Judge Curtis A. Kin, Case 22STCV09901 2022-08-18 Tentative Ruling

Judge: Curtis A. Kin, Case: 22STCV09901, Date: 2022-08-18 Tentative Ruling

Case Number: 22STCV09901 Hearing Date: August 18, 2022 Dept: 72

MOTION TO COMPEL ARBITRATION

Date: 8/18/22 (8:30 AM)

Case: Diane Canales v. Penney OpCo LLC et al. (22STCV09901)

TENTATIVE RULING:

Defendant Penney OpCo’s Motion to Compel Arbitration is GRANTED.

In this motion, defendant Penney OpCo seeks to compel arbitration of plaintiff Diane Canales’ claims against it.

The Court finds that plaintiff agreed to arbitration of the causes of action asserted in this action by electronically signing a Binding Arbitration and Class Action, Collective Action, and Representative Claim Waiver Agreement (“Agreement”). (Blume Decl. ¶¶ 13, 14 & Exs. 1, 2.)

Plaintiff argues that the Agreement must be rescinded because she signed it under economic duress. “The doctrine of ‘economic duress’ can apply when one party has done a wrongful act which is sufficiently coercive to cause a reasonably prudent person, faced with no reasonable alternative, to agree to an unfavorable contract. [Citation.] The party subjected to the coercive act, and having no reasonable alternative, can then plead ‘economic duress’ to avoid the contract.” (CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 644.)

Plaintiff makes no showing of any wrongful act by Penney OpCo. Plaintiff maintains that she was told she could not continue working for defendant unless she signed the Agreement and that she was rushed while signing the Agreement. (Canales Decl. ¶¶ 4, 5.) However, a “predispute arbitration agreement is not invalid merely because it is imposed as a condition of employment.” (Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105, 1122.) Moreover, by signing the Agreement, plaintiff is bound by the terms of the agreement. (Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 163, quoting 1 Witkin, Summary of Cal. Law (9th ed. 1987), § 120 at 145 [“Ordinarily, one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it. If he cannot read, he should have it read or explained to him”].)

The Agreement also provides plaintiff a way to opt out of the Agreement within 21 days of signing the Agreement, which plaintiff did not do. (Blume Decl. ¶¶ 12, 13 & Ex. 1 at ¶ 6.) While plaintiff claims she was rushed into signing the Agreement, plaintiff does not declare that she ever asked for a copy of the Agreement, wherein she could have reviewed the opt-out procedures.

Plaintiff invokes Labor Code § 432.6, which states that a person cannot require an employee to waive the right to file and pursue a civil action for violation of the Fair Employment and Housing Act. However, this statute is unavailing to plaintiff because the statute “does not make invalid or unenforceable any agreement to arbitrate, even if such agreement is consummated in violation of the statute.” (Chamber of Commerce of United States v. Bonta (9th Cir. 2021) 13 F.4th 766, 776.) Moreover, even if the Agreement were a condition of employment, nothing in Labor Code § 432.6 “is intended to invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act (9 U.S.C. Sec. 1 et seq.).” (Lab. Code § 432.6(f).) With respect to 9 U.S.C. § 2, the term “evidencing a transaction involving commerce” does not mean that the parties must have contemplated substantial interstate activity at the time they entered into the agreement; rather, the transaction must merely turn out, in fact, to have involved interstate commerce. (Shepard v. Edward Mackay Enterprises, Inc. (2007) 148 Cal.App.4th 1092, 1097; see also Allied Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 281-82.) Human Resources Operations Manager Barbara A. Blume avers that Penney OpCo transacts business throughout the United States, including selling clothing and accessories across state lines. (Blume Decl. ¶ 15.) Based on this averment, Penney OpCo demonstrates that plaintiff’s employment involved interstate commerce. This is all that is required under the Federal Arbitration Act. Accordingly, under Labor Code § 432.6(f), the Agreement is enforceable.

Plaintiff argues that the agreement to arbitrate is unenforceable because it is unconscionable. (See Civ. Code § 1670.5(a).) An arbitration agreement must be both procedurally and substantively unconscionable to be unenforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114; Mission Viejo Emergency Med. Assocs. v. Beta Healthcare Group (2011) 197 Cal.App.4th 1146, 1159 [unnecessary to decide whether insurance policy was adhesion contract and procedurally unconscionable because it was not substantively unconscionable].)

With respect to procedural unconscionability, even if the Agreement were adhesive, this alone does not render the agreement unenforceable. (Serpa v. California Sur. Investigations, Inc. (2013) 215 Cal.App.4th 695, 704; Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 817-18.)

With respect to substantive unconscionability, plaintiff contends that the Agreement forces plaintiff to bring her claims “within the same time limits that would apply if that claim were brought in federal court in the district where the arbitration is brought.” (Blume Decl. ¶ 13 & Ex. 1 at ¶ 2.) However, the Agreement provides that the arbitrator “shall apply valid, current state, federal or local substantive law as applicable.” (Blume Decl. ¶ 13 & Ex. 1 at ¶¶ 2(F).) A federal court adjudicating a state cause of action would apply the state statute of limitations. (Albano v. Shea Homes Ltd. Partnership (9th Cir. 2011) 634 F.3d 524, 530 [“A federal court sitting in diversity applies the substantive law of the state, including the state's statute of limitations”].)

Plaintiff also argues that the Agreement requires approval of the arbitrator before noticing more than three depositions. (Blume Decl. ¶ 13 & Ex. 1 at ¶¶ 2(F).) This does not mean that plaintiff cannot conduct more than three depositions, only that plaintiff must secure the approval of the arbitrator before doing so. To the extent that the arbitrator may allow less discovery than plaintiff would have in a court action, parties agreeing to arbitration are allowed “to agree to something less than the full panoply of discovery provided in section 1283.05.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 105-06.) “Adequate discovery does not mean unfettered discovery.” (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 715.)

For the foregoing reasons, the motion to compel arbitration of plaintiff’s claims against defendant Penney OpCo is GRANTED. Pursuant to CCP § 1281.4 and 9 U.S.C. § 3, this action is STAYED pending completion of arbitration between the parties.