Judge: Christopher K. Lui, Case: 23STCV29001, Date: 2024-06-25 Tentative Ruling
Case Number: 23STCV29001 Hearing Date: June 25, 2024 Dept: 76
Plaintiff alleges that she was terminated for requesting accommodation of her physical disability.
Defendant Automobile Club of Southern California moves to compel arbitration and to stay this action.
TENTATIVE RULING
Defendant Automobile Club of Southern California’s motion to compel arbitration is GRANTED. Arbitration is to proceed before JAMS as to the claims against Defendant Automobile Club of Southern California only. The case is stayed pending arbitration, although co-Defendants Reed Group LLC and Cannon Cochran Management Services, Inc. may bring their own motions to compel arbitration by filing such motions within 30 days of this order.
ANALYSIS
Motion To Compel Arbitration and Stay Action
Existence of Arbitration Agreement
California favors arbitration. (Haworth v. Superior Court (2010) 50 Cal.4th 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.)
Defendants submit an Arbitration Agreement, the latest version of which was electronically signed by Plaintiff on December 9, 2019. (Declaration of Steven Wicker, ¶¶ 4 – 7, Exhs. B – E. Plaintiff does not dispute that she signed the arbitration agreement.
Plaintiff
alleges FEHA and wrongful termination claims based on her disability. The
relevant language of the Arbitration Agreement states as follows:
This Mutual
and Binding Arbitration Agreement (“Arbitration Agreement”)
requires you
and the Club to resolve through final and binding arbitration any and
all disputes
and claims between you and the Club, including, but not limited to,
claims
arising out of, related to, or connected with your employment or its termination.
Please read this Arbitration Agreement carefully as it contains
important
provisions about our agreement and the process governing the
arbitration
of all disputes between us. This
Arbitration Agreement means that both you and the Club are bound to use
arbitration as the only means of resolving
virtually all
employment-related disputes and to forego any right either of us may
have to a
trial by judge or jury on issues covered by this Arbitration Agreement.
1. Claims
Subject to Arbitration.
To the
fullest extent permitted by law, the Club and you agree that any and all
Arbitrable
Claims (as defined below) will be subject to and be resolved exclusively by and
through final and binding arbitration without consolidation of such Arbitrable
Claims with the claims of any other person or entity. By entering into this Arbitration Agreement,
the Club and you agree that neither of us shall initiate or prosecute any
lawsuit relating to any Arbitrable Claim and that all such claims will be
subject to final and binding arbitration and will not be decided through
litigation before a judge or jury in federal, state or local courts;
provided,
however, that either the Club or you may seek interim or provisional equitable
relief on an individual basis from a court of competent jurisdiction if the
arbitration award may be rendered ineffectual in the absence of such relief.
“Arbitrable Claims” means all claims of any
nature or kind arising out of, relating to, or connected with this Arbitration
Agreement or your employment with the Club, including, but not limited to, your
application for employment, the hiring decision, your employment relationship
or the termination of your employment, between you and the Club and/or any of
its employees, agents, officers, or directors, except for Excluded Claims (as
defined below). Arbitrable Claims
include, but are not limited to, any and all claims based on any federal or
state constitution, statute, regulation, or ordinance or common law, including,
but not limited to, claims for (1) wrongful termination of employment,
harassment, employment discrimination or retaliation under Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, the Age
Discrimination in
Employment
Act, or any state or local discrimination laws such as the California Fair
Employment and Housing Act, Section 21.051 of the Texas Labor Code, Missouri
Human Rights Act, or the Maine Human Rights Act; (2) claims for fraud, breach
of contract or covenant (express or implied), unpaid wages and related claims,
defamation, emotional distress, or any other tort claims; (3) claims for
misappropriation of trade secrets or unfair competition; (4) any claims of any
nature arising out of, related to or connected with any benefit plan, including
without limitation any benefit plan covered by ERISA if such ERISA-covered
benefit plan also requires arbitration of any such claims; and, (5) any other
legal claims, causes or actions recognized by local, state or federal law,
regulations
or
ordinances, or federal or state constitutional provisions.
“Excluded Claims” means workers’ compensation
claims and claims for
unemployment
benefits. In addition, you are not prevented from filing any non-waivable
statutory claims, which include: (1) wage claims within the jurisdiction of a
local or state labor commissioner; (2) unfair labor practice charges filed
before the National Labor Relations Board or any other claims brought pursuant
to the National Labor Relations Act; and (3) administrative agency claims or
charges with the federal Department of Labor, the Equal Employment Opportunity
Commission or similar local or state agencies, such as the California
Department of Fair Employment and Housing.
This means that you may file such non-waivable statutory claims with the
appropriate agency that has jurisdiction
over them if
you wish, regardless of whether you decide to resolve them under this
Arbitration Agreement. However, if such
an agency completes its processing of your action against the Club, and you
thereafter choose to pursue your action further, you must do so only under this
Arbitration Agreement.
(Arbitration Agreement, Pages 1 – 3.)
The scope of the Arbitration Clause covers all
claims being asserted by Plaintiff in the Complaint.
The Court will proceed to address the Armendariz
factors.
Armendariz Factors:
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].)
However,
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].)
(1) Neutral arbitrators:
At ¶ 5 the Arbitration
Agreement provides for a procedure to strike then names from a list of 6 labor
and employment arbitrators drawn from the panel of the applicable arbitrable
forum.
Due to this procedure, this requirement is
satisfied.
(2) More than minimal discovery:
“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].)
¶ 6 of the Arbitration Agreement provides:
In any
arbitration proceeding under this Arbitration Agreement, you and the Club
each have
the right to take the depositions of up to three individuals and any expert
witness(es)
designated by the other party, and to serve document requests and up to 35
special
interrogatories. The arbitrator has the authority to allow additional
discovery,
including
the issuance of subpoenas, that he or she deems appropriate based upon a
showing
of “good cause,” taking into account the parties’ mutual desire to have a
simple,
informal,
fast, and cost-effective dispute resolution mechanism.
There is
no indication that the parties will have an inadequate access to discovery.
This requirement is satisfied.
(3) Written award:
¶ 7 the Arbitration Agreement provides in pertinent part: “The arbitrator’s award must be in writing and include a statement of the conclusions and findings upon which the decision is based.”
This requirement is satisfied.
(4) All types of relief available in court:
¶ 7 of the Arbitration Agreement provides in pertinent part:
The
arbitrator has the authority to grant or deny all monetary or equitable relief
on
an
individual basis that would have been available to you or the Club had the
dispute
been
litigated in court under applicable law (as well as decide motions and
discovery
issues, as described above).
This requirement is satisfied.
(5) Does not require employee to pay unreasonable costs or any arbitrator’s fees or expenses as a condition to access to arbitration:
¶ 4 provides:
The Club will
pay the costs and expenses unique to the arbitration process, i.e., the costs
and expenses beyond those you would have been required to pay had your
Arbitrable Claim been brought in court, such as the entire fee of the
arbitrator for his or her services and any associated costs incurred by the
arbitrator or the arbitration service provider.
However, if you (rather than the Club) are the one who initiates
arbitration, you will be responsible for paying the initial case
management/filing fee to JAMS or AAA regardless of whether you initially
brought your action in court and paid a filing fee with the court, so long as
those fees do not exceed what you would have paid as an initial filing fee to
bring a lawsuit in court. Additionally,
if the law of the state where you reside when you file the arbitration demand
requires the Club to pay a higher share of the filing fee, the Club will do so,
up to the entire amount if that is what the law requires.
This
requirement is satisfied.
Accordingly,
the minimum Armendariz requirements are satisfied.
As such,
the Court finds that an agreement exists whereby Plaintiff agreed to submit all
of the claims asserted against Defendant Automobile Club of Southern California
in her Complaint to mandatory arbitration. The burden shifts to Plaintiff to
demonstrate that the arbitration agreement should not be enforced.
Plaintiff argues that the agreement is illusory
because of Defendant’s veto power as to arbitrating at AAA, and the Arbitration
Agreement thereby lacks mutuality and is illusory. This argument is meritless.
The default arbitral forum if the parties cannot agree on either JAMS or AAA is
JAMS. In this regard, ¶ 4 provides in pertinent part:
Upon the initiation of an Arbitrable Claim, the Club and you must
mutually agree that the arbitration will be submitted to either JAMS or AAA. If the Club and you are unable to reach an
agreement on either JAMS or AAA, then the matter will be submitted to JAMS and
the JAMS Rules will govern the arbitration. If for whatever reason JAMS and
AAA cannot or will not process the arbitration, then the Club and you may agree
to conduct the arbitration pursuant to the administration and rules of another
mutually agreeable private alternative dispute resolution organization. If the Club and you cannot agree on another
organization, then either of us may seek an order from a court of competent
jurisdiction selecting an arbitrator pursuant to the Federal Arbitration Act or
applicable state law.
(Bold emphasis added.)
Plaintiff has not
demonstrated that JAMS cannot or will not process the arbitration. As such,
Plaintiff’s request that the Court select the arbitration is denied, as the
last sentence does not come into play.
By way of the Reply,
Defendant apparently appears for the first time to bootstrap co-Defendants Reed
Group LLC and Cannon Cochran Management Services, Inc. However, those
Defendants did not join in this motion and, as such, the Court does not order
the case to arbitration as to those Defendants, who may bring their own motions
to compel arbitration if desired.
As such, the motion to
compel arbitration is GRANTED. Arbitration is to proceed before JAMS as to the
claims against Defendant Automobile Club of Southern
California only. The case is stayed pending arbitration, although co-Defendants
Reed Group LLC and Cannon Cochran Management Services, Inc. may bring their own
motions to compel arbitration by filing such motions within 30 days of this
order.