Judge: Colin Leis, Case: 22AHCV00040, Date: 2022-10-14 Tentative Ruling

Case Number: 22AHCV00040    Hearing Date: October 14, 2022    Dept: 3

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES – NORTHEAST DISTRICT

DEPARTMENT 3

MOVING PARTY:                Defendant Worley Group Inc.

RESPONDING PARTY:       Plaintiff Monica Rico

Defendant Worley Group Inc.’s to Compel Arbitration and Dismiss Plaintiff’s Representative PAGA Action 

The court considered the moving papers, opposition, and reply filed in connection with this motion. 

BACKGROUND

            On January 24, 2022, Plaintiff Monica Rico (“Plaintiff”) filed this Private Attorneys General Act (“PAGA”) action individually and on behalf of all other aggrieved employees against her former employer Defendant Worley Group Inc. (“Defendant”). Defendant moves for an order compelling Plaintiff’s individual PAGA claim to arbitration and dismissing her representative PAGA action.

REQUESTS FOR JUDICIAL NOTICE

            On August 19, 2022, Defendant filed a request for judicial notice of the American Arbitration Association’s Employment Arbitration Rules and Mediation Procedures, amended and effective November 1, 2009 (the “AAA Rules”), attached to the declaration of Vi Applen as Exhibit 9. The court grants the unopposed request for judicial notice. (Evid. Code., § 452, subd. (h) [providing that a court may take judicial notice of facts “that are not reasonably subject to dispute and are capable of determination by resort to sources of reasonably indisputable accuracy”].)

            On October 3, 2022, Plaintiff filed a request for judicial notice of several Los Angeles Superior Court orders (Exhibits A-D) and the California Supreme Court’s docket for Case No. S274671, Adolph v. Uber Technologies (Exhibit E). The court grants the request. (Evid. Code., § 452, subd. (d) [providing that a court may take judicial notice of any court records of this state].)

            On October 7, 2022, Defendant filed a supplemental request for judicial notice of several orders and rulings from the Los Angeles Superior Court, San Diego Superior Court, and federal district courts. The court grants the request. (Evid. Code., § 452, subd. (d) [providing that a court may take judicial notice of any court records of this state and the United States].)

LEGAL STANDARD

In a motion to compel arbitration, the moving party must prove by a preponderance of evidence that (1) the parties entered into an arbitration agreement and (2) their agreement covers their dispute. The burden then shifts to the resisting party to prove by a preponderance of evidence grounds to deny arbitration. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413-414; Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.) Generally, the court must grant the petition unless the court finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (Code Civ. Proc., § 1281.2; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.) 

“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) “This strong policy has resulted in the general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.” (Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (“FAA”), which governs all agreements to arbitrate in contracts “involving interstate commerce.” (9 U.S.C. § 2, et seq.; Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.) 

DISCUSSION

A.               The Parties Entered into an Arbitration Agreement

The court must first determine whether a valid arbitration agreement exists. (Trinity v. Life Ins. Co. of North America (2022) 78 Cal.App.5th 1111, 1122.) A party seeking arbitration meets its initial burden of showing an arbitration agreement exists by attaching to the petition a copy of the arbitration agreement signed by the other party. (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543-544.) Here, Defendant has met its initial burden. Defendant’s Senior People and Compliance Manager Rodney White attests by declaration that he is personally familiar with the Employee Dispute Resolution Program that Defendant implemented and communicated to its United States employees in 2020. (White Decl., ¶¶ 1, 5-15.) Plaintiff completed the program and clicked on a button agreeing to be bound by a Mutual Arbitration Agreement on September 16, 2020. (White Decl., ¶ 16.) A true and correct copy of the Mutual Arbitration Agreement is attached to White’s declaration as Exhibit 3 (the “Arbitration Agreement”). (White Decl., ¶ 18.) 

If the moving party meets its initial prima facie burden, the party opposing arbitration bears the burden of producing evidence to challenge the arbitration agreement’s existence. (Ibid.) Here, Plaintiff contends no arbitration agreement exists because she did not understand the Arbitration Agreement’s terms when she clicked an acknowledgment button warning her that she was agreeing to be bound by an arbitration agreement when she completed Defendant’s online Employment Dispute Program. (Declaration of Monica Rico (“Rico Decl.”), ¶¶ 5-7, 9.) Plaintiff’s contention is unavailing, however, because her decision to click the acknowledgement button outwardly manifested her assent to the Arbitration Agreement’s terms. (Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 862 (“Long”).) The lack of her “physical” signature on the agreement does not mean the agreement is invalid. (Cf. Long, supra, 245 Cal.App.4th at pp. 862-866 [a party can manifest assent on the internet merely by clicking an “I agree” box or using a website].) And although Plaintiff claims she did not receive a copy of the agreement, she does not dispute that the program gave her the option of downloading a copy. Based on the foregoing, the court finds Plaintiff has not met her burden of challenging the Arbitration Agreement’s existence.

B.             The Arbitration Agreement is Not Unconscionable

“[U]nder both federal and 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. (9 U.S.C. § 2; see also, Code Civ. Proc., § 1281.) Plaintiff contends the Arbitration Agreement is unenforceable because it is unconscionable. Unconscionability requires elements of both procedural and substantive unconscionability. (Torrecillas v. Fitness International, LLC (2020) 52 Cal.App.5th 485, 492.)  A sliding scale applies to each element. “[I]f there is little of one, there must be a lot of the other.” (Ibid.) Plaintiff has the burden of demonstrating unconscionability. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.)

Plaintiff has failed to meet her burden of proving unconscionability for two reasons. First, citing Carbajal v. CWPSC, Inc. (2016) 245 Cal. App. 4th 227 (“Carbajal”), Plaintiff contends an arbitration agreement without arbitration rules attached to the agreement is unenforceable. (Opposition, p. 6:14-17.) Plaintiff overstates Carbajal’s holding.Carbajal held only that the failure to attach arbitration rules supported finding procedural unconscionability, but did not render the entire agreement unconscionable. (Carbajal, supra, 245 Cal.App.4th at p.  247.) 

Second, Plaintiff fails to show substantive unconscionability. Substantive unconscionability an agreement with terms that are so overly harsh or one-sided as to “shock the conscience.” (Carmona v. Lincoln Millennium Car Wash, Inc.(2014) 226 Cal.App.4th 74, 85.) Plaintiff does not, however, offer any argument showing substantive unconscionability other than to argue Defendant did not provide arbitration rules. Plaintiff thus fails to show the Arbitration Agreement is unconscionable. 

C.            The Arbitration Agreement Covers Plaintiff’s Individual PAGA Claims

The parties do not dispute that if the Arbitration Agreement is enforceable, Plaintiff is required to arbitrate her “individual” Labor Code violation claims under the recent United States Supreme Court decision Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 (“Viking”). Here, the Arbitration Agreement provides: “By this Agreement, both Worley (“the Company”) and Employee agree to resolve any and all claims, disputes or controversies arising out of or relating to the application for employment, employment with the Company, and/or the termination of employment by arbitration before a single, neutral arbitrator with experience resolving employment disputes.” (White Decl., Ex. 3, p. 1, Step Three – Arbitration, Mutual Agreement to Arbitrate Claims section.) Because Plaintiff’s “individual” PAGA claims arise out of her employment with the Defendant, the Arbitration Agreement covers those claims. 

D.            Plaintiff’s Representative PAGA Claims Are Stayed

The parties dispute whether Viking requires the dismissal of Plaintiff’s “representative” PAGA claims once her individual claims are compelled to arbitration. Defendant argues Viking does; Plaintiff argues Viking does not. Both parties agree, however, that the California Supreme Court has granted review in Adolph v. Uber Technologies, Case No. S274671 (“Adolph”) on the proper disposition of PAGA representative claims when the individual claim goes to arbitration. Our Supreme Court framed the issue as follows: “Whether an aggrieved employee who has been compelled to arbitrate claims under the Private Attorneys General Act (PAGA) that are ‘premised on Labor Code violations actually sustained by’ the aggrieved employee…maintains statutory standing to pursue ‘PAGA claims arising out of events involving other employees’ in court or in any other forum the parties agree is arbitrable.” (See Viking, supra, 142 S.Ct. at p. 1925 (conc. opn. of Sotomayor, J.) [noting if Viking’s “understanding of state law is wrong, California courts, in an appropriate case, will have the last word.”].)  Plaintiff urges this court to stay her representative claim pending the California Supreme Court’s decision in Adolph. Defendant asks, on the other hand, for dismissal because one does not know how long our Supreme Court will take to decide Adolph. This court exercises its discretion to stay the PAGA claims pending our Supreme Court’s decision in Adolph. (Code of Civ. Proc. § 1281.4)

CONCLUSION

The court grants Defendant’s Worley Group Inc.’s request to compel arbitration of Plaintiff’s individual claim. The court denies Defendant’s request to dismiss Plaintiff’s representative claim, and instead stays the representative claim pending the California Supreme Court’s decision in Adolph v. Uber Technologies, Case No. S27467.

The court sets an arbitration completion status conference on April 28, 2023, at 8:30 a.m. in Dept. 3. The parties are ordered to file a joint report regarding the status of the arbitration by April 14, 2023.  

Defendant is ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED:  October 14, 2022

_____________________________

Colin Leis

Judge of the Superior Court