Judge: Cynthia A Freeland, Case: 37-2023-00003290-CU-WT-NC, Date: 2023-09-29 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - September 28, 2023

09/29/2023  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Wrongful Termination Motion Hearing (Civil) 37-2023-00003290-CU-WT-NC MERINO VS. GARFIELD BEACH CVS, L.L.C., A CALIFORNIA LIMITED LIABILITY COMPANY CAUSAL DOCUMENT/DATE FILED: Motion to Compel Discovery, 05/16/2023

Defendant Garfield Beach CVS, LLC ('Defendant')'s motion to compel arbitration and dismiss action is granted.

Plaintiff Christopher Matthew Merino ('Plaintiff') was employed as a Pharmacy Technician as Defendant's Vista, CA location from March 13, 2019 to June 1, 2021. See Baugh Decl., ¶ 2; Merino Decl., ¶ 2. Before beginning his employment, Plaintiff was required to complete various new hire paperwork on Defendant's STARSource Onboarding system. See Burke Decl., ¶ 2; Merino Decl., ¶ 3.

On March 7, 2019, as part of the onboarding process, Plaintiff electronically signed a CVS Health Arbitration Agreement (the 'Agreement'). See Baugh Decl., Ex. 2. In pertinent part, the Agreement provides that: 1. Mutual Agreement to Arbitrate Claims. The employee named below will be referred to here as 'Employee,' 'You' or 'Your'. CVS Pharmacy, Inc., including its affiliates, successors, subsidiaries and/or parent companies will be referred to here as 'CVS' or 'Company'. Under this Agreement, You and CVS agree that any dispute between You and CVS that is covered by this Agreement ('Covered Claims') will be decided by a single arbitrator through final and binding arbitration only and will not be decided by a court or jury or any other forum, except as otherwise provided in this Agreement.

2. Claims Covered by this Agreement. Except as otherwise stated in this Agreement, Covered Claims are any and all claims, disputes or controversies that CVS may have, now or in the future, against You or that You may have, now or in the future, against CVS or one of its employees or agents, arising out of or related to Your employment with CVS or the termination of Your employment. Covered Claims include but are not limited to disputes regarding wages and other forms of compensation, hours of work, meal and rest break periods, seating, expense reimbursement, leaves of absence, harassment, discrimination, retaliation and termination arising under the Civil Rights Act of 1964, Americans with Disabilities Act, Age Discrimination in Employment Act, Family Medical Leave Act, Fair Labor Standards Act, Employee Retirement Income Security Act ('ERISA'), Genetic Information Non-Discrimination Act, and other federal, state and local statutes, regulations and other legal authorities relating to employment.

Covered Claims also include disputes arising out of or relating to the validity, enforceability or breach of this Agreement, except as provided in paragraph 6, below, regarding the Class Action Waiver.

See Agreement, §§ 1, 2. The Agreement is governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) (the 'FAA')'s substantive and procedural rules. Ibid., § 7(d).

In relevant part, the FAA provides that: Calendar No.: Event ID:  TENTATIVE RULINGS

2974862 CASE NUMBER: CASE TITLE:  MERINO VS. GARFIELD BEACH CVS, L.L.C., A CALIFORNIA LIMITED  37-2023-00003290-CU-WT-NC A written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be 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. The court applies state contract law in determining Defendant's right to enforce the Agreement. See Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal. 4th 223, 236 ('In determining the rights of parties to enforce an arbitration agreement within the FAA's scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration.'); Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal. App. 4th 1276, 1285 (generally applicable contract defenses may invalidate arbitration agreements provided they do not contravene § 2 of the FAA). A threshold determination in that regard is the existence of an arbitration agreement. See Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal. App. 4th 165, 172. Defendant bears the burden of proving the existence of an arbitration agreement by a preponderance of the evidence. Plaintiff then bears the burden of proving by a preponderance of the evidence any facts necessary to his defense.

See Lane v. Francis Capital Management LLC (2014) 224 Cal. App. 4th 676, 683.

The court finds that Defendant has satisfied its initial burden of proving the existence of an arbitration agreement. Defendant has provided a copy of the Agreement that Plaintiff electronically signed. Nothing further is required to prove the Agreement's existence. See Condee v. Longwood Management Corp.

(2001) 88 Cal. App. 4th 215, 218-219 ('For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication . . . the court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity.'); Cal. R. Ct.

3.1330. Plaintiff's contention that he does not recall signing the Agreement does not undermine the court's conclusion. Where a party opposing arbitration indicates that he or she cannot recall signing an arbitration agreement (see Merino Decl., ¶ 4), the moving party has the burden of proving by a preponderance of the evidence that the electronic signature is authentic. See Espejo v. Southern California Permanente Medical Group (2016) 246 Cal. App. 4th 1047, 1059. Toward that end, the Fourth District Court of Appeal has stated: Under Civil Code section 1633.7, enacted in 1999 as part of the Uniform Electronic Transactions Act (Civ. Code, § 1633.1 et seq.; Stats. 1999, ch. 428, § 1, pp. 2809-2816), an electronic signature has the same legal effect as a handwritten signature (Civ. Code § 1633.7, subd. (a) ['A ... signature may not be denied legal effect or enforceability solely because it is in electronic form.']). Still, any writing must be authenticated before the writing, or secondary evidence of its content, may be received in evidence (Evid. Code, § 1401; People v. Valdez (2011) 201 Cal.App.4th 1429, 1435, [135 Cal.Rptr.3d 628]; People v. Goldsmith (2014) 59 Cal.4th 258, 271, [172 Cal.Rptr.3d 637, 326 P.3d 239].) 'Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law.' (Evid. Code, § 1400, italics added; People v. Valdez, supra, at p. 1435, 135 Cal.Rptr.3d 628 [proponent meets its burden of producing evidence to show authenticity of writing ' 'when sufficient evidence has been produced to sustain a finding that the document is what it purports to be.' ']' People v. Skiles (2011) 51 Cal.4th 1178, 1187, [126 Cal.Rptr.3d 456, 253 P.3d 546] ['[w]riting an be authenticated by circumstantial evidence and by its contents.'].) Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal. App. 4th 836, 843. California Civil Code § 1633.9(a) provides that '[a]n electronic record or signature is attributable to a person if it was the act of the person.

The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.' Cal. Civ. Code § 1633.9(a).

The court finds that Defendant has met its burden of demonstrating by a preponderance of the evidence the authenticity of Plaintiff's electronic signature on the Agreement. Defendant has submitted a Calendar No.: Event ID:  TENTATIVE RULINGS

2974862 CASE NUMBER: CASE TITLE:  MERINO VS. GARFIELD BEACH CVS, L.L.C., A CALIFORNIA LIMITED  37-2023-00003290-CU-WT-NC declaration by its Senior Manager, HR Technology, in the HR Shared Services Department, Maria Burke, who avers that she, in her role at Defendant, among other things, is familiar with and has access to records in the STARSource Onboarding system. See Burke Decl., ¶¶ 1-2. The STARSource Onboarding system is used by new hires and rehires to review and complete pre-hire forms before starting employment with Defendant. Ibid., ¶ 2. In order to review and sign Defendant's pre-hire forms, new hires and rehires log into the STARSource Onboarding portal using unique credentials and personalized passwords. Ibid., ¶ 3. Using that information, new hires and rehires access the system where a landing page lists each of the pre-hire forms to be reviewed and completed under a header entitled 'My Tasks.' Ibid., ¶ 4. On the 'My Tasks' page, employees have the option to create and store a 'Digital Signature.' When an employee clicks on the box reading 'Click here to add your digital signature,' he or she will see a 'Personal Information' page. This page includes a section for 'Electronic Signature,' where an employee can click 'edit' to create the electronic signature. Ibid., ¶ 5. To store a 'Digital Signature,' employees can either upload a signature image/document or draw a signature with a computer mouse. Ibid., ¶ 6. Employee arbitration agreements are stored on the 'My Tasks' page. The page has a column showing the 'status' of the arbitration agreement – either 'pending' or 'completed.' Ibid., ¶ 8. The arbitration agreement is marked as 'completed' once the employee reviews and signs the document. Ibid., ¶ 9. The employee completes the arbitration agreement by electronically signing it using a signature image/document upload or by drawing his or her signature via a computer mouse. Ibid., ¶ 10. Based on the foregoing process, Ms. Burke states that Plaintiff electronically signed/completed the Agreement, along with the other new hire paperwork, on March 7, 2019 at 12:11 a.m. Ibid., ¶ 14. The foregoing constitutes sufficient evidence that Plaintiff's electronic signature is attributable to him.

Accordingly, the court finds that Defendant has properly authenticated Plaintiff's electronic signature and consequently has met its burden of proving the existence of an arbitration agreement between the parties.

The burden thus shifts to Plaintiff to prove by a preponderance of the evidence any facts necessary to preclude enforcement of the Agreement. Notably, the Agreement contains a delegation clause at § 2 which Defendant appears to attack on three separate grounds: (1) the delegation clause does not exist; (2) the delegation clause's language is not clear and unmistakable; and (3) the delegation clause is unconscionable. These arguments are not persuasive.

Parties can agree to arbitrate 'gateway' questions or 'arbitrability' such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy. See Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 68-69; Mendoza v. Trans Valley Transport (2022) 75 Cal. App. 5th 748, 772. When the parties 'clearly and unmistakably' demonstrate their intent to have an arbitrator decide arbitrability, the issues must be submitted to the arbitrator unless the agreement to delegate arbitrability is itself unconscionable. See Rent-A-Center, West, Inc., 561 U.S. at 70; Trinity v. Life Ins. Co. of North America (2022) 78 Cal. App. 5th 1111, 1122; Brennan v. Opus Bank, 796 F.3d 1125, 1132 (9th Cir. 2015). In this case, § 2 of the Agreement provides in relevant part that ''Covered Claims' include 'disputes arising out of or relating to the validity, enforceability or breach of this Agreement[.]'' See Agreement, § 2. This language has been held sufficient to delegate the issue of arbitrability to an arbitrator. See, e.g., Aanderud v. Sup. Ct. (2017) 13 Cal. App. 5th 880, 892. In sum, Defendant's contention that § 2 of the Agreement either does not exist or is not clear is unavailing.

Defendant next argues, seemingly as part of an unconscionability analysis, that the delegation clause is oppressive, surprising, overly harsh, and one-sided because the AAA rules, which are incorporated by reference into the Agreement, contain a delegation provision. The court respectfully disagrees. Section 4(c) of the Agreement provides as follows: c. Rules and Procedures. The arbitration will be administered by the American Arbitration Association ('AAA') and will be conducted in accordance with the Employment Arbitration Rules and Mediation Procedures of the AAA ('AAA Rules') then in effect. The AAA Rules can be found at the AAA website (www.adr.org), by calling the AAA at 800-778-7879, or by requesting a copy from the CVS Human Resources Department. Pursuant to the AAA Rules, the parties will select the arbitrator by mutual agreement and will have the opportunity to conduct discovery, bring dispositive motions, be represented Calendar No.: Event ID:  TENTATIVE RULINGS

2974862 CASE NUMBER: CASE TITLE:  MERINO VS. GARFIELD BEACH CVS, L.L.C., A CALIFORNIA LIMITED  37-2023-00003290-CU-WT-NC by attorney(s) (or not, as they prefer) and present witnesses and evidence at a hearing. Unless You and CVS agree otherwise, the location of the arbitration hearing will be no more than 45 miles from the place where You are or were last employed by CVS. The Federal Rules of Evidence will apply. The arbitrator will follow the substantive law applicable to the case and may award only those remedies that would have been available had the matter been heard in court. Judgment may be entered on the arbitrator's decision and enforced in any court having jurisdiction.

See Agreement, § 4(c).

Defendant's only discernible argument regarding the enforceability of the delegation clause is that it is procedurally unconscionable because he was not provided with a copy of the AAA rules as part of the Agreement. The court respectfully disagrees. A failure to attach an arbitration organization's rules, standing alone, is not a sufficient basis to support a finding of unconscionability. See Lane, 224 Cal. App. 4th at 690; Peng v. First Republic Bank (2013) 219 Cal. App. 4th 1462, 1472. Regardless, this alleged failure would not affect the court's unconscionability analysis where, as here, Plaintiff has not challenged AAA's rules in the first place. See Baltazar v. Forever 21, Inc. (2016) 62 Cal. 4th 1237, 1246.

Based on the foregoing, the court finds that the delegation clause is valid and will be enforced. This, then, requires any challenges to the validity of the Agreement as a whole, including its enforceability, to be decided by the arbitrator. As a result, the court grants Defendant's motion to compel arbitration and leaves to the arbitrator to decide the remaining issues set forth in Plaintiff's opposition.

Regarding Defendant's request to dismiss this action, the court concludes that the preferred course is to stay the case. Given that the arbitrator has been vested with the authority to determine arbitrability, a stay of this litigation will provide the most efficient method to address the issues in this court should the arbitrator conclude that the Agreement is unenforceable and/or the issues are not arbitrable.

Additionally, a stay will enable the court to confirm efficiently any future arbitration award should the arbitrator conclude that the Agreement is enforceable and the issues are arbitrable.

In light of the foregoing, the court grants Defendant's motion to compel arbitration. This litigation is stayed pending the outcome of the arbitration hearing or unless/until the arbitrator finds that the Agreement is not enforceable. See 9 U.S.C. § 3. The court vacates the currently set Case Management Conference and sets a status conference in this matter for February 16, 2024 at 9:30 a.m. in this department.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, September 29, 2023. If no party appears at the hearing, this tentative ruling will become the order of the court as of September 29, 2023.

If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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