Judge Bruce G. Iwasaki, Case Number: 24STCV25104, Date: 2025-01-06 Tentative Ruling

In this employment action, Plaintiff Maria Silva (Plaintiff) filed a Complaint on September 30, 2024, alleging claims for FEHA violations and numerous wage and hour Labor Code claims against her former employer, Defendant PCAM, LLC.

On November 19, 2024, Defendant PCAM, LLC filed a motion to compel arbitration pursuant to the parties’ arbitration agreement. In opposition, Plaintiff argues the arbitration agreement is unenforceable.

Under Code of Civil Procedure section 1281.2, a court may order arbitration of a controversy if it finds that 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.)

Defendant moves to compel arbitration of Plaintiff’s claims and stay the matter pending arbitration.

Defendant seeks to compel arbitration based on a 2023 Arbitration Agreement. In support of the existence of an arbitration agreement, Defendant submits evidence that Plaintiff executed an Arbitration Agreement on October 3, 2023, as part of Defendant’s employee onboarding process. (Cooley Decl., ¶ 2, Ex. A.)

The Agreement provides that Plaintiff and Defendant “mutually agree that any and all of the following claim(s), dispute(s) and/or controversy(s) will be resolved exclusively by final and binding arbitration, and not by court action, in accordance with the provisions set forth herein.” (Cooley Decl., ¶ 2, Ex. A.) The Agreement continues by stating “Arbitration shall be the exclusive means of resolving all claims relating to termination, demotion, failure to promote or any other issue regarding the terms and conditions of employment, the events leading up to employment, statements made at any time regarding Employee’s employment at the Company, alleged violations of federal, state, and/or local statutes, claims based on any purported breach of duty arising in contract or tort, including but not limited to breach of contract, breach of the covenant of good faith and fair dealing, violation of public policy, harassment, discrimination or any other alleged violation of any statutory, contractual or common law rights, claims involving trade secret violations or unfair competition, claims alleging violation of wage and hour laws, and any other claim arising from or related to the employment relationship between the Company and Employee, including, but not limited to those under title VII of the Civil Rights Act of 1964, as amended, 42 USC section 2000 et seq.; Americans with Disabilities Act; Civil Rights Act of 1866, Civil Rights Act of 1991; 42 USC section 1981 et seq; Age Discrimination in Employment Act, as amended, 29 USC 621 et seq.; Equal Pay Act, as amended , 29 USC section 206(d); regulations of the Office of Federal Compliance, 41 CFR section 60 et seq.; and the California Fair Employment and Housing Act, California Government Code section 12940 et seq., but excluding ERISA claims . . ..” (Cooley Decl., ¶ 2, Ex. A.)

In opposition, Plaintiff questions “the authenticity and validity of the entire agreement” because the Agreement bearing her signature contains a date of October 3, 2010, but she did not begin working for Defendant until 2023. (Silva Decl., ¶ 1.) Plaintiff’s attempt to discredit the signature on the Agreement based on this clearly impossible date is unpersuasive. First, Defendant’s corresponding signature is dated 2023 and Defendant’s evidence is that the document was maintained in Plaintiff’s personnel file along with other documents presented to Plaintiff during her onboarding process in October 2023. (Cooley Decl., ¶¶ 2-3, Exs. A-B.) Further, although Plaintiff states she does not recall signing the Arbitration Agreement, she does not affirmatively state she did not sign an Arbitration Agreement or that the signature on the document is not hers. (Silva Decl., ¶¶ 1-14.) Based on the foregoing, it is clear that Plaintiff’s signature dated 2010 is merely a typo. There is no evidence that Plaintiff did not sign this Agreement during her onboarding employment process. (See e.g., Iyere v. Wise Auto Group (2023) 87 Cal. App. 5th 747, 756.) Moreover, this typo does not render the Agreement “void,” and no legal authority is cited to support this argument. (Opp., 4:6-17.) There is a fully executed Arbitration Agreement between the parties and Plaintiff’s discrimination and harassment claims fall within the scope of this Agreement.

Plaintiff argues that the Arbitration Agreement is unenforceable on two grounds; first, her claims cannot be compelled to arbitration based on the Ending the Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) and, secondly, the Arbitration Agreement is procedurally and substantively unconscionable.

The EFAA amends the Federal Arbitration Act (FAA).[1] The EFAA provides: “[A]t the election of the person alleging conduct constituting a sexual harassment dispute ... no predispute arbitration agreement ... shall be valid or enforceable with respect to a case which is filed under ... State law and relates to ... the sexual harassment dispute.” (9 U.S.C. § 402(a).) “The term ‘sexual harassment dispute’ means a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” (9 U.S.C. § 401(4).) “An issue as to whether this chapter applies with respect to a dispute shall be determined under Federal law.” (9 U.S.C. § 402(b).)

Plaintiff argues that her Complaint is subject to the EFAA based on her allegations of sexual harassment arising from her pregnancy during her employment. (Compl., ¶¶ 12-14, 79-91.)

Plaintiff asserts – and Defendant does not dispute – that harassment based on pregnancy is subject to the EFAA. (See Delo v. Paul Taylor Dance Foundation, Inc. (S.D.N.Y. 2023) 685 F.Supp.3d 173, 180.) Instead, Defendant challenges the application of the EFAA to Plaintiff’s Complaint on other grounds.

Defendant argues that Plaintiff has failed to sufficiently allege facts to state a claim for sexual harassment or sexual assault. Although there is no controlling authority on the issue of whether a harassment claim must be sufficiently pled for the EFAA to apply, such a standard is sensible under the circumstances -- ensuring there is a claim for harassment that goes beyond the mere label of a claim. More importantly, such a rule is supported by persuasive federal authority. (See Ding v. Structure Therapeutics, Inc. (N.D. Cal., Oct. 29, 2024, No. 24-CV-01368-JSC) 2024 WL 4609593, at *7 [“So, if Plaintiff plausibly pleads a sex-based hostile work environment claim, she pleads a sex harassment dispute within the meaning of the EFAA.”]; Delo v. Paul Taylor Dance Foundation, Inc., supra, 685 F.Supp.3d at pp. 181-182 [plaintiff must “plausibly allege[] conduct constituting sexual harassment”].)

The entirety of Plaintiff’s harassment claim is based on a vague allegation that she was told by an unidentified person that her pregnancy was “not good for the company.” (Compl., ¶ 12.) This allegation is insufficient. Further, for the reasons discussed below, the other allegations pertaining to adverse employment actions against her cannot form the basis of a harassment claim as a matter of law. (Compl., ¶ 14.)

To establish a hostile work environment claim under California law, a plaintiff must allege the conduct “created an intimidating, hostile, or offensive work environment” or otherwise “sufficiently offends, humiliates, distresses, or intrudes upon its victim, so as to disrupt the victim's emotional tranquility in the workplace, affect the victim's ability to perform the job as usual, or otherwise interfere with and undermine the victim's personal sense of well-being.” (Gov. Code, § 12923, subd. (a).)

When the severity of harassment is at issue “ ‘ “[t]hat inquiry requires careful consideration of the social context in which particular behavior occurs and is experienced by its target.... The real social impact of workplace behavior often depends on a constellation of surrounding circumstances, expectations, and relationships which are not fully captured by a simple recitation of the words used or the physical acts performed. Common sense, and an appropriate sensibility to social context, will enable courts and juries to distinguish between simple teasing or roughhousing ... and conduct which a reasonable person in the plaintiff's position would find severely hostile or abusive.” ‘ “ (Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 283.)

“With respect to the pervasiveness of harassment, courts have held an employee generally cannot recover for harassment that is occasional, isolated, sporadic, or trivial; rather, the employee must show a concerted pattern of harassment of a repeated, routine, or a generalized nature. [Citations.] That is, when the harassing conduct is not severe in the extreme, more than a few isolated incidents must have occurred to prove a claim based on working conditions.” (Lyle, supra, 38 Cal.4th at pp. 283–284.)

The comment that her pregnancy was “not good for the company” is neither pervasive nor sufficiently severe to support a cause of action for harassment.

Also, adverse employment actions, such as increased employment scrutiny, pretextual discipline, and demands that she eliminate her pregnancy-related work restrictions (Compl., ¶ 14), may constitute adverse employment actions that can support a claim for employment discrimination, but not harassment.

“Harassment includes but is not limited to ... [v]erbal harassment, e.g., epithets, derogatory comments or slurs on a basis enumerated in the Act.” (Cal. Code Regs., tit. 2, § 11019, subd. (b)(2)(A); see Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 129.) “ ‘[H]arassing conduct takes place “outside the scope of necessary job performance, conduct presumably engaged in for personal gratification, because of meanness or bigotry, or for other personal motives.” [Citation.] “Thus, harassment focuses 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.” ’ ” (Serri v. Santa Clara University (2014) 226 Cal.App.4th 830, 869; see Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 706.) “Harassment is not conduct of a type necessary for management of the employer's business or performance of the supervisory employee's job.” (Reno v. Baird (1998) 18 Cal.4th 640, 646.)

For example, the court in Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55 explained that “commonly necessary personnel management actions such as hiring and firing, job or project assignments, office or work station assignments, promotion or demotion, performance evaluations, the provision of support, the assignment or nonassignment of supervisory functions, deciding who will and who will not attend meetings, deciding who will be laid off, and the like, do not come within the meaning of harassment. These are actions of a type necessary to carry out the duties of business and personnel management. These actions may retrospectively be found discriminatory if based on improper motives, but in that event the remedies provided by the FEHA are those for discrimination, not harassment. Harassment, by contrast, consists of actions outside the scope of job duties which are not of a type necessary to business and personnel management. This significant distinction underlies the differential treatment of harassment and discrimination in the FEHA.” (Id. at pp. 64–65.)

Because the Complaint fails sufficiently to allege a claim for harassment, the EFAA does not apply to Plaintiff’s Complaint. Accordingly, the EFAA does not bar enforcement of the Arbitration Agreement.[2]

In opposition, Plaintiff also argues that the Arbitration Agreement is both procedurally and substantively unconscionable.

If a court finds as a matter of law that a contract or any clause of a contract is unconscionable, the court may refuse to enforce the contract or clause, or it may limit the application of any unconscionable clause so as to avoid any unconscionable result. (Civ. Code, § 1670.5, subd. (a).) “An agreement to arbitrate, like any other contract, is subject to revocation if the agreement is unconscionable.” (Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 83 [citing Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 98].)

“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. [Citation.] Under this standard, the unconscionability doctrine ‘ “has both a procedural and a substantive element.” ’ [Citation.] ‘The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power. [Citations.] Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided.’ [Citation.] [¶] Both procedural and substantive unconscionability must be shown for the defense to be established, but ‘they need not be present in the same degree.’ [Citation.] Instead, they are evaluated on ‘ “sliding scale.” ’ [Citation.] ‘[T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to’ conclude that the term is unenforceable. [Citation.] Conversely, the more deceptive or coercive the bargaining tactics employed, the less substantive unfairness is required. [Citations.] A contract's substantive fairness ‘must be considered in light of any procedural unconscionability’ in its making. [Citation.] ‘The ultimate issue in every case is whether the terms of the contract are sufficiently unfair, in view of all relevant circumstances, that a court should withhold enforcement.’ ” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125–126.) “The burden of proving unconscionability rests upon the party asserting it.” (OTO, supra, 8 Cal.5th at p. 126.)

Plaintiff first argues the Arbitration Agreement is procedurally unconscionable because the arbitration provision was a condition of employment and offered on a take-it-or leave it basis. That is, Plaintiff had no ability to negotiate the terms of the Arbitration Agreement, and Defendant made no effort to explain its terms to Plaintiff. (Silva Dec., ¶¶ 3, 5-8, 13.) In sum, Plaintiff could either sign the Agreement or find another job.

Additionally, Plaintiff represents that she did not know what “arbitration” was; that is, she did not realize that agreeing to arbitration meant that she was giving up her rights, and no one explained this to her. (Silva Decl., ¶¶ 10-12.)

Generally, given the take it or leave it nature of the contract, the arbitration agreement suffers from some minimal degree of procedural unconscionability. It is an adhesive contract, as are most employment agreements; “few employees are in a position to refuse a job because of an arbitration requirement.” (Armendariz, supra, 24 Cal.4th at p. 115.) Here, however, the Arbitration Agreement itself states that “Employee and the Company acknowledge and agree that it is not mandatory for Employee to enter into this Agreement in order to obtain and/or continue employment with the Company.” (Cooley Decl., ¶ 2, Ex. A.) As such, by its own terms, it was not offered on a take it or leave it basis.

Moreover, Plaintiff’s purported failure to understand the terms of the arbitration provision does not add to the procedural unconscionability of the Arbitration Agreement. (Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 88 [“[S]imply because a provision within a contract of adhesion is not read or understood by the nondrafting party does not justify a refusal to enforce it.”].)

Similarly, the fact that Plaintiff is a Spanish speaker with allegedly limited English proficiency does not add to the procedural unconscionability. First, there is insufficient evidence that her employer knew she only spoke English with limited proficiency and is unclear what limited proficiency means under the circumstances; further, her onboarding documents were given to her by an PCAM employer who spoke Spanish, and Plaintiff does not submit any evidence that she asked for any documents in Spanish or asked any questions about the contents of the documents. (Silva Decl., ¶¶ 5-12.) As such, no translation was required; the absence of a translation, then, does not contribute to the Agreement's procedural unconscionability.

Finally, Plaintiff argues the Arbitration Agreement is procedurally unconscionable because the agreement failed adequately to specify key arbitration procedures, including failing to attach the referenced AAA rules.

In Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, the court observed “[t]he failure to attach a copy of arbitration rules could be a factor supporting a finding of procedural unconscionability where the failure would result in surprise to the party opposing arbitration” (Id. at 690), but analyzed numerous cases and concluded the employer's failure to attach the arbitration rules “did not render the agreement procedurally unconscionable. There could be no surprise, as the arbitration rules referenced in the agreement were easily accessible to the parties—the AAA rules are available on the Internet. [Citations.] In addition, [the plaintiff] ... does not appear to lack the means or capacity to locate and retrieve a copy of the referenced rules. Finally, the arbitration agreement at issue clearly specified a particular set of AAA rules, and it did not modify those rules in any manner.” (Id. at pp. 691–692.) Lane concluded, “[i]n the absence of oppression or surprise, we decline to find the failure to attach a copy of the AAA rules rendered the agreement procedurally unconscionable.” (Id. at p. 692.)

An argument of surprise is not well taken where – as in Lane – the rules referenced in the agreement are easily available on the Internet, and Plaintiff does not claim she lacks the means or capacity to locate and retrieve a copy.

Thus, there is no procedural unconscionability arising from the inception of the arbitration agreement. Although the Court’s analysis on unconscionability can end here, the Court also finds that there is no substantive unconscionability.

The only specifically identified substantively unconscionable provision of the Agreement is the purported class action waiver. The reply does not address this argument but merely argues that there is no procedural unconscionability.

As for the class action waiver, however, Defendant has not sought to enforce that provision and it is not even at issue since Plaintiff has not raised any class or PAGA claims. Lastly, it is now well settled that class action waivers are enforceable under the FAA. (See AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 344 [applying the FAA to invalidate California rule prohibiting class action waivers in consumer contracts of adhesion]; Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 362–366 [recognizing validity of class action waivers under the FAA in employment contracts].) Along these lines, Plaintiff has not directed the Court’s attention to any case which supports her contention that a waiver of representative claims, other than PAGA claims, is substantively unconscionable. (See Poublon v. C.H. Robinson Company (9th Cir. 2017) 846 F.3d 1251, 1264.)

Plaintiff has not demonstrated unconscionability. Thus, Plaintiff has not carried her burden of showing the Arbitration Agreement is unenforceable.

Accordingly, the Court grants Defendant PCAM, LLC’s motion to compel arbitration. The matter is stayed pending arbitration.

[1] Defendants take the undisputed position that the Federal Arbitration Act (FAA) applies to its Arbitration Agreement with Plaintiff. (Mot., 5:19-21.)

[2] Defendant also argues that, even if the EFAA applies, it only applies to the sexual harassment related claim and Plaintiff’s other claims must be compelled to arbitration. That is, the sexual harassment claim should be severed. This argument is not well taken; when the EFAA applies, it precludes arbitration of all the other claims of the complaint as well. (See Doe v. Second Street Corp. (2024) 105 Cal.App.5th 552, 574; Liu v. Minoso Depot CA, Inc. (2024) 105 Cal.App.5^th 791, 802-805; Johnson v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F.Supp.3d 535, 558-559; Turner v. Tesla, Inc. (N.D. Cal., Aug. 11, 2023, No. 23-CV-02451-WHO) 2023 WL 6150805.)

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