Judge: Blaine K. Bowman, Case: 37-2023-00051801-CU-WT-CTL, Date: 2024-05-24 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - May 23, 2024

05/24/2024  08:30:00 AM  C-74 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Blaine K. Bowman

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Civil - Unlimited  Wrongful Termination Motion Hearing (Civil) 37-2023-00051801-CU-WT-CTL HINZ VS ECOLAB INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

The court advances the hearing this motion, and the Case Management Conference, to 8:30am.

Defendants Ecolab Inc. and Jennifer Clifton's motion to compel arbitration is DENIED.

Defendants seek to compel arbitration pursuant to the Ecolab Mediation and Arbitration Agreement (EMAA) signed by Plaintiff on March 26, 2019, as part of Plaintiff's onboarding process with Ecolab.

While Plaintiff raises several arguments in opposition, the court addresses only Plaintiff's argument that the EMAA is unenforceable as illusory. The court finds this issue dispositive.

Defendants seek to enforce the EMAA under the Federal Arbitration Act.

The court's role under the [Federal Arbitration] Act is . . . limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. See 9 U.S.C. § 4; Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719–20 (9th Cir.1999); see also Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 477–78 (9th Cir.1991). If the response is affirmative on both counts, then the Act requires the court to enforce the arbitration agreement in accordance with its terms.

Chiron Corp. v. Ortho Diagnostic Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130.

Section 2 of the FAA provides that arbitration agreements 'shall be valid, irrevocable, and enforceable, save upon such grounds that exist at law or in equity for the revocation of any contract.' 9 U.S.C. § 2 (emphasis added). In determining the validity of an agreement to arbitrate, federal courts 'should apply ordinary state-law principles that govern the formation of contracts.' First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). Thus, although 'courts may not invalidate arbitration agreements under state laws applicable only to arbitration provisions,' general contract defenses such as fraud, duress, or unconscionability, grounded in state contract law, may operate to invalidate arbitration agreements. Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996).

Circuit City Stores, Inc. v. Adams (9th Cir. 2002) 279 F.3d 889, 892.

Under California law, [a] contract is unenforceable as illusory when one of the parties has the unfettered or arbitrary right to Calendar No.: Event ID:  TENTATIVE RULINGS

3128388  13 CASE NUMBER: CASE TITLE:  HINZ VS ECOLAB INC [IMAGED]  37-2023-00051801-CU-WT-CTL modify or terminate the agreement or assumes no obligations thereunder. (Asmus v. Pacific Bell, supra, 23 Cal.4th at pp. 15-16 (Asmus), 96 Cal.Rptr.2d 179, 999 P.2d 71; Scottsdale Ins. Co. v. Essex Ins. Co., supra, 98 Cal.App.4th at p. 95, 119 Cal.Rptr.2d 62; Principal Mutual Life Ins. Co. v. Vars, Pave, McCord & Freedman (1998) 65 Cal.App.4th 1469, 1488–1489, 77 Cal.Rptr.2d 479; Fabbro v. Dardi & Co. (1949) 93 Cal.App.2d 247, 251, 209 P.2d 91.) Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 385.

The EMAA includes the following provision: 6. Termination This Agreement may be terminated by the Company at any time by giving at least thirty (30) days' notice to current Associates. However, termination shall not apply to a Dispute which arose prior to the date of notice.

By the express terms of section 6, Ecolab has the unfettered and absolute right to terminate the EMAA.

Under Harris and the authorities cited therein, such provision renders the EMAA illusory and unenforceable. Although Defendants reference Plaintiff's illusory-based arguments in their reply, Defendants provide no argument or analysis on this issue. Nor to Defendants discuss or attempt to distinguish Harris or the authorities cited therein. Absent establishing that the EMAA is an enforceable contract under California law, Defendants fail to meet their burden on this motion.

If this tentative ruling is confirmed the Minute Order will be the final order of the court and the parties shall not submit any further order on this motion.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged to give notice to the Court and each other of their intention not to appear.

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