Judge: Bruce G. Iwasaki, Case: 22STCV33039, Date: 2023-01-30 Tentative Ruling
Case Number: 22STCV33039 Hearing Date: January 30, 2023 Dept: 58
Judge
Bruce G. Iwasaki
Hearing Date: January
30, 2023
Case Name: Bree-Ahna Waller v. Aerotek,
Inc. et al.
Case
No.: 22STCV33039
Motion: Motion
to Compel Arbitration x2
Moving
Parties: Defendant
Aerotek, Inc. and Allegis Group, Inc.
Defendant
Medtronic, Inc.
Responding
Party: Plaintiff Bree-Ahna Waller
Tentative Ruling: The
Motion to Compel Arbitration is granted.
Background
In this
employment action, Bree-Ahna Waller (Plaintiff or Waller) sued Aerotek, Inc.,
Allegis Group, Inc., Medtronic, Inc., Ronald Zanetich, Harvey Lee, and
Christian Unknown for discrimination, harassment, retaliation, failure to
prevent discrimination, failure to provide reasonable accommodation, failure to
engage in the interactive process, whistleblower retaliation, wrongful
termination, negligent retention, and intentional infliction of emotional
distress. Plaintiff was a temporary
employee hired by Aerotek to work for Medtronic.
As alleged, in December 2018,
Plaintiff Waller was jired by Aerotek, a staffing agency, to work for Medtronic. Plaintiff is a Hispanic and Black woman.
Plaintiff alleges that she was passed over for a promotion despite being a top
performer and that other coworkers belittled her. For example, she alleges that when her
coworkers were discussing police brutality against Black Americans, one colleague
remarked to Plaintiff: “Weren’t you out
there looting?” After reporting those
incidents, she alleged that she was treated differently. She also later requested an accommodation to
care for her autistic son, but she alleged that Defendants created confusion by
submitting her for FMLA leave, which was ultimately denied. In October 2020, Plaintiff was terminated.
Two groups of
Defendants filed a motion to compel arbitration: Aerotek, Inc. and Allegis
Group, Inc. (Aerotek); and Medtronic, Inc.
The individual Defendants, Ronald Zanetich, Christian Harvey Lee, and
Christian Ramos joined in Medtronic’s motion.
Plaintiff opposes the motions, primarily on the ground that the
arbitration agreement is unconscionable.
The Court
grants Aerotek’s request for judicial notice of rulings in different state and
federal courts to the extent that those documents are court records. Thus, the Court grants notice of Exhibits 4,
7, 9, 11, 13, 15, and 17. (Evid. Code, §
452, subd. (d).) The request is denied
on all other exhibits because those documents are either tentative orders or
records that are not file-stamped.
Defendant
Medtronic’s request for judicial notice of documents filed in this case is
granted.
The Aerotek
Defendants filed objections to Plaintiff’s declarations. As to the declaration of Bree-Ahna Waller, the
Court sustains objection no. 8, and overrules all of the remaining objections. As to the declaration of Jacquelyn Saucer,
the Court sustains all objections.
The Court
finds that the agreement is not unconscionable and that there is a valid
agreement to arbitrate the labor dispute.
Legal Standard
Code of Civil
Procedure section 1281.2 authorizes the court to order arbitration of a
controversy if it finds the parties have agreed to arbitrate that dispute. Because the obligation to arbitrate arises
from contract, the court may compel arbitration only if the dispute in question
is one in which the parties have agreed to arbitrate. (Weeks v. Crow
(1980) 113 Cal.App.3d 350, 352.) Since
arbitration is a favored method of dispute resolution, arbitration agreements
should be liberally interpreted, and arbitration should be ordered unless the
agreement clearly does not apply to the dispute in question. (Id. at p. 353; Segal v. Silberstein
(2007) 156 Cal.App.4th 627, 633.) However,
there is no policy compelling persons to accept arbitration of controversies
which they have not agreed to arbitrate. (Weeks, supra, 113
Cal.App.3d at 353.)
The party
moving to compel arbitration has the initial burden to (1) affirmatively admit
and allege the existence of a written arbitration agreement, and (2) prove the
existence of that agreement by a preponderance of the evidence. (Rosenthal v. Great W. Fin. Sec. Corp, 14 Cal.
4th 394, 413.) Once this is met, the
burden shifts to the responding party to prove that the agreement is
unenforceable by a preponderance of the evidence. (Ibid.)
DISCUSSION
Agreement to Arbitrate
The document
at issue is the “Mutual Arbitration Agreement” (Agreement). The Agreement states, in part:
all disputes, claims, complaints, or
controversies (“Claims”) that I may have against Aerotek, Inc and/or any of its
subsidiaries, affiliates, officers, directors, employees, agents, and/or any of
its clients or customers (collectively and individually the “Company”), or that
the Company may have against me, including contract claims; tort claims;
discrimination and/or harassment claims; retaliation claims; claims for wages,
compensation, penalties or restitution; and any other claim under any federal,
state, or local statute, constitution, regulation, rule, ordinance, or common
law, arising out of and/or directly or indirectly related to my application for
employment with the Company, and/or my employment with the Company, and/or the
terms and conditions of my employment with the Company, and/or termination of
my employment with the Company (collectively “Covered Claims”), are subject to
confidential arbitration pursuant to the terms of this Agreement and will be
resolved by Arbitration and NOT by a court or jury. The parties hereby forever
waive and give up the right to have a judge or a jury decide any Covered
Claims.
The signature
section contains a field that is labeled “Name (Signature)” and a space for the
employee to print their name. On the
bottom of the page, there is a green checkmark indicating that the document was
“Electronically Signed on 05-Dec-2018, 03:14 PM EST by Bree-Ahna Waller.”
In
establishing the existence of an agreement to arbitrate, it is generally
sufficient for defendant to simply provide a copy of the arbitration agreement.
(Baker v. Italian Maple Holdings, LLC,
13 Cal. App. 5th 1152, 1160 (2017); Cal. Rules of Court, rule 3.1330.) “For purposes of a petition to compel
arbitration, it is not necessary to follow the normal procedures of document
authentication.” (Condee v. Longwood Management Corp. (2001), 88
Cal.App.4th 215, 218; Sprunk v. Prisma LLC (2017) 14 Cal. App. 5th 785,
793 (2017) (“unless there is a dispute over authenticity, it is sufficient for
a party moving to compel arbitration to recite the terms of the governing
provision.”). Accordingly, “a petitioner is not required to authenticate an
opposing party's signature on an arbitration agreement as a preliminary
matter in moving for arbitration or in the event the authenticity of the
signature is not challenged.” (Ruiz v. Moss Bros. Auto Group, Inc.
(2014) 232 Cal.App.4th 836, 846, original italics.)
Here, Waller argues the contract was
invalid because the parties did not mutually consent and there was inadequate
consideration. However, she does not
dispute the authenticity of her signature.
Therefore, she is deemed to have assented to the Agreement’s terms. (Marin Storage & Trucking, Inc. v.
Benco Contracting & Engineering, Inc. (2001) 89 Cal.App.4th 1042, 1049
[“ordinarily one who signs an instrument which on its face is a contract is
deemed to assent to all its terms”].)
Her argument for insufficient consideration is that she “was compelled
to sign the agreement under duress and based on fraudulent representations from
Defendants.” This argument is directed
towards the procedural unconscionability aspect and is discussed below.
As to the electronic signature, the
Declaration of Horacio Ramirez, the Employee Relations Manager of Aerotek (and
its parent company, Allegis Group, Inc.), explains that
as part
of the hiring process, prospective employees undergo an onboarding process
through a software system. (Ramirez Decl.
¶ 5.) This process requires that
Plaintiff enter significant personal information such as their Social Security
Number, date of birth, gender, race, cell phone number, e-mail address, marital
status, driver’s license number, and tax withholdings. (Ibid.) During the onboarding process, the very first
document that Plaintiff encountered was an “Electronic Disclosure” form
concerning electronic signatures:
By using
this website, I agree to use an electronic signature in lieu of a hand-written
signature. By electronically signing any documentation contained herein, I
agree to all the terms, conditions, and policies contained in these documents
and agree to be bound as though I had signed these documents in writing. I
further agree not to electronically sign any form without first reading it and
ensuring I have completed the form to the best of my knowledge.
If you
do not agree with the statements set forth above, please do not click the
Electronically Sign button below and call or email your point of contact.
However, please understand that failure to successfully complete the required
documentation within a timely manner could result in withdrawal of the job
offer. (Ramirez Decl., ¶ 9, Ex. A.)
Plaintiff
completed the “Electronic Disclosure” form on November 27, 2018 at 12:51 P.M.
EST. (Id. at ¶ 10.) Further, Plaintiff was required to select a
unique username and password during the onboarding process. (Id. at ¶ 11.) As she was required to sign the form before she
could begin employment, and Aerotek’s records indicate that Plaintiff executed
the forms, it follows that Plaintiff’s signature within the record was
“executed or adopted” by her “with the intent to sign the electronic record.”
(Civ. Code § 1633.2, subd. (h) [defining “electronic signature” for purposes of
the Uniform Electronic Transactions Act].) Once Defendant met its burden, the burden shifted to
Plaintiff to “produc[e] evidence of, and prov[e] by a preponderance of the
evidence, any fact necessary to the defense.” (Rosenthal v. Great Western
Fin. Securities Corp., supra,14 Cal.4th at p. 413.) Plaintiff
has not done so here.
Plaintiff’s
declaration corroborates the process detailed by Ramirez, but she contends that
she was surprised to see an arbitration agreement. (Waller Decl., ¶ 7.) She attests that she was concerned of signing
the agreement, but that Aerotek’s employees stated she could not begin her
employment unless she signed. (Id. at
¶ 8.) As mentioned above, this does not
challenge the authenticity of the Agreement, but goes to the procedural
unconscionability of the circumstances surrounding the contract’s execution. To the extent that Waller is asserting that
she failed to read the agreement or to understand its terms, the argument is
insufficient. (Bolanos v. Khalatian
(1991) 231 Cal.App.3d 1586, 1590 [“the general rule [is] that one who signs an
agreement cannot avoid its terms on the ground that he failed to read it.”]
The Court
finds that Defendant has met its initial burden of establishing the existence
of an agreement to arbitrate.
The arbitration agreement is enforceable
The
California Supreme Court has mandated “five minimum requirements for the lawful
arbitration of such rights pursuant to a mandatory employment arbitration
agreement.” Such an agreement is lawful if it “(1) provides for neutral
arbitrators, (2) provides for more than minimal discovery, (3) requires a
written award, (4) provides for all of the types of relief that would otherwise
be available in court, and (5) does not require employees to pay either
unreasonable costs or any arbitrators’ fees or expenses as a condition of
access to the arbitration forum. (Armendariz v. Foundation Health Psychcare
Services, Inc. (2000) 24 Cal.4th 83, 102.)
These
requirements are met here. (Ramirez Decl., Ex. A.) The Agreement incorporates
the Judicial Arbitration and Mediation Services (JAMS) rules. Rule 7 requires that a neutral arbitrator
conducts the arbitration; Rule 17 governs discovery, which generally requires
parties to cooperate in good faith for the exchange of non-privileged documents
and provide names of potential witnesses and experts. The rule also allows for depositions. Rule 24 requires a written Final Award,
including statements of the reasons for the Award, and provides for relief that
is “just and equitable” within the scope of the agreement; Rule 31(c) requires payment
of the initial JAMS Case Management fee.
Plaintiff contends
that the Agreement is procedurally and substantively unconscionable.
The arbitration agreement is not unconscionable.
Procedural unconscionability
“The
procedural element of the unconscionability analysis concerns the manner in
which the contract was negotiated and the circumstances of the parties at that
time. [Citation.] The element focuses on oppression or surprise. [Citation.]
‘Oppression arises from an inequality of bargaining power that results in no
real negotiation and an absence of meaningful choice.’ [Citation.] Surprise is
defined as ‘“the extent to which the supposedly agreed-upon terms of the
bargain are hidden in the prolix printed form drafted by the party seeking to
enforce the disputed terms.”’ [Citation.]” (Gatton v. T-Mobile USA, Inc. (2007)
152 Cal.App.4th 571, 581.)
Plaintiff argues
there was fraudulent representation on whether the Agreement was mandatory or
optional. First, the Court disagrees
that there was an inconsistency. Ramirez
averred that “[a]s a matter of policy, Aerotek contract employees are not
required to sign the arbitration agreement.”
(Ramirez, ¶
13.) Waller averred that Aerotek
employees informed her she could not begin her employment unless she signed the
Agreement. (Waller Decl., ¶ 8.) Ramirez did not, however, testify to the
effect of the lack of signature– he merely stated they are not required. The Agreement itself states that no
affirmative signature is required for the Agreement to be enforced. Therefore, whether Waller was required to sign
the agreement is not at issue because it appears the Agreement is enforceable
in any event.
As to her argument of economic
duress, this can apply “when one party has done a wrongful
act which is sufficiently coercive to cause a reasonably prudent person, faced
with no reasonable alternative, to agree to an unfavorable contract.” CrossTalk
Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 644.) Plaintiff makes no such showing of a wrongful
act here. As explained above, the
statements were not necessarily inconsistent and even if they were, a “predispute
arbitration agreement is not invalid merely because it is imposed as a
condition of employment.” (Lagatree v. Luce, Forward, Hamilton & Scripps
(1999) 74 Cal.App.4th 1105, 1122.)
Plaintiff
also contends that she was not provided a copy of the JAMS rules, but this is
not required nor was it hidden from her.
The hyperlink to the rules was embedded in the Agreement itself and she
accessed the form electronically, so she knew how to click on the link. “[T]he failure to attach a copy of the AAA
rules did not render the agreement procedurally unconscionable.” (Lane v. Francis Capital
Management LLC (2014) 224 Cal.App.4th 676, 691.)
Next, Plaintiff contends that the
Agreement prevents her from bringing claims with government agencies such as
the Labor Board. But the Agreement
expressly allows for that right, reserving for arbitration only if the
“federal, state or local administrative agency proceeding does not finally
resolve the Covered Claim.” Thus, this
contention is without merit.
Since it appears that the arbitration
agreement was mandatory, the Court agrees there is some level of procedural
unconscionability here. (Mills
v. Facility Solutions Group, Inc. (2022) 84 Cal.App.5th 1035, 1051 [“It is
undisputed the arbitration agreement is an adhesive contract because it was
imposed as a condition of employment”]; Ajamian v. CantorCO2e, L.P.
(2012) 203 Cal.App.4th 771, 796 [“The finding that the arbitration provision
was part of a nonnegotiated employment agreement establishes, by itself, some
degree of procedural unconscionability”].)
But it is minimal. “ ‘[A]bsent unusual circumstances,
use of a contract of adhesion establishes a minimal degree of procedural
unconscionability notwithstanding the availability of market alternatives.’ ” (Walnut
Producers of California (2010) 187 Cal.App.4th 634, 646, original italics.) Plaintiff offers no other reason as to why an adhesion contract
alone establishes more than minimal procedural unconscionability.
Substantive unconscionability
Plaintiff
contends that there is substantive unconscionability because there is a forced
waiver of class action and Private Attorneys General Act (PAGA) claims, insufficient
discovery, and a requirement that she pay certain fees.
“ ‘A
provision is substantively unconscionable if it “involves contract terms that
are so one-sided as to ‘shock the conscience,’ or that impose harsh or
oppressive terms.” [Citation.] The phrases ‘harsh,’ ‘oppressive,’ and ‘shock
the conscience’ are not synonymous with “unreasonable.” Basing an
unconscionability determination on the reasonableness of a contract provision
would inject an inappropriate level of judicial subjectivity into the analysis.
“With a concept as nebulous as ‘unconscionability’ it is important that courts
not be thrust in the paternalistic role of intervening to change contractual
terms that the parties have agreed to merely because the court believes the
terms are unreasonable. The terms must shock the conscience.” [Citations.]’ ” (Walnut Producers of California, supra,
187 Cal.App.4th at pp. 647-648.)
The Agreement
does prevent arbitration of “class
action, collective action, or representative action” claims. However, there is also a severability clause
that if any part of the Agreement is found to be “void, voidable, or otherwise
unenforceable, such a finding will not affect the validity of the remainder of
the Agreement, and all other parts and provisions remain in full force and
effect.” Thus, assuming that the above
language captures PAGA claims as well, it is invalid. (Viking River Cruises, Inc. v. Moriana (2022)
596 U.S. ___ [142 S.Ct. 1906, 1924-1925].)
But the severability clause operates to remove that waiver and enforce
the rest of the Agreement. (Id. at
p. 1925.) Thus, the waiver itself does
not create any substantive unconscionability.
As to
discovery, the JAMS rules provide more than minimal discovery. Plaintiff offers no actual argument on why those
rules are insufficient. Similarly, her
argument that she is required to pay fees is unfounded. She is only required to pay “up to the amount
of the initial filing fee to commence an action in a Court . . . and the
Company will pay any amount in excess of the filing fee.” This complies with Armendariz because
it does not impose fees on Plaintiff that are unique to arbitration. Accordingly, the Court finds that the
arbitration agreement is not substantively unconscionable.
The Court
accepts that there is some modicum of procedural unconscionability because of
the adhesive contract. But without any
substantive unconscionability, there are insufficient grounds to invalidate the
arbitration agreement.
Third parties
Plaintiff
argues that Defendants Medtronic, Inc., Ronald Zanetich, Christian Harvey Lee,
and Christian Ramos are not signatories to the Agreement and cannot compel her
to arbitration.
The Agreement
applies to Aerotek, Inc. “and/or any of its subsidiaries, affiliates, officers,
directors, employees, agents, and/or any of its clients or customers.”
Nonsignatories
sued as agents of a signatory may enforce an arbitration agreement. (Rowe v. Exline (2007) 153 Cal.App.4th
1276, 1284.) For example, in Dryer v.
Los Angeles Rams (1985) 40 Cal.3d 406, 418, the plaintiff sued the Rams and
various individuals “in their capacities as “ ‘owners, operators, managing
agents, and in control [sic] of’ ” the Rams for breach of contract. (Id.
at pp. 409–410, 418.) The Court of Appeal reversed the trial court’s denial of
defendants’ petition to compel arbitration, holding that if “the individual defendants,
though not signatories, were acting as agents for the Rams, then they are
entitled to the benefit of the arbitration provisions.” (Id. at p. 418.)
This concept is also evident in
staffing agency situations under an equitable estoppel theory. In Garcia v. Pexco, LLC (2017) 11
Cal.App.5th 782, plaintiff had an arbitration agreement with his employer, Real
Time Staffing Services. He sued Real Time and a worksite employer,
Pexco, for labor law violations. (Id. at pp. 784–785.) The appellate
court affirmed the order compelling arbitration, reasoning that even though
Pexco was a nonsignatory, it could compel arbitration because “all of [plaintiff’s]
claims are intimately founded in and intertwined with his employment
relationship with Real Time,” with whom he agreed to arbitrate “ ‘any dispute.’
” (Id. at pp. 787, 784.) Thus,
plaintiff could not “link Pexco to Real Time to hold it liable for alleged wage
and hour claims, while at the same time arguing the arbitration provision only
applies to Real Time and not Pexco.” (Id.
at p. 788.) As joint employers, Pexco and Real Time were agents of each
other in their dealings with Garcia. (Ibid.)
Here, Plaintiff
fails to address that her own Complaint alleges that all Defendants are “agents
of all other defendants in committing the acts alleged herein.” (Complaint, ¶ 7.) She alleges that “at all relevant times, one
or more of the defendants was the agent or employee, and/or acted under the
control or supervision, of one or more of the remaining defendants . . . [and
that] All actions of all defendants were taken by employees, supervisors,
executives, officers, and directors during employment with all defendants, were
taken on behalf of all defendants, and were engaged in, authorized, ratified,
and approved of by all other defendants.”
(Id. at ¶ 4.) She offers
no contrary legal authority as to why an arbitration agreement may not be
enforced against a party who is sued as an agent of the signatory. (Rowe v. Exline, supra, 153
Cal.App.4th at p. 1284.) Plaintiff’s claims
against the other nonsignatory co-Defendants are “rooted in [her] employment
relationship” with signatory Aerotek. (Garcia, supra, 11
Cal.App.5th at p. 787.)
Plaintiff’s
reliance on Jones v. Jacobson (2011) 195 Cal.App.4th 1, 12 is misplaced. There, the nonsignatory defendants,
investment companies, sought to invoke an arbitration agreement with an
affiliated company. However, the
plaintiff investors in that case did not sue the affiliated company itself. The Court of Appeal concluded that the
agreement strictly limited who the agreement applied to, which did not include
defendants. Thus, there was a lack of mutual intent at the time of contracting. (Id. at pp. 16-17.) Unlike Jones, Aerotek is a signatory
to the Agreement and is named as a Defendant.
The Court
finds that the arbitration agreement is applicable to Defendants Medtronic
Inc., Ronald Zanetich, Christian Harvey Lee, and Christian Ramos.
Accordingly, the motions to compel
arbitration are granted.