Judge: Armen Tamzarian, Case: 23STCV13768, Date: 2023-08-30 Tentative Ruling
Case Number: 23STCV13768 Hearing Date: August 30, 2023 Dept: 52
Defendant
Chedraui USA, Inc.’s Motion to Compel Arbitration and Stay the Action
Defendant
Chedraui USA, Inc. moves to compel arbitration of this action by plaintiff Luz
Abundis.
Evidentiary Objections
Plaintiff makes three objections to defendant’s evidence. In its initial moving papers, defendant was
not required to prove the agreement’s existence via admissible evidence.
A motion
to compel arbitration is “a summary proceeding.” (Espejo
v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th
1047, 1057 (Espejo).) The moving
party can meet the “initial burden to show an agreement to arbitrate by
attaching a copy of the arbitration agreement purportedly bearing the opposing
party’s signature.” (Id. at p.
1060.) For this initial burden, “ ‘it is
not necessary to follow the normal procedures of document authentication.’
” (Id. at p. 1058.) Only after the opposing party “challenge[s]
the validity of that signature” must the moving party “establish by a
preponderance of the evidence that the signature was authentic.” (Ibid.)
Plaintiff’s three objections are overruled.
Federal Arbitration Act (FAA)
Plaintiff disputes
whether the FAA applies. The court
declines to reach the issue because the result would be the same under either
the FAA or the California Arbitration Act.
Existence
of Agreement
Defendant presents
sufficient evidence that plaintiff entered the arbitration agreement. The moving party can meet its ultimate burden of the preponderance of
the evidence by showing the “security precautions regarding transmission and
use of an applicant’s unique username and password, as well as the steps an
applicant would have to take to place his or her name on the signature
line.” (Espejo, supra, 246 Cal.App.4th at p. 1062.)
Defendant’s
evidence explains the security precautions taken to ensure only plaintiff could
sign the agreement. Maria Garcia is
defendant’s vice president of human resources.
(Supp. Garcia Decl., ¶ 1.) She
states that, for its “onboarding processes,” defendant “uses an online
recruiting management software system called ‘talentReef.’ ” (Id., ¶ 3.) Any applicant “must create a personalized
talentReef account” with “a unique password.”
(Id., ¶ 4.) “Without
knowledge of Plaintiff’s unique username and password, no one else can sign
these onboarding documents on Plaintiff’s behalf.” (Ibid.) Documents in plaintiff’s personnel file
indicate she “signed all of her onboarding paperwork with the electronic
signature she created through her secure talentReef account, on October 19,
2018 between 3:12 p.m. and 3:48 p.m.” (Id.,
¶ 6.) Defendant also submits a copy of
plaintiff’s I-9 form which includes personally identifying information such as
her date of birth, social security number, and USCIS number as a lawful
permanent resident. (Id., Ex. A,
pp. 15-16.)
Plaintiff
has not rebutted this evidence. She
states that in October 2018, a fellow employee instructed her to “sign
additional documents using a small computer.”
(Abundis Decl., ¶ 5.) During the
process, “the computer froze.” (Id.,
¶ 6.) Plaintiff states the other
employee then “took the computer from me and stated, ‘don’t worry about it, I
will finish signing the document for you.’
I do not know what was signed, if at all, by me.” (Ibid.)
Defendant’s
evidence, however, indicates the arbitration agreement was “the first document
Plaintiff signed” during onboarding.
(Supp. Garcia Decl., ¶ 6.)
Plaintiff’s digital signatures on the arbitration agreement (in English
and Spanish) are stamped October 19, 2018, at 3:12 p.m. (Id., Ex. A, pp. 6-7.) Moreover, the onboarding process included
filling our plaintiff’s I-9 with private information her coworkers would not
have known. (Id., Ex. A, pp.
15-16.) Defendant has shown it is more
likely than not that plaintiff signed the arbitration agreement.
Plaintiff further
states nobody told her what the agreement means and that she did not receive a
copy. “Contract formation is governed by objective manifestations, not the
subjective intent of any individual involved.
The test is what the outward manifestations of consent would lead a
reasonable person to believe.” (Allen
v. Smith (2002) 94 Cal.App.4th 1270, 1277, internal quotes and
citations omitted.) Signing the
agreement is the standard objective manifestation of consent. Because she objectively manifested consent,
it is irrelevant that she may not have understood or read the agreement. (Ramos v.
Westlake Services LLC (2015) 242
Cal.App.4th 674, 686 [“one who accepts or signs an instrument, which on its
face is a contract, is deemed to assent to all its terms, and cannot escape
liability on the ground that he has not read it”].)
Unconscionability
Plaintiff argues the agreement is
unconscionable and therefore unenforceable.
The court rejects this argument.
Unconscionability requires both procedural and substantive
unconscionability using a sliding scale.
(Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th
165, 185.) “Procedural unconscionability
focuses on the elements of oppression and surprise.” (Id. at p. 177.) “Substantive unconscionability focuses on the
actual terms of the agreement and evaluates whether they create overly harsh or
one-sided results. (Ibid.,
internal quotes omitted.) “Generally,
the burden is on the party opposing arbitration to show an arbitration
agreement is unconscionable.” (Saheli
v. White Memorial Medical Center (2018) 21 Cal.App.5th 308, 330.)
Plaintiff shows some procedural unconscionability. Procedural unconscionability occurs when the
stronger party drafts the contract and presents it to the weaker party on a
‘take it or leave it basis.’ ” (Trivedi v. Curexo Technology Corp.
(2010) 189 Cal.App.4th 387, 393, disapproved on other grounds by Baltazar v. Forever 21, Inc. (2016) 62
Cal.4th 1237.) “ ‘Arbitration contracts
imposed as a condition of employment are typically adhesive.’ ” (Davis v.
Kozak (2020) 53 Cal.App.5th 897, 906 (Davis).) “By itself, however, adhesion establishes
only a ‘low’ degree of procedural unconscionability.” (Id. at p. 907.)
Plaintiff also
argues the agreement is procedurally unconscionable because it did not include
the applicable rules. The agreement
provides for arbitration “under the rules of the American Arbitration
Association (‘AAA’), except where its rules contradict this Agreement or state
or federal law. (A copy of the AAA rules
is available for you to review at Human Resources.)” (Agreement, § B.)
But “a viable claim of procedural unconscionability for
failure to identify the particular version of the applicable arbitral
rules—like a claim for failure to attach the rules themselves—depends in some
manner on the substantive unfairness of a term or terms contained within the
unidentified version of the rules applicable to the dispute.” (Davis, supra, 53 Cal.App.5th at p.
909.) If the “rules are not themselves
substantively unfair, then the employer cannot be faulted for vaguely referring
to such rules.” (Ibid.) Plaintiff fails to show the AAA rules are
unfair.
Plaintiff does not show any substantive
unconscionability as required. She
argues the agreement does not afford her adequate discovery. “The denial of adequate discovery in arbitration
proceedings leads to the de facto frustration of the employee’s statutory
rights.” (Armendariz v. Foundation Health
Psychcare Services, Inc. (2000) 24 Cal.4th 83, 104.)
Plaintiff argues, “[W]ithout being able to review the rules for
discovery, or be able to identify the location where the alleged arbitration
rules are held, Plaintiff was not afforded with adequate discovery.” (Opp., p. 10.) Whether the arbitration will allow adequate
discovery depends on the rules themselves—not plaintiff’s access to or
knowledge of the rules.
Plaintiff
has not met her burden of showing AAA’s rules do not permit her adequate
discovery. She has not submitted a copy
of the rules. Even if she had, courts
have generally found the AAA rules permit adequate discovery. (See, e.g., Lane v. Francis Capital
Management LLC (2014) 224 Cal.App.4th 676, 692–693; Roman v. Superior
Court (2009) 172 Cal.App.4th 1462, 1476.)
Moreover, the agreement provides that AAA rules will not apply “where its rules
contradict this Agreement or state or federal law.” (Agreement, § B.) Courts “assume that the arbitrator will operate in a reasonable manner
in conformity with the law.” (Dotson
v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 984.) Even if AAA’s rules do not permit adequate
discovery, the court assumes the arbitrator would permit adequate discovery as
required by California law.
The
opposition’s section on substantively unconscionability also includes an
argument that the individual defendants Elizabeth Doe and Karina Doe did not
sign the agreement and cannot enforce it.
(Opp., pp. 10-11.) That issue is separate
from substantive unconscionability.
Individual Defendants
In
addition to Chedraui USA, Inc., plaintiff has also named “Elizabeth Doe” and
“Karina Doe” as defendants. Plaintiff
has not yet filed proof of service of summons on them.
Courts may
deny a motion to compel arbitration if “[a] party to the arbitration agreement
is also a party to a pending court action or special proceeding with a third
party, arising out of the same transaction or series of related transactions
and there is a possibility of conflicting rulings on a common issue of law or
fact.” (CCP § 1281.2(c).) If a court makes that finding, it “(1) may
refuse to enforce the arbitration agreement and may order intervention or
joinder of all parties in a single action or special proceeding; (2) may order
intervention or joinder as to all or only certain issues; (3) may order
arbitration among the parties who have agreed to arbitration and stay the
pending court action or special proceeding pending the outcome of the arbitration
proceeding; or (4) may stay arbitration pending the outcome of the court action
or special proceeding.” (CCP §
1281.2.)
Nothing in
the record shows plaintiff agreed to arbitrate claims against the individual
defendants. Her claims against them
arise from the same events as her claims against Chedraui USA, Inc. Separate proceedings may result in
conflicting rulings. The court exercises
its discretion to order plaintiff to arbitrate this action against defendant
Chedraui USA, Inc. and to stay this pending court action.
Disposition
Defendant Chedraui USA, Inc.’s
motion to compel arbitration is granted.
Plaintiff Luz Abundis is ordered to arbitrate her claims against
defendant Chedraui USA, Inc.
The court hereby stays the entire action, with one exception, pending
resolution of the arbitration proceeding.
Plaintiff may serve the summons and complaint (along with notice of this
order) on defendants Elizabeth Doe and Karina Doe. The remainder of the action is stayed.