Judge Christopher K. Lui, Case Number: 22STCV28777, Date: 2023-11-08 Tentative Ruling

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein. Counsel must contact the staff in Department 76 to inform the Court whether they wish to submit on the tentative, or to argue the matter. As required by Rule 3.1308(a), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue.

Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776.

Per Rule of Court 3.1308, if notice of intention to appear is not given, the Court may adopt the tentative ruling as the final ruling.

Plaintiff alleges that she was subjected to racial discrimination and eventually terminated in retaliation for her complaints.

Defendant Gulfstream Aerospace Corporation moves to compel arbitration and dismiss or stay this action.

Defendant Gulfstream Aerospace Corporation’s motion to compel arbitration is GRANTED.

The litigation is ordered stayed pending arbitration. (Code Civ. Proc., § 1281.4.)

The parties are ordered to meet and confer to agree upon the arbitral forum. If the parties are unable to agree, Defendant may request a hearing to resolve the dispute. Regardless of the forum, Defendant will bear all costs of arbitration and the arbitrator’s fees.

Defendant requests that the Court take judicial notice of various superior court rulings in other case is DENIED. These are irrelevant as they do not hold precedential value vis-à-vis this motion.

The Court need only take judicial notice of relevant materials. (Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063, overruled in part on other grounds noted in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1276.) The Court may deny a request for judicial notice of material unnecessary to its decision. (Rivera v. First DataBank, Inc. (2010) 187 Cal.App.4th 709, 713.)

Defendant Gulfstream Aerospace Corporation moves to compel arbitration and stay this action.

California favors arbitration. (Haworth v. Superior Court (2010) 50 Cal.4^th 372, 380.) Civ. Proc. Code, §1281.2 provides:

On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such 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, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for the revocation of the agreement.

Under California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1343; Code Civ. Proc., § 1281.) A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving by a preponderance of evidence any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356.) The court may weigh the evidence by considering affidavits, declarations, documents and oral testimony. (Id. at 357.)

Defendant submits a Dispute Resolution Agreement, with an Effective Date of 04/10/03. (Declaration of Matthew Van Dyke, Exhibit A.) This 10-page Agreement only addresses the steps of the Dispute Resolution policy, the final step of which is arbitration.

Please click on each policy document link (not the checkbox) to read the policy. By doing this I acknowledge that I have read the policy and understand how this policy affects me and understand the guidelines and requirements of each.

I acknowledge that l have reviewed and understand the documents listed above. Further I understand that, as an employee of (your Company Name goes here), I am expected to comply fully with the policies set forth and any acknowledgment l have made are true and accurate to the best of my knowledge. Furthermore, I agree to notify Human Resources if, in the future, I become aware of a violation of these policies. I realize that failure to observe and comply with these policies could result in discipline, up to and including termination of employment. In addition to disciplinary actions, I realize that violation of these documents may result in civil or criminal fines and/or imprisonment.

Plaintiff’s electronic signature dated 07/27/2018 appears directly below, and the “I Agree” box is checked.

Importantly, the Dispute Resolution Agreement does not disclaim any binding contractual effect, but instead indicates that all employees will be subject to the policies contained therein:

This policy (“DRP” or the “Policy”) applies to all applicants for employment, and current employees of Gulfstream Aerospace Corporation, a Delaware corporation, and all of its direct and indirect subsidiaries (collectively the “Company”). The Policy applies to all employees who were employed by the Company while the Policy or any version was in effect (collectively referred as the “Employee” or “Employees”). The Policy will not apply to employees who are covered under a collective bargaining agreement or not covered by U.S. law.

Plaintiff argues that arbitration agreements contained in employee handbooks are not binding, citing Sparks v. Vista Del Mar Child & Family Services (2012) 207 Cal.App.4th 1511. However, Sparks is distinguishable because the circumstances under which the Sparks court held that an employee handbook arbitration clauses could not be binding upon an employee are not present in this case:

The Handbook, which was “distributed” to all employees, included in one of many clauses an arbitration clause not prominently distinguished from the other clauses. The arbitration provision is not specifically highlighted, and there is no place for the employee to acknowledge it in writing. Interestingly, defendant corrected this deficiency in the later handbook, which plaintiff did not acknowledge in writing receiving, by providing that an employee had to sign an arbitration provision.

A relevant case in California is Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164 [69 Cal. Rptr. 3d 223] (Mitri), which, as here, involved an employee handbook stating that “ ‘[a]ny dispute arising out of employment with the Company, as allowed by law, will be settled by binding arbitration.’ ” (Id. at p. 1167.) The court held that the employer did not establish the [*1520] employee's consent to binding arbitration of claims arising out of the employment relationship because the handbook also stated that “ ‘[a]s a condition of employment, all employees are required to sign an arbitration agreement,’ ” and further stated that “ ‘[e]mployees will be provided a copy of their signed arbitration agreement.’ ” (Id. at pp. 1167, 1168.) According to the court in Mitri, these two provisions indicated an intent to have employees sign a separate arbitration agreement, which the employee in that case did not sign. (Id. at pp. 1170–1171.) The court said that the acknowledgment of receipt form signed by employees did not constitute evidence of an employee's acquiescence to the arbitration agreement provision in the employee handbook because the acknowledgment form relegated the employee handbook's status to “ ‘an excellent resource for employees with questions about the Company.’ ” (Id. at p. 1173.) The court further stated that the employee handbook was “‘designed to acquaint new employees … with Human Resource policies, operational issues, employee services, and benefits that reflect the desire to provide a professional work environment.’ ” (Ibid.) The court noted that the acknowledgment of receipt form made no reference to an agreement by the employee to abide by the handbook's arbitration provision. (Ibid.) Although Mitri is distinguishable from the instant case, its observations as to the purpose of an employee handbook and the significance of the acknowledgment form are applicable to the Handbook and acknowledgment form here. (See Romo v. Y-3 Holdings, Inc. (2001) 87 Cal.App.4th 1153, 1159–1160 [105 Cal. Rptr. 2d 208]; Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 804–805 [137 Cal.Rptr.3d 773].)

The language in the Handbook here, as the language at issue in Mitri, supra, 157 Cal.App.4th 1164, suggests that the Handbook, which was “distributed” to all employees, was informational rather than contractual. Thus, because defendant failed to point out or call attention to the arbitration requirement in the acknowledgment, plaintiff should not be bound to arbitrate.

No authorities have been cited to us that support defendant's position. On the contrary, whatever authorities there are support plaintiff's position. (See, e.g., Hubner v. Cutthroat Communications, Inc. (2003) 318 Mont. 421 [80 P.3d 1256, 1260]; Snow v. BE&K Construction Co. (D.Me. 2001) 126 F.Supp.2d 5, 11–15; Ex Parte Beasley (Ala. 1998) 712 So.2d 338, 340, 341.) To support a conclusion that an employee has relinquished his or her right to assert an employment-related claim in court, there must be more than a boilerplate arbitration clause buried in a lengthy employee handbook given to new employees. At a minimum, there should be a specific reference to the duty to arbitrate employment-related disputes in the acknowledgment of receipt form signed by the employee at commencement of employment. The increasing phenomenon of depriving employees of the right to a judicial forum should not be enlarged by imposing upon employees an obligation to arbitrate based on one obscure clause in a large employee handbook distributed to new employees for informational purposes.

Plaintiff signed a form acknowledging receipt of the Handbook, which Handbook contained “important information about [defendant's] general personnel policies” and included an “understand[ing]” he would be “governed” by its contents. That should not, under the circumstances, qualify as an agreement to be bound by the arbitration clause. At best, it expressed the employee's understanding that he must comply with personnel policies and obligations, rather than an agreement to arbitrate.

Moreover, the Handbook expressly provides: “This Handbook is not intended to create a contract of employment … .” One authority has noted, “Efforts by an employer to have it both ways by claiming that a handbook is not a contract [(as here)] but that an employee acknowledging receipt of a handbook has contracted to arbitrate any disputes with his or her employer can backfire.” (1 Domke on Commercial Arbitration, supra, § 16:11, p. 16-67.) Courts have determined that such a provision renders the matter ambiguous, and that the ambiguity is to be construed against the employer that drafted the document. (See, e.g., Hubner v. Cutthroat Communications, Inc., supra, [*1523] 80 P.3d at p. 1261.) Also suggesting the noncontractual aspect of the Handbook is defendant's acknowledgment that it “distributed” the Handbook to all of the employees.

(Sparks v. Vista Del Mar Child & Family Services (2012) 207 Cal.App.4th 1511, 1519-23 [bold emphasis and underlining added].)

Rather than Sparks, this case is closer to v. Balco Properties Ltd. (2015) LLC, 235 Cal.App.4th 165, wherein the arbitration policy was a separate document, clearly labeled as an arbitration policy, which did not indicate a separate arbitration agreement would need to be signed, nor did it disclaim contractual rights. (Serafin v. Balco Properties Ltd. (2015) LLC, 235 Cal.App.4th 165, 172-75.)

The scope of “Covered Claims” is set forth at Page 2 of the Dispute Resolution policy, “Level 4 – Arbitration” as follows:

Covered Claims –Covered Claims are employment-related claims between an individual Employee and the Company, its parents, subsidiaries and affiliates, and their respective individual managers and other present or former employees. Covered Claims involve a claim of a legal right, obligation or entitlement regarding or arising from the employment relationship[1]. Covered Claims include, but are not limited to, the following:

1. Claims relating to involuntary terminations, such as layoffs and discharges (including constructive discharges);

2. Employment discrimination and harassment claims, based on, for example, age, race, sex, religion, national origin, veteran status, citizenship, disability or other characteristic protected by law; Retaliation claims for legally protected activity, and/or for whistleblowing;

4. Claims relating to workplace accommodation due to physical or mental disabilities;

5. Tort claims, intentional torts, negligence, defamation, invasion of privacy, infliction of emotional distress, etc.;

1. Claims for benefits under a Company benefit plan, including those covered by Retirement Income Security Act of 1974 (ERISA);

2. Claims for workers’ compensation, violations of specific safety requirements or unemployment compensation benefits;

5. Claims against the Company or a present or former Employee which do not have any relationship to the Employee’s work or relationship to the Company;

6. Claims which are personal in nature and do not involve a claim of a legal right, obligation or entitlement.

Plaintiff’s claims for violation of FEHA, wrongful termination/retaliation, wage and hour violations and unfair business practices come within the scope of the arbitration agreement.

Plaintiff’s argument that the arbitration agreement is not an agreement, but simply a description of how Gulfstream expects its employees to act as work is not persuasive. The 10-page Dispute Resolution policy is how the employee agrees to resolve disputes, which has nothing to do with performing daily work duties.

Further, Plaintiff’s argument that the electronic acknowledgment form is not an agreement nor trustworthy is not persuasive. Plaintiff’s challenge to Van Dyke’s declaration is not well-taken. Under the three-step analysis the Court of Appeal has established for purposes of section 1281.2, a party seeking to enforce an arbitration agreement must initially present prima facie evidence of the existence of the agreement, which the opposing party may challenge. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058-59.) If the opposing party presents evidence challenging the authenticity of their signature, the burden shifts back to the moving party to prove by a preponderance of admissible evidence that the signature is genuine. (Id.)

Plaintiff contends that she “never knowingly entered into any agreement with Gulfstream, or agreed with Gulfstream in any fashion, that . . . both parties would be required to submit any legal claims against each other to arbitration.” (Donester Decl., ¶ 2.) This is more equivocal than the types of declarations that the Court of Appeal has held to be sufficient to raise a second-step challenge, such as a denial that she signed the agreement, (see, e.g., Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1065) or an assertion that she did not remember signing it and would not have done so if she knew of the agreement. (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 167; Ruiz v. Moss Bros. Auto Group, (2014) 232 Cal.App.4th 836, 840-41.) Moreover, Defendant’s moving papers have condensed the three-stage analysis by preemptively providing authenticating evidence with the opening brief: a declaration of Matthew Van Dyke, which describes the onboarding process at Gulfstream, establishes the security protocols for electronic signatures, and contends that Plaintiff electronically signed onboarding papers, including the dispute resolution procedures policy. (Van Dyke Decl., ¶¶ 4-9.) Plaintiff’s declaration does not directly contradict the Van Dyke Declaration, and the assertion that she did not “knowingly enter” an agreement does not preclude a finding that an agreement was formed. (See Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 758 (“It is hornbook law that failing to read an agreement before signing it does not prevent formation of a contract.”).) Thus, the Court finds that Defendant’s evidence establishes the authenticity of Plaintiff’s signature for purposes of this motion.

Plaintiff’s argument that there is nothing of value exchanged in the policy is not persuasive. Plaintiff and Defendant both receive the value of Plaintiff’s continued performance in exchange for wages/salary.

Acceptance/No Change in Terms of Employment The submission of an application, acceptance of employment or the continuation of employment by an individual shall be deemed to be acceptance of the DRP. No signature shall be required for the Policy to be applicable. The mutual obligations set forth in this DRP shall constitute a contract between the Employee and the Company but shall not change an Employee’s at-will relationship or any term of any other contract or agreement between the Company and Employee. This Policy shall constitute the entire agreement between the Employee and Company for the resolution of Covered Claims.

[A]n agreement to arbitrate may be express or implied so long as it is written. After restating the hard and fast rule that general contract law determines the enforceability of an arbitration agreement, our colleagues in Division One of our appellate district held: “This means that a party's acceptance of an agreement to arbitrate may be express (e.g., Mago v. Shearson Lehman Hutton Inc. (9th Cir. 1992) 956 F.2d 932 [agreement to [*384] arbitrate included in job application]; Nghiem v. NEC Electronic, Inc. (9th Cir. 1994) 25 F.3d 1437 [agreement to arbitrate included in handbook executed by employee]; Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105 [88 Cal. Rptr. 2d 664] [employer may terminate employee who refuses to sign agreement to arbitrate]) or implied-in-fact where, as here, the employee's continued employment constitutes her acceptance of an agreement proposed by her employer (Asmus v. Pacific Bell (2000) 23 Cal.4th 1, 11 [96 Cal. Rptr. 2d 179, 999 P.2d 71] [implied acceptance of changed rules regarding job security]; DiGiacinto v. Ameriko-Omserv Corp. (1997) 59 Cal.App.4th 629, 635 [69 Cal. Rptr. 2d 300] [implied acceptance of changed compensation rules]).” (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420 [100 Cal. Rptr. 2d 818].)

Here, plaintiff was offered employment on an at-will basis under the terms of the Employee Handbook. Plaintiff unequivocally accepted the offer of employment by commencing to work for TAP Worldwide, LLC, for which he was paid. Plaintiff's commencement of performance under the Employee Handbook constituted assent to its terms. Under California law, assent to an offer can occur either by way of performance under the contract or the acceptance of consideration. ( Civ. Code, § 1584 [“Performance of the conditions of a proposal, or the acceptance of the consideration offered with a proposal, is an acceptance of the proposal.”]; Davis v. Jacoby (1934) 1 Cal.2d 370, 378 [34 P.2d 1026] [“‘Performance of the conditions of a proposal, … is an acceptance of the proposal.’”]; Estate of Klauenberg (1973) 32 Cal.App.3d 1067, 1070 [108 Cal. Rptr. 669] [“Performance and acceptance of the consideration constitute … modes of acceptance.”]; Blaustein v. Burton (1970) 9 Cal.App.3d 161, 183 [88 Cal. Rptr. 319] [“‘“[The] acceptance of the consideration offered with a proposal, is an acceptance of the proposal”’”].) And page 9 of the Employee Handbook expressly addressed the effect of an employee's failure to execute the attached arbitration agreement. According to page 9, upon commencing employment, the employee was deemed to have consented to the agreement to arbitrate by virtue of acceptance of the Employee Handbook. Plaintiff cannot have it both ways, acceptance of the at-will job offer with all its emoluments and no responsibility to abide by one of its express conditions.

Neither these contractual terms nor this scenario were present in Sparks. Accordingly, defendants have demonstrated Tap Worldwide, LLC, and plaintiff entered into an arbitration agreement. Given the foregoing analysis we need not discuss the effect of Civil Code section 1584 which states, “Performance of the conditions of a proposal, or the acceptance of the consideration offered with a proposal, is an acceptance of the proposal.” Further, we need [*385] not address those cases which hold that when an employee signs an acknowledgment of receipt of an employee handbook, she or he is bound by its contents. And this includes an agreement to arbitrate contained within the employee handbook. (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215 [78 Cal. Rptr. 2d 533] (24 Hour Fitness) [acknowledgement referred to arbitration provision in employee handbook]; Boys Club of San Fernando Valley, Inc. v. Fidelity & Deposit Co. (1992) 6 Cal.App.4th 1266, 1271–1272 [8 Cal. Rptr. 2d 587] [party bound by incorporation of a contract into a performance bound]; Ware v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1972) 24 Cal.App.3d 35, 41 [100 Cal. Rptr. 791] [broker's signature on application that referred not to arbitration but to exchange rules which contained an agreement to arbitrate disputes]; Gear v. Webster (1968) 258 Cal.App.2d 57, 61 [65 Cal. Rptr. 255] [realtor who agreed to abide by association bylaws bound by arbitration agreement contained therein]; see Adajar v. RWR Homes, Inc. (2008) 160 Cal.App.4th 563, 569 [73 Cal. Rptr. 3d 17]; Knight et al., Cal. Practice Guide: Alternative Dispute Resolution (The Rutter Group 2015) ¶ 5:18, pp. 5-12 to 5-13.) Here, page 9 of the Employee Handbook expressly addresses the situation where an employee fails to execute the arbitration agreement and accepts employment. Given this specific contractual language, this is a stronger case for finding an agreement to arbitrate than the immediately foregoing incorporation by reference cases.

(Harris v. TAP Worldwide (2016) LLC, 248 Cal.App.4th 373, 384-85 [bold emphasis added].)

Where a party seeks to arbitrate nonwaivable statutory civil rights in the workplace (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 711-12), such as the FEHA claims involved here, there are:

five minimum requirements for the lawful arbitration of such rights pursuant to a mandatory employment arbitration agreement. Such an arbitration 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. Thus, an employee who is made to use arbitration as a condition of employment 'effectively may vindicate [his or her] statutory cause of action in the arbitral forum.' " (Citation omitted.)

(Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102.)

Initially, we see no reason why Armendariz's "particular scrutiny" of arbitration agreements should be confined to claims under FEHA. Rather, under the Supreme Court's analysis, such scrutiny should apply to the enforcement of rights under any statute enacted "for a public reason."

(Mercuro v. Superior Court (2002) 96 Cal. App. 4th 167, 180 [bold emphasis added].)

Armendariz held that to the extent that the arbitration agreement was silent on these issues, these requirements must be implied as a matter of law. (Armendariz, supra, 24 Cal.4th at pp. 106, 107, 113 [interpreted the agreement to provide for adequate discovery, a written arbitration award, and the employer's payment of arbitration costs].) To the extent that the agreement expressly limited these rights, Armendariz held that the agreement was contrary to public policy and unenforceable. (Id. at p. 104 [stated that a provision limiting damages was unlawful].)

(Sanchez v. Western Pizza Enterprises, Inc. (2009) 172 Cal.App.4th 154, 176 [bold emphasis added].)

3. Qualifications of a Neutral Arbitrator –The Arbitrator shall have a minimum of three years’ experience in the practice of or arbitration of employment law disputes or comparable experience in the applicable area of law.

An Arbitrator chosen by the parties must be available within a reasonable period of time to arbitrate the claim.

In addition, the Arbitrator must have no financial interest in the Company or outcome of the arbitration, or other potential conflict of interest with either party.

4. Arbitrator Selection – The Employee and the Company will attempt to agree on the Arbitrator. If the parties cannot agree within ten (10) days, the Company shall appoint a recognized and independent DR Service Provider, such as the American Arbitration Association, to provide lists of local Arbitrators to the parties to the extent that local Arbitrators possess the qualifications required by Paragraph 3, Qualifications of a Neutral Arbitrator. However, the parties will accept lists which include Arbitrators that are not local to the jurisdictions in question to the extent that qualified local Arbitrators are not available.

The DR Service Provider will provide each of the parties with a list of seven (7) arbitrators together with the subject arbitrators’ resumes and fee schedules. Each party may, within ten (10) days of the DR Service Provider’s transmittal date, reject any and all of the arbitrators on the list by so advising the DR Service Provider. Failure to advise the DR Service Provider in writing within ten (10) days of unacceptable arbitrators shall be deemed to be a party’s acceptance of any of the arbitrators on the list. The DR Service Provider will assign an arbitrator from those acceptable to both parties. If there are no mutually acceptable arbitrators on the first list, the DR Service Provider will provide the parties a second list of seven (7) arbitrators, from which each party may advise the DR Service Provider in writing of unacceptable arbitrators within ten (10) days of the DR Service Provider’s transmittal date. If there is no mutually acceptable arbitrator on that list, the DR Service Provider will provide a third list of at least five (5) arbitrators from which the parties will alternately strike names until only one arbitrator is left. The first strike will be determined by a flip of the coin. If the DR Service Provider cannot provide the requisite number of names or lists, the Company may select another DR Service Provider to add additional names or lists.

“Adequate discovery is indispensable for the vindication of statutory claims. (Citation omitted.) “ ‘[A]dequate’ discovery does not mean unfettered discovery … .” (Citation omitted.) And parties may “agree to something less than the full panoply of discovery provided in Code of Civil Procedure section 1283.05.” (Citation omitted.) However, arbitration agreements must “ensure minimum standards of fairness” so employees can vindicate their public rights. (Citation omitted).” (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 715-16[bold emphasis added].)

8. Discovery – Discovery is the process by which parties to a pending Covered Claim obtain certain non-privileged information in possession of the other party, which is relevant to the proof or defense of any Covered Claims. This includes information concerning the existence, description, nature, custody and location of any records, documents or other tangible things and the identity and location of persons having knowledge of any such matter. Consistent with the expedited nature of arbitration, discovery is subject to certain limitations set forth below, including the requirement that the parties shall complete all discovery no later than 30 days prior to the start of the arbitration hearing.

9. Disclosure of Witnesses and Documents – At least 20 calendar days before the

arbitration hearing, each party shall provide written notice to the other party of the names and addresses of all witnesses the party intends to call at the arbitration hearing, copies of all documents the parties intend to introduce, as well as the names and addresses of attorneys who will attend the hearing. The parties may supplement this information up to ten (10) calendar days prior to the hearing or as may be allowed for good cause by the Arbitrator.

10. Protective Orders – The Arbitrator may issue protective orders in response to a request by either party or by a third-party witness. Such protective orders may include, but are not limited to, sealing the record of the arbitration hearing, in whole or in part, to protect the privacy, trade secrets, proprietary information and/or other legal rights of the parties or the witnesses.

11. Depositions –May be allowed by agreement of the parties or by order of the Arbitrator.

12. General Limitations on the Obligation to Produce Documents – Each party has the right to request the production of relevant documents at the actual copying cost of the requesting party. Either party may submit a request to the Arbitrator for additional discovery, to resolve discovery disputes including claims regarding privileged documents or other pre-hearing disputes.

13. Discovery Disputes – The Arbitrator shall have the authority to resolve discovery disputes between the parties. In addition, if either party wants to bring a discovery dispute to the Arbitrator’s attention, the party must arrange for a teleconference with the Arbitrator and the other party. If the Arbitrator is unable to make a ruling at the end of the teleconference, the Arbitrator may schedule a meeting with the parties to resolve the discovery dispute. The party-seeking discovery must bring the discovery dispute to the attention of the Arbitrator.

14. Subpoenas – Each party may request the Arbitrator to subpoena witnesses or

documents for the arbitration hearing, pursuant to Section 7 of the Federal Arbitration Act, 9 U.S.C.A. sections 1-14, or the applicable state arbitration statute.

§ 7 requires the Arbitrator to issue a written opinion to the parties not more than 30 calendar days after the arbitration hearing, or 30 calendar days after the Arbitrators receipt of the parties’ briefs, whichever is later.

Authority of the Arbitrator – The Arbitrator shall act in accordance with the DRP and

may grant any remedy or relief that would have been available to an individual Employee

had the claim been asserted in court for a Covered Claim. The Arbitrator shall have the

authority to determine whether a dispute or any part thereof is a Covered Claim.

(5) Does not require employee to pay unreasonable costs or any arbitrator’s fees or expenses as a condition to access to arbitration:

Costs and Fees – The Company will pay (1) administrative fees other than $100.00 filing fee; (2) the Arbitrator’s fee and reasonable travel expenses; (3) the cost of renting an arbitration hearing room, if necessary; and (4) the Employee’s salary, if still employed by the Company, for the time spent at the arbitration hearing up to a maximum of seven hearing days. Each party shall pay its own experts’ and/or attorneys’ fees unless the Arbitrator awards reasonable experts’ and/or attorneys’ fees to the Employee.

As such, the Court finds that an agreement exists whereby Plaintiff agreed to submit all of the claims asserted in her Complaint to mandatory arbitration. The burden shifts to Plaintiff to demonstrate that the arbitration agreement should not be enforced.

The doctrine of unconscionability was summarized in Walnut Producers of California v. Diamond Foods, Inc. (2010) 187 Cal.App.4th 634, 645-48 as follows:

“ ‘To briefly recapitulate the principles of unconscionability, the doctrine has “ ‘both a “procedural” and a “substantive” element,’ the former focusing on ‘ “oppression” ’ or ‘ “surprise” ’ due to unequal bargaining power, the latter on ‘ “overly harsh” ’ … or ‘ “one-sided” ’ results.” [Citation.] The procedural element of an unconscionable contract generally takes the form of a contract of adhesion, “ ‘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.’ ” … [¶] Substantively unconscionable terms may take various forms, but may generally be described as unfairly one-sided.’ [Citation.]” (Citation omitted.)

“Under this approach, both the procedural and substantive elements must be met before a contract or term will be deemed unconscionable. Both, however, need not be present to the same degree. A sliding scale is applied so that ‘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.’ (Citations omitted.)

“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.]” (Citation omitted.)

Plaintiffs claim the Agreement is procedurally unconscionable because it is an adhesion contract. An adhesion contract is “a standardized contract … imposed upon the subscribing party without an opportunity to negotiate the terms.” (Citation omitted.) “The term signifies 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. [Citation.]” (Citation omitted.)

The California Supreme Court has consistently stated that “ ‘[t]he procedural element of an unconscionable contract generally takes the form of a contract of adhesion … .’ ” (Citations omitted.)

“Whether the challenged provision is within a contract of adhesion pertains to the oppression aspect of procedural unconscionability. A contract of adhesion is ‘ “ ‘ “imposed and drafted by the party of superior bargaining strength” ’ ” ’ and ‘ “ ‘ “relegates to the subscribing party only the opportunity to adhere to the contract or reject it.” ’ ” ’ (Citations omitted.) “[A]bsent unusual circumstances, use of a contract of adhesion establishes a minimal degree of procedural unconscionability notwithstanding the availability of market alternatives.” (Citation omitted.)

(Walnut Producers of California, supra, 187 Cal.App.4^th at 645-46 [bold emphasis added].)

Plaintiff argues that the arbitration agreement is adhesive because it was presented on a take-it-or-leave it basis, and Plaintiff was required to sign it as a condition of employment, as part of new-hire paperwork. The Court accepts, for purposes of argument, that these conditions made the contract adhesive, presented to Plaintiff on a “take it or leave it” basis, which presents only a modest degree of procedural unconscionability. (Nguyen v. Applied Medical Resources Corp. (2016) 4 Cal.App.5th 232, 248.)

However, Plaintiff’s argument that Defendant did not talk with Plaintiff about arbitration is not persuasive. The document itself explains arbitration at Page 7.

Under the sliding scale approach, then, Plaintiffs must demonstrate at least a substantial degree of substantive unconscionability.

“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.]” (Citation omitted

Plaintiff argues that the arbitration provision lacks mutuality in that it applies only applicants for employment, current employees and former employees, but not Gulfstream. Plaintiff argues that Gulfstream has not agreed to be bound by anything in this regard. This argument is not persuasive.

As noted above, the arbitration provision defines covered claims to include any employment-related claims arising from the employment relationship.

Plaintiff argues that the CPM is internally inconsistent. For example, litigation is mentioned nowhere in the document except one short paragraph which confusingly references the only alleged “agreement” the CPM and which simultaneously purports that: 1) an action by an employee against Gulfstream in court must be a bench trial and not a jury trial[2]; and 2) when an employee sues Gulfstream, he or she cannot do so as any part of a class action. (“The Employee and Company agree and hereby waive any right to jury trial for any Covered Claim. The Employee further agrees that no Covered Claim may be brought as a class or collective action either under this Policy or in court and that he/she will not act as a class or collective action representative or participate as a member of a class of claimants with respect to any Covered Claim.”)

The Employee and Company agree and hereby waive any right to jury trial for any Covered Claim. The Employee further agrees that no Covered Claim may be brought as a class or collective action either under this Policy or in court and that he/she will not act as a class or collective action representative or participate as a member of a class of claimants with respect to any Covered Claim.

Here, the above language clearly states that the parties are waiving the right to jury trial. Class action waivers in arbitration agreements are enforceable under the Federal Arbitration Act.
(Evenskaas v. Cal. Transit, Inc. (2022) 81 Cal.App.5th 285, 297-98.)

Here, the agreement relates to Plaintiff’s employment, which involves interstate commerce. See Declaration of Matthew Van Dyke, ¶ 2:

GAC designs, manufactures, sells, and services high-end aircraft. The company sells its aircraft to customers located around the world, including to several foreign governments. GAC’s principal manufacturing facility and headquarters are located in Savannah, Georgia and it has several other facilities in the United States and Mexico. GAC uses interstate communication networks including U.S. Mail, the Internet, and cellular phones, to run its business operations.

“The FAA applies when the contract “evidences a transaction involving interstate commerce.” (Citation omitted,.).” (Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 657.)

The DRP states that Plaintiff “waives all rights to pursue” her claims if she fails to submit her claim “within 30 days” at the Level 2, Level 3, and Level 4 process. These arbitrary and unilateral deadlines are only for the employee, and not Gulfstream. The three separate and unilateral deadlines purport to severely shorten the various statute of limitations periods Plaintiff is entitled to under California law. The DRP requires Plaintiff to “complete each level of the process before proceeding to the next level.” In contrast, Gulfstream has the unilateral and unfettered right to “bypass one or more steps prior to arbitration.” The DRP only prohibits “Claimants” (like Ms. Donester) from “retaliating against anyone for submitting a dispute to, or participating in DRP, as a party, witness or otherwise.” Tellingly, there are no restrictions against Gulfstream HR or Gulfstream management retaliating against a Claimant for submitting a dispute. For the “Level 4-Arbitration” process, Gulfstream provides five pages of restrictions and purported rules, including specific choice of evidence law, expedited discovery, arbitrator limitations, and limits on witness and document disclosures which severely limit Plaintiff’s ability to pursue her FEHA and other claims, in contrast to state court proceedings.

First, the details regarding arbitration bolster, rather than undermine, the enforceability of the arbitration clause.

Second, contractually shortened limitations periods have been upheld where the triggering event is immediate and obvious. (Zamora v. Lehman (2013) 214 Cal.App.4th 193, 205-08.) As it pertains to the motion to compel arbitration, the Court construes Defendant bringing this motion to compel without raising the contractual statute of limitations as a waiver of that limitations period.

Plaintiff also argues that the retaliation clause does not apply to Defendant, but this would prohibit an employee of Gulfstream from retaliating against an employee for submitting a dispute.

All Employees are prohibited from retaliating against anyone for submitting a dispute to or participating in DRP, as a party, witness or otherwise. Any person having knowledge of such retaliation shall immediately notify their supervisor or the Human Resources department.

In light of the foregoing, the Court does not find sufficient substantive unconscionability to rendering the entire agreement unenforceable.

The litigation is ordered stayed pending arbitration. (Code Civ. Proc., § 1281.4.)

[1] A clue to the types of claims the company may bring against the employee is set forth at Page 2 “Interim Relief”:

Interim Relief

For claims involving alleged breach of Employee’s non-competition, non-solicitation, fiduciary, or confidentiality obligations, as well as claims involving trademarks, trade secrets, business know-how or intellectual property, either the Employee or the Company may, without inconsistency with this Policy, apply to any court of competent jurisdiction and seek interim provisional, injunctive, or other equitable relief until the arbitration award is rendered or the Covered Claim is otherwise resolved.

To the extent that an employee breaches a contractual obligation, or misuses information obtained as an employee, these claims would be “regarding or arising from the employment relationship,” such that the company would be obligated to arbitrate such claims. Notably, Civ. Proc. Code, § 1281.8 recognizes that provisional relief to preserve the effectiveness of an arbitral award is permissible.

[2] Plaintiff does not cite where this language may be found.