Judge Daniel M. Crowley, Case Number: 24STCV18263, Date: 2025-01-14 Tentative Ruling

Defendant LAX Auto Center LLC dba LAX Automotive’s motion to compel arbitration of Plaintiff Adrien Saidi’s individual PAGA claim in this action is granted. The Court sets a Status Conference regarding the arbitration on January 13, 2026, at 8:30 a.m. in Department 71. The parties are ordered to submit a Joint Status Conference Report advising the Court of the status of the matter by January 6, 2026. Plaintiff’s representative claim is stayed pending the arbitration.

Defendant LAX Auto Center LLC dba LAX Automotive (“LAX Automotive”) (“Defendant”) moves for an order compelling arbitration of all claims asserted by Plaintiff Adrien Saidi (“Saidi”)^[1] (“Plaintiff”) and staying the instant action during the pendency of arbitration. (Notice of Motion, pgs. 1-2; 9 U.S.C. §1 et seq.; C.C.P. §§1280 et seq., 1281.4)

On July 25, 2024, Plaintiff filed the instant action for penalties pursuant to Labor Code §§2699, et seq. for violations of Labor Code §§201, 202, 203, 226, 2802, 1198.5, and 432. (See Complaint.)

Defendant filed the instant motion on September 3, 2024. Plaintiff filed his opposition on December 30, 2024. On January 7, 2024, Defendant filed its reply.

Federal law provides for enforcement of arbitration agreements. The Federal Arbitration Act, 9 U.S.C. §1, et seq. (“FAA”), establishes a strong federal policy in favor of arbitration of disputes where a written arbitration agreement exists. Section 2 of the FAA provides, in pertinent part that “[a] written provision . . . to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable.” (9 U.S.C. §2.) The purpose of the FAA is to “reverse the longstanding judicial hostility to arbitration agreements.” (Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, 24.) The FAA places arbitration agreements “on an equal footing with other contracts and [requires courts] to enforce them according to their terms.” (AT&T Mobility, LLC v. Concepcion (2011) 563 U.S. 333, 339; see also Rent-A-Center West, Inc. v. Jackson (2010) 561 U.S. 63, 67 [“The FAA reflects the fundamental principle that arbitration is a matter of contract.”].) The FAA will preempt not only a state law that “discriminat[es] on its face against arbitration,” but also a state law that “covertly accomplishes the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.” (Kindred Nursing Centers Limited Partnership v. Clark (2017) 137 S.Ct. 1421, 1426.)

The United States Supreme Court has specifically held that the FAA applies to employment contracts: “[A]s a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms.” (Epic Systems Corp. v. Lewis (2018) 138 S.Ct. 1612, 1619 [holding that employees must submit to arbitration agreements including those with collective action waivers].)

The FAA restricts a court’s inquiry related to compelling arbitration to two threshold questions: (1) whether there was an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute. (Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 84.)

California law also favors arbitration for dispute resolution. The California Arbitration Act (“CAA”), codified at C.C.P. §1281 et seq., provides, “A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (C.C.P. §1281; see also Grafton Partners L.P. v. Superior Court (2005) 36 Cal.4th 944, 955 [“[U]nlike predispute jury waivers, predispute arbitration agreements are specifically authorized by statute.”].)

“California law, like federal law, favors enforcement of valid arbitration agreements.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97, 99.) The public policy in favor of arbitration is so strong that California courts have held that an employee is “bound by the provisions of the [arbitration] agreement regardless of whether [he] read it or [was] aware of the arbitration clause when [he] signed the document.” (Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, citing Macaulay v. Norlander (1992) 12 Cal.App.4th 1.) The only prerequisite for a court to order arbitration is a determination that the parties have entered into an agreement to arbitrate the dispute. (United Transportation Union v. Southern California Rapid Transit District (1992) 7 Cal.App.4th 804, 808.) Thus, arbitration must be ordered “unless the agreement clearly does not apply to the dispute in question.” (Vianna v. Doctors’ Management Co. (1994) 27 Cal.App.4th 1186, 1189.)

Defendant makes the barest of showings that Plaintiff agreed to arbitrate disputes arising out of Plaintiff's employment with Defendant. Plaintiff does not challenge Plaintiff’s showing. (Compare, Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1067.) Accordingly, the Court finds that Plaintiff agreed to the terms of employment argued by Defendant, including an agreement to arbitrate the instant dispute.

“[P]rocedural and substantive unconscionability must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.” (Armendariz, 24 Cal.4th at pg. 102.) Courts invoke a sliding scale which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves, i.e., the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to conclude that the term is unenforceable, and vice versa. (Id., at pg. 114.) Plaintiff bears the burden of proving that the provision at issue is both procedurally and substantively unconscionable.

Plaintiff argues the Arbitration Agreement is procedurally unconscionable because the Arbitration Agreement is a contract of adhesion. (Opposition, pgs. 7-8.)

“Procedural unconscionability focuses on the elements of oppression and surprise. [Citations] ‘Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice . . . Surprise involves the extent to which the terms of the bargain are hidden in a ‘prolix printed form’ drafted by a party in a superior bargaining position.’ [Citations.]” (Roman v. Superior Court (2009) 172 Cal.App.4th 1462, 1469.)

Procedural unconscionability “focuses on the unequal bargaining positions and hidden terms common in the context of adhesion contracts.” (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1212-1213.) Although standard employment agreements offered on a “take it or leave it” basis are generally considered contracts of adhesion, this alone is not enough to equate to unconscionability. (See Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 817-819 [“To describe a contract as adhesive in character is not to indicate its legal effect. It is, rather, ‘the beginning and not the end of the analysis insofar as enforceability of its terms are concerned.’”].) Adhesion contracts are “fully enforceable . . . unless certain other factors are present which under established legal rules—legislative or judicial—operate to render it otherwise.” (Id. at pgs. 819-820; Harper v. Ultimo (2003) 113 Cal.App.4th 1402, 1409 [adhesion alone does not render arbitration agreements unconscionable]; see also Armendariz, 24 Cal.4th at 114; Lagatree v. Luce, Forward, Hamilton & Scripps, LLP (1999) 74 Cal.App.4th 1105 [discussing many authorities upholding arbitration agreements contained in adhesion contracts].)

Plaintiff’s argument in opposition that his requirement to sign the Arbitration Agreement as a condition of his employment is unavailing and is unsupported by case law. The adhesive nature of arbitration agreements in the employment context alone does not render an agreement unenforceable. (Lagatree, 74 Cal.App.4th at pg. 1127 [“[C]ases uniformly agree that a compulsory predispute arbitration agreement is not rendered unenforceable just because it is required as a condition of employment or offered on a ‘take it or leave it’ basis.”]; Armendariz, 24 Cal. 4th at pg. 113 [holding that the requirement that the employee sign an arbitration agreement may contain some elements of procedural unconscionability, but that, in itself, does not invalidate the arbitration agreement]; Ajamian v. CantorCO2e, LP (2012) 203 Cal.App.4th 771, 796 [“Where there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low[.]”].)

Here, the Application Statement and Agreement includes in all caps at the top of the first page, “CONTAINS A BINDING ARBITRATION AGREEMENT.” (Decl. of Makerian ¶10, Exh. A.) The agreement further provides:

I UNDERSTAND THAT I AM GIVING UP THE RIGHT TO TRIAL BY JURY . . . MY SIGNATURE BELOW ATTESTS TO THE FACT THAT I HAVE BEEN GIVEN AN OPPORTUNITY TO READ AND CONSIDER THIS AGREEMENT . . . DO NOT SIGN UNTIL YOU HAVE READ THE ABOVE ACKNOWLEDGMENT AND AGREEMENT.”

Plaintiff has failed to demonstrate any procedural unconscionability. (Hicks v. Superior Court (2004) 115 Cal.App.4th 77, 91.) Further, Plaintiff does not submit a declaration in support of his opposition with sufficient evidence to contradict that Defendant provided him with sufficient opportunities to review and ask questions about the documents he signed.

Based on the foregoing, the Court finds the Arbitration Agreement is, at most, minimally procedurally unconscionable. However, as discussed below, the Court finds the arbitration agreement is not substantively unconscionable.

Plaintiff argues the Arbitration Agreement is substantively unconscionable because (1) it is an infinite agreement; (2) the Arbitration Agreement lacks mutuality; (3) improperly stays non-arbitrable claims; and (4) permits Defendant to delay payment of arbitration fees until 60 days prior to the commencement of the arbitration hearing, in violation of CCP §1281.98(a)(1). (Opposition, pgs. 7-13.)

“Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create ‘overly harsh’ or ‘‘one-sided’ results’ [Citations] that is, whether contractual provisions reallocate risks in an objectively unreasonable or unexpected manner. [Citation] Substantive unconscionability ‘may take various forms,’ but typically is found in the employment context when the arbitration agreement is ‘one-sided’ in favor of the employer without sufficient justification, for example, when ‘the employee’s claims against the employer, but not the employer’s claims against the employee, are subject to arbitration.’ [Citations].” (Roman, 172 Cal.App.4th at pgs. 1469-1470.) In determining whether an arbitration agreement is unconscionable, the Court considers whether the agreement: (1) provides for a neutral arbitrator; (2) provides for reasonable discovery; (3) requires a written award; (4) provides for the same remedies that otherwise would be available in court; and (5) does not require employees to bear costs unique to arbitration. (See Armendariz, 24 Cal.4th at pgs. 102-103.)

First, Plaintiff contends that the Agreement is an infinite agreement. Plaintiff is mistaken. The comprehensive reach of the arbitration agreement makes it more fair, not less because arbitration agreements that are broadly drafted apply to all “claims an employer might bring as well as those an employee might bring.”. (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1249.) Here, the arbitration agreement is written to ensure both parties can bring claims pursuant to the arbitration agreement. Further, unlike the arbitration agreement in Cook v. University of Southern California (2024) 102 Cal.App.5th 312, the present Arbitration Agreement can be interpreted to terminate after a reasonable duration, since no procedure for revocation is provided. Additionally, Plaintiff could have inferred that the arbitration agreement would apply to future claims because the agreement was a pre-dispute arbitration agreement, and therefore would reasonably be interpreted to apply to future claims, since no claims had occurred between Plaintiff and Defendant prior to Plaintiff’s signing of the Arbitration Agreement.

Second, Plaintiff’s argument that the Agreement lacks mutuality is unavailing. Section 4 of the agreement makes clear that LAX Automotives’ third-party beneficiaries include “owners, directors, officers, managers, employees, agents, partners, attorneys, sister-companies, subsidiaries, parent companies, joint-venturers, affiliated persons/entities, independent contractors, and parties affiliated with its employee benefit and health plans.” (Decl. of Makerian, Exh. A at §4.) The entities identified by Plaintiff are inapplicable to Plaintiff because he does not identify which of his third-party beneficiaries to this Arbitration Agreement—assuming he has any—Defendant would ever have a claim against. Nonetheless, an arbitration agreement lacks mutuality only where the employer asks the employee to arbitrate his claims “without accepting that forum for itself.” (Armendariz, 24 Cal.4th at pg. 118.) Here, both Defendant and Plaintiff agreed to arbitrate their claims. Therefore, Plaintiff’s argument on this basis is unavailing.

Third, Plaintiff’s argument that the agreement is unconscionable because it is in violation of the EFAA is inapplicable and a complete non-sequitur; Plaintiff does not state any claims relating to sexual harassment or sexual assault.

Finally, Plaintiff’s argument that the improper arbitration fee provision renders the agreement substantively unconscionable is unavailing. The agreement expressly requires Defendant to “pay all costs and arbitration fees unique to the arbitration as required by controlling case law.” (Decl. of Makerian ¶10, Exh. A at §8, emphasis added.)

Based on the evidence before the Court, the terms of the Arbitration Agreement do not create overly harsh or one-sided results, satisfying the requirements for a substantively conscionable agreement.

Based on the foregoing, the Court finds the Arbitration Agreement is not substantively unconscionable.

Defendant’s motion to compel arbitration of Plaintiff’s claims is granted. The Court sets a Status Conference regarding the arbitration on January 13, 2026, at 8:30 a.m. in Department 71. The parties are ordered to submit a Joint Status Conference Report advising the Court of the status of the matter by January 6, 2026. Plaintiff’s representative claim is stayed pending the arbitration.

Hon. Daniel M. Crowley

Judge of the Superior Court

[1] The Court notes Plaintiff’s first name is misspelled in this case’s caption as “Adreien”; nevertheless, this Court and will refer to Plaintiff in this motion as “Adrien.”