Judge Daniel M. Crowley, Case Number: 24STCV19719, Date: 2025-01-15 Tentative Ruling

Defendant Global Electronic Technology, Inc.’s motion to compel arbitration of Plaintiff Shabana Syed’s claims in this action is granted. This case is stayed pending arbitration and mediation.

Defendant Global Electronic Technology, Inc. (“GET”) (“Defendant”) moves for an order compelling arbitration of all claims asserted by Plaintiff Shabana Syed (“Syed”) (“Plaintiff”) and to stay the action pending arbitration. (Notice of Motion, pg. 2; C.C.P. §§1281 et seq., 1281.4; 9 U.S.C. §§1 et seq.)

On August 6, 2024, Plaintiff filed her operative complaint (“Complaint”) against Defendant alleging three causes of action: (1) wrongful termination against public policy; (2) Whistleblower Retaliation in Violation of Labor Code §1102.5; and (3) intentional infliction of emotional distress.

Defendant filed the instant motion on September 30, 2024. Plaintiff filed her opposition on December 30, 2024. Defendant filed its reply on January 8, 2025.

Federal law provides for enforcement of this Arbitration Agreement. 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 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.) Here, both criteria are satisfied. First, Plaintiff agreed to arbitration on November 23, 2022, when he signed an arbitration agreement with Mattel (“Arbitration Agreement”). (Decl. of Tolentino ¶8, Exh. E.) Second, the Arbitration Agreement expressly covers “all disputes, whether based on tort, contract, statute . . . equitable law, or otherwise” including:

[A]ny claims of discrimination, harassment and/or retaliation, whether they be based on the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, as amended, or any other state or federal law or regulation.

The only exception to the requirement of binding arbitration shall be for claims arising under the National Labor Relations Act which are brought before the National Labor Relations Board, claims for medical and disability benefits under the California Workers’ Compensation Act, Employment Development Department claims, or as may otherwise be required by state or federal law. However, nothing herein shall prevent [Plaintiff] from filing and pursuing proceedings before the California Department of Fair Employment and Housing, or the United States Equal Employment Opportunity Commission (although if [Plaintiff choses] to pursue a claim following the exhaustion of such administrative remedies, that claim would be subject to the provisions of this Agreement).

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 proved the existence of an arbitration agreement with Plaintiff. Defendants submitted evidence that on November 23, 2022, Plaintiff executed the Arbitration Agreement with Defendant. (Decl. of Tolentino ¶8, Exh. E.)

Based on the foregoing, Defendant proved the existence of a valid Arbitration Agreement with Plaintiff that is enforceable by Defendant.

I further agree and acknowledge that the Company and I will utilize binding arbitration as the sole and exclusive means to resolve all disputes that may arise out of or be related in any way to my employment, including but not limited to the termination of my employment and my compensation. The Company and I each specifically waive and relinquish our right to bring a claim against the other in a court of law, and this waiver shall be equally binding on any person who represents or seeks to represent me or the Company in a lawsuit against the other in a court of law. Both I and the Company agree that any claim, dispute, and/or controversy that I may have against Company (or its owners, directors, officers, managers, employees, or agents), or the Company may have against me, shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act (“FAA”), in conformity with the procedures of the California Arbitration Act (Cal. Code Civ. Proc. sec 1280 et seq., including section 1283.05 and all of the Act’s other mandatory and permissive rights to discovery).

(Decl. of Tolentino ¶8, Exh. E at §2, emphasis added.) Plaintiff’s claims arise out of the termination of her employment. (See Complaint.)

Based on the foregoing, Defendant met its burden of establishing the Arbitration Agreement covers the causes of action asserted in Plaintiff’s Complaint.

“[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. 5-7.)

“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 her requirement to sign the Arbitration Agreement as a condition of her 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 Arbitration Agreement is a stand-alone, two-page document which Plaintiff accessed via email. Defendant’s paralegal declares:

GET provided the Agreement along with other onboarding documents to Plaintiff via e-mail on November 22, 2022. Exhibit B. In this same e-mail, GET provided Plaintiff the opportunity to review and ask questions about the provided documents, stating in relevant part, “[i]n the meantime, if you have any questions don’t hesitate to reach out to me.” Id. Thereafter, Plaintiff signed – via a wet signature – the Agreement on November 23, 2022, and never opted out. A full week passed between GET providing Plaintiff with the onboarding documents and Plaintiff returning the signed Agreement, and other onboarding documents, to GET via e-mail on November 28, 2022. Attached hereto as Exhibit C is a true and correct copy of Plaintiff’s November 28, 2022 email containing her signed documents, including the Agreement. On November 28, 2022, Plaintiff also emailed Paige Vigneault, GET’s then Human Resources manager, wherein she asked questions related to the onboarding documents. Attached hereto as Exhibit D is a true and correct copy of Plaintiff’s November 28, 2022 email. Notably, Plaintiff did not ask any questions about the Agreement. Plaintiff’s signature on the Agreement matches the other signatures on her onboarding paperwork and other documents, such as Plaintiff’s notice of employment separation, dated April 4, 2023.

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 her opposition with sufficient evidence to contradict that Defendant provided her with sufficient opportunities to review and ask questions about the documents she 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 limits Plaintiff’s ability to take depositions; (2) the Arbitration Agreement contains a requirement that completely abrogates the purported reasons for binding arbitration – faster resolution of disputes and finality of the award; and (3) the Arbitration Agreement does not state which party shall bear the cost of arbitration or the subsequent appellate-level review of the arbitrator’s award. (Opposition, pgs. 7-10.)

“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 does not allow any depositions to be taken. Plaintiff is mistaken. “[W]hen parties agree to arbitrate statutory claims, they also implicitly agree, absent express language to the contrary, to such procedures as are necessary to vindicate that claim.” (Armendariz, 24 Cal.4th at pg. 106.) Even if the Agreement did not mention discovery rights or depositions at all, “the absence of such a provision does not make it unconscionable because the right to discovery is guaranteed by section 1283.05, subdivision (a), which provides, in relevant part, ‘[T]he parties to the arbitration shall have the right to take depositions and obtain discovery . . ..’” (Navas v. Fresh Venture Foods, LLC (2022) 85 Cal.App.5th 626, 633.) Furthermore, “[a]n employer who agrees to arbitrate claims impliedly ‘consent[s]’ to a procedure that allows for discovery.” (Id., citing Armendariz, 24 Cal.4th at pg. 106). Here, the Agreement provides for “binding arbitration under the Federal Arbitration Act (“FAA”), in conformity with the procedures of the California Arbitration Act (Cal. Code Civ. Proc. sec 1280 et seq., including section 1283.05 and all of the Act’s other mandatory and permissive rights to discovery).” (Decl. of Tolentino ¶8, Exh. E at §2.) No provision specifically mentioning depositions is necessary, because the right to take depositions is always implied. Furthermore, the agreement expressly allows for all mandatory and permissive discovery, which includes depositions.

Second, Plaintiff’s argument that Agreement’s provision allowing for review of the arbitrator’s opinion is substantively unconscionable is unavailing. Plaintiff cites to Little v. Auto Stiegler, Inc., where the court found a provision unconscionable because it allowed either party to request a second review of the arbitrator’s opinion, only when the award exceeded $50,000. (See Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071.) However, the Little Court found the provision to be unconscionable only because of the $50,000 threshold. (Id. at pg. 1073.) Specifically, the Little Court found the review provision to be unconscionable because the plaintiff would not be able to appeal cases where an arbitrator wrongly ruled that the plaintiff take nothing and thus “the $50,000 threshold inordinately benefits defendants.” (Id.) The Little Court did not find that a provision allowing for review of the arbitrator’s decision was inherently unenforceable but only that the dollar amount threshold would benefit defendants unevenly. Regardless, the Little Court held that the unconscionable provision was severable and that the “arbitration agreement is valid and enforceable once the unconscionable appellate arbitration provision is deleted.” (Id. at pg. 1076.)

Here, unlike in Little, the Agreement’s provision allowing for review is not substantively unconscionable, because there is no dollar amount threshold. The Agreement equally allows either party to request review of the arbitrator’s opinion. The relevant provision states:

Within thirty days of the arbitrator’s final written opinion and order, the opinion shall be subject to affirmation, reversal or modification, at either party’s written request, following review of the record and arguments of the parties by a second arbitrator who shall, as far as practicable, proceed according to the law and procedures applicable to appellate review by the California Court of Appeal of a civil judgment following court trial.

(Decl. of Tolentino, Exh. E). The provision contains no dollar amount threshold for appeal and does not unequally benefit either party. Therefore, Plaintiff’s argument on this basis is unavailing.

Finally, Plaintiff’s argument that the Agreement is unenforceable because it does not specify which party shall pay for the costs of arbitration (and appellate-level review of the arbitration award) is unavailing. Arbitration Agreements are enforceable even if they are silent as to which party bears the costs of arbitration. Where an employer requires an employee to arbitrate his or her claims, “the agreement must be interpreted (in the absence of any express terms to the contrary) to require the employer to pay any unusual costs associated with arbitration, such as the arbitrator’s fees.” (Fittante v. Palm Springs Motors, Inc. (2003) 105 Cal.App.4th 708, 719.) In Fittante, the Court of Appeal found that the arbitration agreement contained “no express provisions which provide for the payment of fees and costs.” (Id.) The Fittante Court held that the agreement could be construed consistently with the requirements of Armendariz and “thus satisfies, and does not contravene, the fifth Armendariz factor.” (Id.)

Here, Plaintiff alleges that the Agreement is silent as to which party is required to pay arbitration fees and costs. In the absence of express provisions, the Agreement must be interpreted to require the employer to pay any unusual costs associated with arbitration. Therefore, the Agreement satisfies the requirements of Armendariz and is enforceable.

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.

Pursuant to C.C.P. §1281.4, if an application has been made to a court involving order to arbitrate a controversy and such application is undetermined, the court where the application is pending shall, upon motion of a party to the action, stay the action until the application for an order to arbitrate is determined. (C.C.P. §1281.4.)

The case is stayed pending arbitration. The Court sets a case management conference for January 15, 2026, at 8:30 a.m. The parties are directed to submit a joint statement five calendar days in advance, apprising the Court of the status of the arbitration.

Hon. Daniel M. Crowley

Judge of the Superior Court