to grab headlines, but they fail 1o grasp reality. Snap looks forward to demonstrating just how 28 | wrong Pompliano is—before the arbitrator, where the parties are already litigating these points. DEFENDANT'S PETITION TO COMPEL ARBITRATIONSO ffee ai oet 10 ul 12 13 14 15 16 ‘The Court should insist that Pompliano pursue his claims in the venue he agreed upon by contract: binding arbitration. The motion to compel should be granted. STATEMENT OF FACTS AND PROCEDURAL HISTORY A. Statement Of Facts. 1. Pompliano’s Employment And His Agreement To Arbitrate. Pompliano was an at-will employee of Snap. See Compl., Ex. A. He was employed for only three weeks in 2015 before his employment terminated. Compl., 8. When Pompliano started his employment, the parties entered into a Mutual Agreement to Arbitrate Claims (“Agreement”). Compl., Ex. A. The Agreement broadly requires that all claims relating to Pompliano’s employment or termination of employment from Snap must be arbitrated: Employee and Snapchat, Inc. (the Company) agree that, to the fullest extent permitted by law, any and all claims, controversies, or disputes between Employee and the Company . .. relating in any ‘manner to Employee's hiring, employment, or termination of employment, whether voluntary or involuntary, will be submitted to final and binding arbitration (Arbitrable Claims) as the exclusive remedy for such claims, controversies, or disputes (Arbitration Agreement). Compl, Ex. A. ‘The Agreement defines “Arbitrable Claims” to include Labor Code claims, as well as any “statutory and common-law claims and penalties, fees, costs, or other expenses including attorneys’ fees, whether under state, federal, or local law, including, but not limited to, theories arising under breach of contract, wrongful termination, negligence, defamation, infliction of emotional distress, misrepresentation....” /d. ‘The parties’ Agreement also delegates to the arbitrator the exclusive right to resolve disputes over its scope, including the arbitrability of claims: For clarity, disagreements over the arbitrability of any cl: controversy, or dispute or the arbitrator’ jurisdiction, includi objections to the existence, scope, or validity of this Arbitration Agreement, will be resolved by the arbitrator. Md. NDANT'S PETITION TO COMPEL ARBITRATION,2. Pompliano’s Termination, Pompliano alleges that Snap fired him because he refused to recruit colleagues from his former employer over to Snap (Compl. § 7), and—more dramatically—because he allegedly discovered that Snap was misrepresenting various user metrics to advertisers, the public, and investors. /d at § 4. According to Pompliano, he complained about these metrics, raised the issue with several senior executives, and promptly was fired. Id. ‘These allegations properly belong before the arbitrator, and Snap is confident that it will prevail in that forum. It suflices to say briefly here that Pompliano’s allegations about Snap’s metrics are baseless. For example, Pompliano alleges that Snap was telling investors in mid-2015 that it had obtained a certain number of users, when its own internal metrics were showing a slightly lower figure. Compl., €¥ 50, 55. Putting aside for a moment that Pompliano’s allegations are badly dated, his premise is simply wrong: Snap was not telling investors in mid-2015 that the app had obtained the user totals he alleges. Snap was and is very carefill to be accurate with its statements about metrics. Pompliano fails to identify who made these allegedly false statements to investors, to which investors they were made, or how he is aware of such statements. He provides no support for these allegations —unsurprising because he worked at Snap for three weeks, was not on the executive team, and did not even interact with investors. The allegations reflect his slapdash approach to litigation. Snap will demonstrate as much in arbitration. Pompliano’s allegations about what later happened relating to his termination fare no better. He alleges that prospective employers contacted Snap about him after he was fired, that Snap made “misrepresentations” about his employment and termination, and that these supposed misrepresentations prevented him from obtaining gainful employment. Compl., {¥ 85-89. But these allegations are conclusory; Pompliano fails to identify a single actual “misrepresentation” ‘Snap made about him to any prospective employer. The who, what, when, and where are nonexistent. Moreover, even these bare-bones allegations fail to tell a complete or accurate story In fact, Pompliano’s lawsuit against his subsequent employer, Brighten Labs, make clear that, far from being unemployable, he found a job mere weeks after leaving Snap. Of course, that job, too, DEFENDANT PEL ARBITRATION1 ended in his termination—and in Pompliano suing that company, alleging a flurry of alleged 2.| corporate misdeeds reminiscent of those he alleges here. 3 As for damages, Pompliano seeks compensatory damages for lost wages, attorneys” fees and costs, exemplary damages, reinstatement, and injunctive relief. Compl. § 89, Prayer for Relief, $§ (a)-(1). In the civil cover sheet, Pompliano also confirms that he is seeking monetary damages. B. Procedural History On July 27, 2016, invoking the parties’ written Agreement, Pompliano filed a demand for arbitration against Snap (the “Demand”), The Demand includes causes of action for wrongful oreo) foot aot termination, fraudulent inducement of employment contract, breach of contract, intentional 11 | infliction of emotional distress, and violations of the California Labor Code. Decl. of Baldwin J 12 | Lee in Support of Petition to Compel Arbitration (“Lee Decl.”), 2. B Since July 27, 2016, and despite an October 25, 2016 case management conference, 14 | Pompliano has not sought to amend his Demand. Lee Decl., 3. He also has not contacted Snap"s 15 J counsel to discuss any alleged misrepresentations by Snap to prospective employers. Nor has he 16 | sent a cease-and-desist request. Id. "7 ‘On January 4, 2017, Plaintiff filed this Complaint, alleging a single claim for purported 18 | violation of Labor Code Section 1050. 19] 11. ARGUMENT 20 A. The Parties’ Agreement Requires Pompliano To Art n 1050 Claim, 2 2 As set forth above, Pompliano already has initiated a binding arbitration proceeding 23 | pursuant to his Agreement with Snap. In that pending proceeding, he has alleged multiple causes 24 | of action for violation of the Labor Code. Lee Decl., $ 2. Accordingly, that pending arbitration 25 | proceeding is the proper forum for the Section 1050 claim he alleges in the Complaint. Given his 26 | express acknowledgement that binding arbitration is the proper forum for him to litigate any Labor 27 | Code elai against Snap, Pompliano cannot contend otherwise here. The Court therefore should 28 | grant Snap’s Petition and compel Pompliano to arbitrate his Section 1050 claim. DEFENDANT'S PETITION TO COMPEL ARBITRATION1 B. The Parties’ Agreement Clearly And Unmistakably Delegates The Question Of Arbitrability To The Arbitrator. v 3 Where parties clearly and unmistakably have delegated the question of arbitrability to the 4 | arbitrator, the issue of arbitrability is no longer subject to judicial determination. Tiri v. Lucky 5 | Chances, Inc., 226 Cal. App. 4th 231, 241 (2014). As stated in Tiri: 6 Parties to an arbitration agreement may agree to delegate to the arbitrator, instead of a court, questions regarding the enforceability 7 of the agreement. They “can agree to arbitrate almost any dispute— even a dispute over whether the underlying dispute is subject to 8 arbitration.” 9 | Jd. at 241 (internal citations omitted). A court must uphold a provision delegating determination of 10 | arbitrability to an arbitrator, so long as two prerequisites are met: (1) the language is clear and 11 | unmistakable, and (2) the delegation is not revocable under state contract defenses such as fraud, 12 | duress, or unconscionability. Jd. at 242. Both prerequisites are met here. 13 First, the parties clearly and unmistakably delegated the question of arbitrability to the 14 | arbitrator. The Agreement, which Pompliano invoked to initiate the pending arbitration, states: 15 For clarity, disagreements over the arbitrability of any claim, controversy, or dispute or the arbitrator's jurisdiction, including any 16 objections to the existence, scope, or validity of this Arbitr Agreement, will be resolved by the arbitrator. 18 | Compl., Ex. A. In addition to that clear mandate, the Agreement also provides that the arbitration 19 | will be conducted and administered by JAMS pursuant to JAMS’ Employment Arbitration Rules. 20 | JAMS Rule 11 provides, in relevant part: 21 (b) Jurisdictional and arbitrability disputes. including disputes over the formation, existence. validity. interpretation or scope of the 2 agreement under which Arbitration is sought. and who are prover Parties to the Arbitration. shall be submitted to and ruled on by the 23 Arbitrator. Unless the relevant law reauires otherwise. the Arbitrator has the authority to determine jurisdiction and arbitrability issues as m4 a preliminary matter. 25 | Lee Decl. 44, Ex. A JAMS Rule 11). Accordingly, Rule 11 confirms that the parties clearly and 26 | unmistakably have delegated to the arbitrator the right to decide the que: nn of arbitrability. 27 | Particularly in a case like this one—where Pompliano himself is the one who filed the arbitration ‘ialoy tito 6 DEFENDANT'S PETITION TO COMPEL ARBITRATION2 demand, and where he has been taking advantage of the arbitration proceeding for months—he should not be allowed to flout that clear delegation, Moreover, Pompliano has acknowledged the Agreement’s validity and enforceability by affirmatively taking advantage of the Agreement and its benefits—he voluntarily filed the pending arbitration. Thus, the issue of whether any state contract defenses apply to the Agreement’s delegation clause is not present, In sum, because the conditions for enforcing the Agreement’s delegation clause are met, the Court should grant Snap’s Petition and send the Complaint to the arbitrator. C. Pompliano Can Show No Excuse To Justify Evasion Of The Agreement. When parties have agreed to have an arbitrator decide the question of arbitrability, the court's inquiry is strictly limited. Qualcomm, Inc. v. Nokia Corp., 466 F.3d 1366, 1373, n.5 (Fed. Cir. 2006). A court may only examine whether the moving party’s a sertion of arbitrabilit “wholly groundless.” Id.; see also Dream Theatre, Inc. v. Dream Theater, 124 Cal. App. 4th 547, 553 (2004). And “[i}f the court finds that the assertion of arbitrability is not ‘wholly groundless,” then it should stay the trial of the action pending a ruling on arbitrability by an arbitrator.” See Qualcomm, 466 F.3d at 1371, 1374 (“Because any inquiry beyond a ‘wholly groundless’ test would invade the province of the arbitrator, whose arbitrability judgment the parties agreed to abide by in the [] Agreement, the district court need not, and should not, determine whether [the] defenses are in fact arbitrabl see also Dream Theatre, 124 Cal. App. 4th at 553 (reversing trial court's order staying arbitration and remanding with instruction that the litigation be stayed pending the arbitrator’s determination of the scope of his or her jurisdiction). ‘The court should order the Complaint to the arbitrator because Snap’s Petition is far from “wholly groundless.” The Agreements plain language broadly states that all disputes “relating in any manner” to Pompliano’s employment and termination from employment must be arbitrated, including Labor Code claims. (Indeed, Pompliano is pursuing Labor Code claims in the pending arbitration, Lee Dec., § 2.) Pompliano alleges that Snap fired him merely three weeks into his employment due to complaints he allegedly made to his superiors regardi Snap’ representations to its advertisers. Compl., §¥ 82-83. Pompliano alleges that prospective employers a DEFENDANT'S PETITION TO COMPEL ARBITRATIONsubsequently contacted Snap regarding his Snap employment, and that Snap allegedly made representations regarding his firing that hampered his ability to obtain gainful employment. Compl, $4 85-86. These allegations clearly fall within the Agreement’ scope of “relating in any manner” to Pompliano’s employment or termination, While Pompliano may contend that the Agreement permits a party the opportunity to seek a preliminary injunction in court to preserve the status quo before the arbitrator issues his award, his sham Complaint does not fit into that exception. As established above, that clause lets courts “preserve the status quo” on an issue while the arbitrator adjudicates it. Compl., E: A; see also. Davenport, 52 Cal. App. 4th at 450-53. Pompliano, however, has not filed a Section 1050 claim before the arbitrator; thus, there is no underlying Section 1050 claim regarding which the status quo needs to be preserved. Because Snap’s Petition plainly is not “wholly groundless,” the Court should order the matter to arbitration. Dream Theatre, 124 Cal. App. 4th at 553, D. ‘The Court Must Stay This Action Until The Parties’ Arbitration Is Completed. Under California Code of C il Procedure Section 1281.4, “[i]f an application has been’ made to a court . . . for an order to arbitrate a controversy which is an issue in an a ion or proceeding pending before a court ... the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until the application for an order to arbitrate is determined.” If arbitration is ordered, the stay shall continue in effect “until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” /d. Similarly, under 9 U.S.C. Section 3, the court, in any action “referable to arbitration under an agreement in writing . .. upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement.” The stay provision mandatory. See Twentieth Century Fox Film Corp. v. Superior Court, 79 Cal. App. 4th 188, 192 (2000) (“[ ection 1281.4] is clear and unambiguous: it requires that the trial court stay a action pending before it while an 8 'S PETITION TO COMPEL ARBITRATION1 | application to arbitrate the subject matter of the action is pending in a court of competent 2 | jurisdiction”). Accordingly, this matter should be stayed pending determination by the arbitrator. 3|IV. CONCLUSION 4 For the reasons set forth above, the Court should stay this matter and order that the 5 | Complaint be submitted to the arbitrator, Hon. Rex Heeseman (Ret.). 6 7 | Dated: January 18, 2017 ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 8 9 —7 By: 10 BALD E ALEXANDER NESTOR i ‘Attorneys for Defendant SNAP INC: 12 13 4 15 16 7 18 19 20 a 22 23 24 25 26 20 28 DEFENDANT'S PETITION TO COMPEL ARBITRATION