Judge Alison Mackenzie, Case Number: 24STCV21974, Date: 2025-03-04 Tentative Ruling

Judge: Alison Mackenzie, Case: 24STCV21974, Date: 2025-03-04 Tentative Ruling

Case Number: 24STCV21974 Hearing Date: March 4, 2025 Dept: 55

NATURE OF PROCEEDINGS: Hearing on Defendants' Motion to Compel Arbitration

Defendants’ Motion to Compel Arbitration is granted.

BACKGROUND

Plaintiff Shatoya Allen filed this action against Cookbook Market Larchmont, LLC, Cooking Through The Book, LLC, Joint Venture Restaurant Group, Inc., and Does 1-50 (Defendants), alleging sex and race discrimination and harassment.

The causes of action are: (1) Race Harassment in Violation of FEHA; (2) Race Discrimination in Violation of FEHA; (3) Sex Harassment in Violation of FEHA, (4) Sex Discrimination in Violation of FEHA; and (5) Retaliation.

The Complaint alleges the following. In October 2023, Defendants hired Plaintiff as a barista at Cookbook, a “micro-grocery” in the Larchmont neighborhood of Los Angeles. Compl. ¶ 1, 2, 18. In December 2023, Cookbook hired a new store manager, LJ Rivas, who immediately treated Ms. Allen with unwarranted hostility. Compl. ¶¶ 21, 22. Rivas regularly reprimanded Plaintiff, a Black woman, but did not reprimand her non-Black and non-female co-workers for the same behavior. Compl. ¶ 22. Rivas frequently avoided Plaintiff when they worked together and criticized her “loud personality.” Compl. ¶ 22. On January 15, 2024, Rivas “snapped at” Plaintiff to stop speaking with her non-Black co-worker, but did not tell the co-worker to stop speaking to Plaintiff. Compl. ¶ 24. Later that morning, despite Cookbook being busy, Rivas told Plaintiff to go home more than two hours early. Compl. ¶¶ 23, 25. When Plaintiff pushed back, Rivas called Sydney Suskind, Cookbook’s Human Resources manager, who told Plaintiff that if she did not clock out of her shift, Cookbook would call the police. Compl. ¶ 26. Plaintiff told Rivas and Susskind that she would finish her task and clock out. ¶ 28. After clocking out, Plaintiff went to purchase food from the store, Rivas repeatedly told her to “get out,” before he ultimately called the police. Compl. ¶¶ 29, 30. When Plaintiff arrived at her shift the following day, Cookbook’s store manager, Brad Watson, informed her that she was fired for “insubordination.” Compl. ¶¶ 33, 34. Two days later, a white male Cookbook employee continued working after Rivas told him to clock out, but Cookbook did not call or threaten to call the police. Compl. ¶ 36.

Defendants filed a Motion to Compel Arbitration. Plaintiff filed an Opposition.

LEGAL STANDARD

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….” Code Civ. Proc. § 1281.2. “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle). A party meets its initial burden simply by reciting the terms of the governing provision, or by attaching a copy of the provisions. Sprunk v. Prisma LLC (2017) 14 Cal.App.5th 785, 793. Once the petitioner meets its burden, “the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges.” Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.

ANALYSIS

I. EFAA

It is undisputed that Plaintiff signed a “Standard Confidentiality Agreement” (Confidentiality Agreement) containing an arbitration clause (Arbitration Agreement), and that the Arbitration Agreement is governed by the Federal Arbitration Act (FAA). Godoy Decl. ¶ 5, Ex. A. However, Plaintiff argues that the Arbitration Agreement is pre-empted by the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (9 U.S.C. §§ 401-402; EFAA or Act). “This federal law permits plaintiffs to elect to render arbitration agreements unenforceable in cases relating to a sexual harassment dispute.” Casey v. Superior Court (2025) 108 Cal.App.5th 575, 580 (citing (9 U.S.C. § 402(a)).

“The EFAA, a relatively new statute enacted in 2022, provides that a ‘person alleging conduct constituting a sexual harassment dispute’ may elect that ‘no predispute arbitration agreement … shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the … sexual harassment dispute.’” Id. at p. 582 (quoting 9 U.S.C. § 402(a)). “A ‘sexual harassment dispute’ is defined as ‘a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.’” Ibid. (quoting 9 U.S.C. § 401(4)). “[W]here a plaintiff's lawsuit contains at least one claim that fits within the scope of the EFAA, “the arbitration agreement is unenforceable as to all claims asserted in the lawsuit.” Liu v. Miniso Depot CA, Inc. (2024) 105 Cal.App.5th 791, 800.

Defendants argue that Plaintiff has not properly pleaded a claim for sexual harassment and therefore cannot avoid arbitrating her claims under the EFAA. Therefore, to determine whether the EFAA applies, the Court must determine if Plaintiff’s arbitration claim could survive a demurrer. See id. at p. 799, fn. 2 (noting, “[f]ederal district court decisions have interpreted the EFAA to apply only where the plaintiff's sexual harassment related claims are capable of surviving a challenge at the pleading stage, because without such a procedural safeguard a plaintiff could avoid complying with an otherwise valid arbitration agreement by simply adding a baseless sexual harassment claim.”).

When considering demurrers, courts read the allegations liberally and in context. Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994. “A demurrer tests the pleading alone, and not on the evidence or facts alleged.” E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315. As such, courts assume the truth of the complaint’s properly pleaded or implied factual allegations. Ibid. However, they do not accept as true deductions, contentions, or conclusions of law or fact. Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.

“Unlike FEHA discrimination claims, which address only explicit changes in the ‘terms, conditions, or privileges of employment’ (§ 12940, subd. (a)), harassment claims focus on ‘situations in which the social environment of the workplace becomes intolerable because the harassment (whether verbal, physical, or visual) communicates an offensive message to the harassed employee.’” Bailey v. San Francisco Dist. Attorney's Office (2024) 16 Cal.5th 611, 627 (Bailey) (quoting Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 706). “‘[I]t is “only necessary to show that gender is a substantial factor in the discrimination’, and that if the plaintiff ‘had been a man she would not have been treated in the same manner.’” Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 280 (Lyle) (quoting Accardi v. Superior Court (1993) 17 Cal.App.4th 341, 348). “It is the disparate treatment of an employee on the basis of sex… that is the essence of a sexual harassment claim.” Ibid.

“[A]n employee claiming harassment based upon a hostile work environment must demonstrate that the conduct complained of was severe enough or sufficiently pervasive to alter the conditions of employment and create a work environment that qualifies as hostile or abusive to employees because of their sex.” Lyle, supra, 38 Cal.4th 264, 279 (Lyle). “The standard for workplace harassment claims strikes a ‘middle path between making actionable any conduct that is merely offensive and requiring the conduct to cause a tangible psychological injury.’” Bailey, supra, 16 Cal.5th at p. 628 (quoting Harris v. Forklift Systems, Inc. (1993) 510 U.S. 17, 21). “‘[S]imple teasing, offhand comments, and isolated incidents (unless extremely serious)’ are not sufficient to create an actionable claim of harassment.” Ibid (quoting Reynaga v. Roseburg Forest Products (9th Cir. 2017) 847 F.3d 678, 687) (citations omitted) (internal quotation marks omitted). “The objective severity of harassment should be judged from the perspective of a reasonable person in the plaintiff's position.” Id. at p. 628. A single incident of harassment may be enough to constitute a hostile work environment if it “unreasonably interfered with the plaintiffs work performance or created an intimidating, hostile, or offensive working environment.” Gov. Code, § 12923, subd. (b).

In 2024, the Legislature passed Senate Bill (SB)1137, which “recognizes that where two or more bases for discrimination or harassment exist, they cannot be neatly reduced to distinct components. The attempt to bisect a person's identity at the combination of multiple protected characteristics often distorts or ignores the particular nature of their experiences. When a person claims multiple bases for discrimination or harassment, it may be necessary to determine whether the discrimination or harassment occurred on the basis of a combination of those factors, not just based on any one protected characteristic by itself.”

While Plaintiff pleads facts showing that she was treated differently than other employees, she fails to allege any facts supporting an inference that this treatment was based on her sex, as opposed to her race. Plaintiff states that she was subject to reprimands and discipline that her white colleagues, both male and female, were not. Compl. ¶¶ 22, 24, 36. While the Court acknowledges that this does not eliminate the possibility of intersectional animosity towards black women, no facts in the record support such an inference. Plaintiff does not for instance, allege that she was subject to disparate treatment that a Black male colleague was not. Plaintiffs only allegation that she contends is specific to her status as a Black woman, is Rivas’s criticism that she has “a loud personality.” Compl. ¶ 22. While Plaintiff contends this is a “derogatory stereotype for Black women,” that allegation alone is insufficient to show that she experienced severe or pervasive harassment based on her status as a Black woman. Therefore, the Court concludes Plaintiff has failed to state a claim for sexual harassment. Accordingly, the EFAA does not apply.

II. Unconscionability

Next, Plaintiff argues that the Arbitration Agreement is unconscionable and therefore unenforceable.

Like any other contract, arbitration agreements are subject to a defense of unconscionability. Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83,113 (Armendariz). “The general principles of unconscionability are well established. A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party. Unconscionability has both a procedural and a substantive element. The party resisting enforcement of an arbitration agreement has the burden to establish unconscionability.” Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 492 (citations omitted) (internal quotation marks omitted).

“[P]rocedural and substantive unconscionability must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability. But they need not be present in the same degree. Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves. In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1243-44 (Baltazar) (cleaned up).

A. Delegation

Before the Court reaches the unconscionability issue, it must decide whether the Arbitration Agreement places jurisdiction of such threshold questions in the arbitrator. “Under both federal and state law, courts presume that the parties intend courts, not arbitrators, to decide … disputes about arbitrability, including whether an arbitration clause in a concededly binding contract applies to a particular type of controversy. The parties may agree to delegate authority to the arbitrator to decide arbitrability, but given the contrary presumption, evidence that the parties intended such a delegation must be ‘clear and unmistakable’ before a court will enforce a delegation provision.” Mondragon v. Sunrun Inc. (2024) 101 Cal.App.5th 592, 603 (Mondragon) (citations omitted) (internal quotation marks omitted).

In Dream Theater, Inc. v. Dream Theater (2004) 124 Cal.App.4th 547, 557, the court held, “where the Contract provides for arbitration in conformance with rules that specify the arbitrator will decide the scope of his or her own jurisdiction, the parties’ intent is clear and unmistakable, even without a recital in the contract that the arbitrator will decide any dispute over arbitrability.” However, subsequent cases have clarified that for unsophisticated parties like hourly employees and consumers, merely incorporating the arbitration rules by reference is not a clear and unmistakable agreement to delegate arbitrability decisions to the arbitrator. See Mondragon, supra, 101 Cal.App.5th at p. 605; Gostev v. Skillz Platform, Inc. (2023) 88 Cal.App.5th 1035, 1053.

Here, the Arbitration Agreement provides that arbitration “shall be conducted before JAMS, pursuant to its Employment Arbitration Rules & Procedures.” Godoy Decl. ¶ 5, Ex. A ¶ 5. Rule 11 of the applicable JAMS rules states “Jurisdictional and arbitrability disputes, including disputes over the formation, existence, validity, interpretation or scope of the agreement under which Arbitration is sought, and who are proper Parties to the Arbitration, shall be submitted to and ruled on by the Arbitrator.” Carvajal Decl. ¶ 5, Ex. C at p. 15. Because Plaintiff was an hourly worker, the Court concludes that she is an unsophisticated party. Therefore, the Court and not the arbitrator must determine the validity of the Arbitration Agreement.

B. Procedural Unconscionability

Plaintiff argues that the Arbitration Agreement is procedurally unconscionable because it is a contract of adhesion and was buried within a prolix form, resulting in an unconscionable element of surprise.

1. Contract of Adhesion

A “contract of adhesion” is “a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.” Armendariz, supra, 24 Cal.4th at 113 (quoting Neal v. State Farm Ins. Cos. (1961) 188 Cal. App. 2d 690, 694. “[C]ontracts of adhesion, although they are indispensable facts of modern life that are generally enforced, contain a degree of procedural unconscionability even without any notable surprises, and bear within them the clear danger of oppression and overreaching.” Baltazar, supra, 62 Cal.4th 1237, 1244 (citation omitted) (internal quotation marks omitted).

Plaintiff and other new employees attending onboarding were presented with the Confidentiality Agreement, and other documents in their onboarding packets. Susskind Decl. ¶ 4 (a). Employees were told to ask if they had any questions and were permitted to take documents home to consult someone about them if they asked to do so. Susskind Decl. ¶¶ 4(b), 5. In his declaration, Issac Godoy, Cookbook Market Larchmont’s Human Resources Director states “Plaintiff was free to review and consider the Agreement along with the job offer of barista and other onboarding documents, at her discretion. Godoy Decl. ¶6. Defendants argue that these facts show that Plaintiff was not required to sign the Confidentiality Agreement as a condition of employment. Reply at p. 5:17-18. However, neither of Defendants’ declarations states that they communicated to Plaintiff that signing the Confidentiality Agreement was optional. Moreover, the Confidentiality Agreement’s preamble states “as a material condition and in consideration of your engagement by Company to provide services for Company…[¶] You and Company specifically acknowledge and agree as follows:” Godoy Decl. ¶ 5, Ex. A. Accordingly, the Court concludes that the Arbitration Agreement is a contract of adhesion with at least a low level of procedural unconscionability.

B. Surprise

There is no merit to Plaintiff’s argument that the arbitration provision was buried in a prolix form. The entire Confidentiality Agreement is only two pages, Plaintiff was given time to review it and ask questions, and the arbitration provision is identified in bold with a warning “BY SIGNING THIS AGREEMENT, YOU ACKNOWLEDGE THAT YOU ARE AGREEING TO ARBITRATE ALL CLAIMS AND ARE WAIVING YOUR RIGHT TO A JURY TRIAL.” Godoy Decl. ¶ 5, Ex. A ¶ 5.

Accordingly, the Arbitration Agreement contains only the low level of procedural unconscionability inherent in contracts of adhesion.

C. Substantive Unconscionability

Plaintiff argues that the Arbitration Agreement is substantively unconscionable because it is overbroad, of infinite duration, lacks mutuality, and contains confidentiality provisions that limit her ability to discuss her working conditions or disclose law violations.

Substantive unconscionability focuses on the actual terms of the arbitration agreement and evaluates whether they create overly harsh or one-sided results as to shock the conscience. Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1515. “When, as here, there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be enforceable unless the degree of substantive unconscionability is high.” Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704 (citation omitted) (internal quotation marks omitted).

In Cook v. University of Southern California (2024) 102 Cal.App.5th 312, the Court held that an arbitration agreement of infinite duration that requires an employee to arbitrate all claims against its agents, affiliates, and employees, irrespective of whether they arise from the employment relationship is unconscionable.

1. Scope

Plaintiff argues that the contract is unconscionably broad because it is not limited to claims arising out of its employment.

In Cook, the Court held that the agreement, which required arbitration of all claims against the defendant employer or its affiliated entities, whether or not they arose out of the plaintiff’s employment, was unconscionably broad. Cook, supra, 102 Cal.App.5th 312, 321

Defendant argues that the Arbitration Agreement is more limited than the agreement in Cook.

The goal of contractual interpretation is to determine and give effect to the mutual intention of the parties.” Safeco Ins. Co. v. Robert S. (2001) 26 Cal.4th 758, 763 (citing Civ. Code § 1636; Bay Cities Paving & Grading, Inc. v. Lawyers' Mutual Ins. Co. (1993) 5 Cal. 4th 854). “That intent is to be inferred, if possible, solely from the written provisions of the contract.” Pardee Construction Co. v. Insurance Co. of the West (2000) 77 Cal.App.4th 1340, 1352. “The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.” Cal. Civil Code § 1638.

Here, the agreement requires arbitration of “any question, claim, controversy, dispute, or disagreement of any kind of character arising out of or during the course of or in any manner relating to the employment relationship between the parties or otherwise….” Godoy Decl. ¶ 5, Ex. A ¶ 5. Plaintiff argues that the bolded warning states that Plaintiff is “AGREEING TO ARBITRATE ALL CLAIMS.” Ibid. However, that warning must be read in the context of the language limiting the scope of claims relating to the employment relationship. See Civ. Code, § 1641 (“The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.”); Appalachian Ins. Co. v. McDonnell Douglas Corp. (1989) 214 Cal.App.3d 1, 12 (“If possible, the court should give effect to every provision. An interpretation which renders part of the instrument to be surplusage should be avoided.”(Citations omitted)). In context, “ALL CLAIMS,” refers to those claims described at the top of the paragraph. Accordingly, the Arbitration Agreement is not unconscionably broad.

2. Duration

Next, Plaintiff argues that the duration of the Arbitration Agreement is unconscionable. The agreement provides that “[y]ou and Company intend this document to be a binding agreement that shall continue in full force and effect to the fullest extent allowed by the law notwithstanding the termination of your engagement by Company.” Godoy Decl. ¶ 5, Ex. A ¶ 6. The agreement further provides it cannot be “modified, waived, amended, superseded or terminated, without the written consent of both parties.” Godoy Decl. ¶ 5, Ex. A ¶ 7.

While the court in Cook, found that the arbitration of unlimited duration was unconscionable, that was because it was also maximally broad such that “‘for the rest of her life, if Plaintiff were to suffer an injury related to USC or its related entities, Plaintiff could be ordered to arbitrate such claims.’” Cook, 102 Cal.App.5th at p. 318. Here, as discussed above, the Arbitration Agreement is more limited in scope, therefore, the infinite duration is unlikely to be relevant. Accordingly, the Court concludes that the infinite duration adds only a low level of substantial unconscionability.

3. Mutuality

“An arbitration agreement imposed in an adhesive context lacks basic fairness and mutuality if it requires one contracting party, but not the other, to arbitrate all claims arising out of the same transaction or occurrence or series of transactions or occurrences.” Armendariz, surpa 24 Cal.4th at p. 120.

Plaintiff argues that the Arbitration Agreement lacks mutuality, because it requires her to arbitrate all disputes against plaintiffs and their principals, family members, and entities owned or controlled by any of the foregoing, but they would not be compelled to arbitrate all disputes against Plaintiff. Opp. at p. 19:7-11. Plaintiff bases this interpretation on the Preamble to the Confidentiality Agreement, which says “as a material condition and in consideration of your engagement by Company to provide services for Company, Company's principals, their family members, and entities owned or controlled by any of the foregoing (the ‘Protected Parties’), and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: [¶] You and Company specifically acknowledge and agree as follows….”

The Confidentiality Agreement references the Protected Parties ten more times, but the arbitration clause does not say that the Protected Parties are entitled to compel Plaintiff to arbitrate claims. While the Confidentiality Agreement does provide that the Protected Parties are “entitled to injunctive relief as well as the right to terminate [Plaintiff’s] engagement immediately for cause…” that is separate from the Arbitration Agreement and therefore it falls to the arbitrator to determine if it is unconscionable. See Buckeye Check Cashing, Inc. v. Cardegna (2006) 546 U.S. 440, 440 (Buckeye) (“[A] challenge to the validity of a contract as a whole, and not specifically to the arbitration clause within it, must go to the arbitrator, not the court.”).

4. Confidentiality Provisions

Finally, Plaintiff argues that the Confidentiality Agreement contains confidentiality provisions which preclude her from disclosing “any information of any kind dealing in any way related to the personal, professional or business lives or affairs” of Defendants or Protected Parties. Opp. at p. 20. 16-20. As with the injunctive relief provision, because the confidentiality provision is not part of the arbitration clause, whether it is unconscionable must be decided by the arbitrator, not the court. See Buckeye, supra, 546 U.S. at p. 440.

Because the Arbitration Agreement contains only low levels of procedural and substantive unconscionability, it is enforceable. Accordingly, Defendant’s motion to compel arbitration is granted.

CONCLUSION

Defendants' Motion to Compel Arbitration is granted.