Judge: Colin Leis, Case: 23STCV31804, Date: 2025-02-10 Tentative Ruling
Case Number: 23STCV31804 Hearing Date: February 10, 2025 Dept: 74
Miceli v.
Dollar Tree Stores, Inc
Defendants’ Motion to Compel
Arbitration
BACKGROUND
This
motion arises from an employment dispute.
Plaintiff
Corey Miceli (Plaintiff) filed a Private Attorney General Act complaint against
his employer Dollar Tree Stores, Inc. (Defendant).
Defendant
moves to compel arbitration.
JUDICIAL NOTICE
Denied.
LEGAL STANDARD
Under
both the Federal Arbitration Act and California law, arbitration agreements are
valid, irrevocable, and enforceable, except on such grounds that exist at law
or equity for voiding a contract. (Winter
v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) The party moving to compel arbitration must
establish the existence of a written arbitration agreement between the parties.
(Code of Civ. Proc. § 1281.2.) This is usually done by presenting a copy of
the signed, written agreement to the court. “A petition to compel arbitration or to stay
proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must
state, in addition to other required allegations, the provisions of the written
agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim, or a
copy must be physically or electronically attached to the petition and
incorporated by reference. (Cal. Rules
of Court, rule 3.1330.) The moving party
must also establish the other party’s refusal to arbitrate the controversy. (Code of Civ. Proc. § 1281.2.) The filing of a lawsuit against the moving
party for a controversy clearly within the scope of the arbitration agreement
affirmatively establishes the other party’s refusal to arbitrate the
controversy. (Hyundai Amco America,
Inc. v. S3H, Inc. (2014) 232 Cal.App.4th 572, 577.)
The
Court shall order arbitration unless it determines that grounds exist for the
revocation of the agreement. (Code Civ.
Proc. § 1281.2.) Under California law,
and the Federal Arbitration Act, an arbitration agreement may be invalid based
upon grounds applicable to any contract, including unconscionability, fraud,
duress, and public policy, which would be matters for the court to decide. (Sanchez v. Western Pizza Enterprises, Inc.
(2009) 172 Cal.App.4th 154, 165-166.)
DISCUSSION
Defendant
moves to compel Plaintiff to arbitration based on the Arbitration Agreement
Plaintiff electronically signed on May 31, 2021. The Arbitration Agreement states in pertinent
part:
Agreement to Arbitrate: Except as otherwise provided in this Agreement, the Parties
agree to resolve by arbitration all claims or controversies arising out of or
related to Associate’s application for employment, offer or denial or
employment, prospective employment, employment or its termination.
(Votta Decl., Ex. E.) Respondents’ name and purported e-signature
are visible on the last page. (Votta
Decl., Ex. E.) This evidence shows that
Plaintiff agreed to submit for arbitration all claims within the terms of the
arbitration provision. Plaintiff does
not challenge the validity of the contract.
Rather, Plaintiff alleges that (1) Plaintiff’s PAGA causes of action are
exempt and (2) the Arbitration Agreement is unconscionable.
PAGA Actions
Plaintiff
filed a complaint under the Private Attorneys General Act (PAGA). Under the FAA, PAGA claims can be separated
into individual and representative claims.
(Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906,
1913.) The Arbitration Agreement states
that “to the maximum extent permitted by law, the Federal Arbitration Act…
shall govern the interpretation and enforcement of this Agreement and shall govern
all proceedings relating to this Agreement.”
(Votta Decl., Ex. E.) Plaintiff’s
individual PAGA claim can be compelled to arbitration. (Leeper v. Shipt,
Inc. (2024) 107 Cal.App.5th 1001.)
Unconscionability
For
an arbitration agreement to be unenforceable as unconscionable, there must be
both procedural and substantive unconscionability. (Armendariz v. Foundation Health Psychcare
Services, Inc. (Armendariz) (2000) 24 Cal.4th 83, 114.)
Procedural
Unconscionability
Procedural
unconscionability includes oppression arising from unequal bargaining power
causing an absence of meaningful choice and real negotiating, and surprise due
to hidden terms drafted by the party seeking to enforce the provisions. (Gatton
v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 581.)
Plaintiff
alleges that the agreement was procedurally unconscionable because it was
offered on a take-it-or-leave-it basis with no meaningful ability to bargain or
choice to sign. Defendant had Plaintiff
fill out the onboarding paperwork online.
(Votta Decl., ¶ 10.) Before being
able to check a box acknowledging that he received and read the arbitration
agreement, Plaintiff was presented the Arbitration Agreement in either English
or Spanish. (Votta Decl., ¶¶ 11,
12.) The Arbitration Agreement is a
mandatory condition of employment. An
agreement is not automatically unenforceable just because it is a required
condition of employment, but it does indicate a degree of procedural
unconscionability. (Farrar v. Direct
Commerce, Inc. (2017) 9 Cal.App.5th 1257, 1267-68.)
Failure
to adequately identify the governing rules of arbitration can increase the
level of surprise and oppression. (Carlson
v. Home Team Pest Defense, Inc. (2015) 239 Cal.App.4th 619, 632-33.) Defendant does not provide rules of a
specific arbitration forum but includes specific arbitration rules and
provisions regarding the arbitration process.
(Votta Decl., Ex. E.) Given that
Defendant does not require a particular arbitration forum, it is not
procedurally unconscionable not to provide the rules of an arbitration
forum.
Nevertheless,
the Court finds a degree of procedural unconscionability in the process and
take-it-or-leave-it nature of arbitration agreement.
The
Court moves to consider substantive unconscionability.
Substantive unconscionability
focuses on the terms of the agreement and whether those terms are “so one sided
as to ‘shock the conscience.’” (Kinney
v. United Healthcare Services, Inc., supra, 70 Cal. App.4th 1330.)
Plaintiff alleges that the agreement
shows a high level of substantive unconscionability because the Agreement (1)
requires Plaintiff to arbitrate all claims against Defendant and a number of
other entities but does not require those entities to arbitrate all claims
against Plaintiff, (2) survives Plaintiff’s employment, and (3) requires
Plaintiff to arbitrate broad claims unrelated to employment.
Plaintiff relies on Cook v. Univ.
of Southern Cal. to support his argument that the arbitration provisions
are procedurally unconscionable on scope, duration, and inclusion of other
entitles. (102 Cal.App.5th 312.) The
Arbitration agreement in Cook requires Plaintiff to arbitrate any claim,
whether or not related to employment against the university or any of its
related entities, in perpetuity. (Id.
at 321-36.) Here, the Agreement requires
that Plaintiff arbitrate any claims related to his employment (with some
exclusions) against the Defendant, Defendant’s officers, directors, employees,
or agents and the Company’s benefit plans and the plans’ sponsors, fiduciaries,
administrators, affiliates, and agents in perpetuity. (Votta Decl., Ex. E.) The terms of Defendant’s arbitration
agreement are tailored to requiring arbitration between Plaintiff and Defendant
for employment related disputes, allowing for third party beneficiaries to
enforce the agreement. The Court finds
that these terms are not substantively unconscionable.
Stay
The
trial court may exercise its discretion to stay the non-individual claims
pending arbitration. (Adolph v. Uber
Techs., Inc. (2023) 14 Cal.5th
1104, 1123–1126.) Plaintiff does not
oppose staying the individual PAGA claims pending the resolution of
arbitration. Therefore, the Court stays
the individual claims pending the resolution of arbitration. (See Code Civ. Proc., § 1281.4.)
CONCLUSION
The
Court grants Defendant’s Motion to Compel Arbitration and Stay.
Defendant
to give notice.