Judge Daniel M. Crowley, Case Number: 24STCV22976, Date: 2025-06-05 Tentative Ruling

Defendant DSMD Del Enterprise, LLC’s motion to compel arbitration of Plaintiff Isabella Amor Orozco’s individual claims in this action is granted. Plaintiff’s representative PAGA claim is not compelled to arbitration and is stayed pending arbitration of Plaintiffs’ individual PAGA claims.

Defendant’s 5/29/25 evidentiary objections to the Declaration of Isabella Amor Orozco (“Orozco”) are overruled as to Nos. 1, 2, 3, 4, 5, and 6.

On September 6, 2024, Plaintiff filed the instant action for civil penalties pursuant to Labor Code §§2699, et seq. for violations of Labor Code §§201, 202, 203, 204, 226(a), 226.7, 432, 510, 1174, 1174.5, 1194, 1198, 1198.5(a), 1199, and 2802. (See Complaint ¶¶15-47.) Defendant filed the instant motion on February 21, 2024. Plaintiff filed her opposition on May 22, 2025. Defendant filed its reply on May 29, 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 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.) Here, both criteria are satisfied. First, Plaintiff agreed to arbitration when she entered into the Arbitration Agreement that contained the relevant arbitration clause. (Decl. of Huerta ¶¶3, 11, Exh. A.) Second, the Arbitration Agreements expressly cover “any dispute, claim, or controversy arising out of or in any way related to the employment, or having any connection whatsoever with the employment of (including the termination of” Plaintiff. (Decl. of Huerta ¶11, Exh. A.)

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. Defendant submitted evidence that on November 17, 2023, Plaintiff signed the Arbitration Agreement. (Decl. of Huerta ¶11, Exh. A at pg. 3.)

Plaintiff argues Defendant failed to authenticate the Arbitration Agreement. (Opposition, pg. 2.) Plaintiff’s argument is unavailing. “For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication.” (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218.) The moving party meets its initial burden to compel arbitration by attaching the executed copy of the arbitration agreement. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.) “Once [a copy of the arbitration agreement] is presented to the court, the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges.” (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160, citing Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) “The arbitration opponent must offer admissible evidence creating a factual dispute as to the authenticity of their signatures.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 757 [overturning a denial of a motion to compel based on a failure to remember signing the agreement].)

Defendant satisfied the initial burden by attaching a copy of the arbitration agreement to the Declaration of Plaintiff’s manager, Tana Huerta (“Huerta”). Plaintiff presents no evidence that even remotely suggests that she did not sign the arbitration agreement. Plaintiff does not cite authority that allows her to challenge the authenticity of the arbitration agreement. Simply failing to remember signing the arbitration agreement is insufficient. (Iyere, 87 Cal.App.5th at pg. 757 [stating a “person’s failure to remember signing is of little or no significance.”].)

Huerta declares that she was personally present on November 16, 2023, with Plaintiff during her onboarding. (Decl. of Huerta ¶2.) Huerta declares that she reviewed and explained the Arbitration Agreement to Plaintiff on November 16, 2023. (Decl. of Huerta ¶2.) Huerta declares that Plaintiff’s shift ended at around 2:00 p.m., Plaintiff then called Huerta that same day regarding finishing the onboarding process, and then Plaintiff signed the Arbitration Agreement electronically through the EHX system at 7:41pm. (Decl. of Huerta ¶¶2, 8, 9.) The EHX system requires each employee to make an account with a unique e-signature PIN. (Decl. of Huerta ¶¶4-6.) Huerta declares that Plaintiff executed the Arbitration Agreement through the EHX system with her unique e-signature PIN. (Decl. of Huerta ¶8.) Therefore, Huerta established that she has personal knowledge of the EHX system, Plaintiff’s onboarding, and Plaintiff’s signature of the Arbitration Agreement through the EHX system.

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

In connection with any dispute, claim, or controversy (“Claim(s)”) arising out of or in any way related to employment, or having any connection whatsoever with the employment of (including termination thereof) the employee signing below (“Employee”) and DMSD Del Enterprise, LLC (“Company”), including its joint and co-employers, present and former partners, owners, shareholders, members, officers, directors, managers, employees, agents, employee benefit and health plans, as well as parent entities, successor entities, related entities, and subsidiaries (collectively the Employee and Company are the “Parties”), whether based in contract, tort, or statutory duty or prohibition . . ..

This clause of the agreement is silent as to PAGA claims. However, a later paragraph states,

The Parties agree that they are waiving the right to bring, or to participate in a class action, representative action (including any claim brought under the Private Attorneys General Act of 2004 or “PAGA”), or collective action, whether filed in a court of law or in arbitration, against each other (“Class/Representative Action Waiver”). The Parties agree that any arbitration will proceed on an individual basis only. No other parties or their claims shall be joined, nor shall the arbitrator have authority to do so. To the extent any Claim(s) or portion of the Claim(s) cannot be compelled to arbitration under this Agreement or applicable law (“Excluded Claims”), the Parties agree to bifurcate and stay the Excluded Claims for the duration of the arbitration proceedings to the maximum extent allowed by law unless the court dismisses the Excluded Claims. To the extent Employee is now or is later considered a class member of a class action filed by another employee, Employee agrees to opt-out of the class action.

Further, the Arbitration Agreements contain a severability clause: “If any provision(s), including any portion thereof, of this Agreement is/are deemed unenforceable, only the unenforceable portions of any provision(s) shall be severed and the remainder of this Agreement shall continue in full force and effect to the fullest extent permitted under the law.” (Decl. of Huerta ¶11, Exh. A at pg. 2.)

Defendant’s argument that Plaintiff’s individual PAGA claims must be compelled to arbitration and Plaintiff’s representative PAGA claim should be stayed in this Court pending the completion of individual arbitration in the interest of judicial efficiency is well taken. Here, Plaintiff’s individual PAGA claim arises from her employment relationship with Defendant and is therefore governed by the Arbitration Agreement.

Pursuant to the California Supreme Court’s ruling in Adolph v. Uber Technologies, Inc., “[n]othing in PAGA or any other relevant statute suggests that arbitrating individual claims effects a severance. When a case includes arbitrable and nonarbitrable issues, the issues may be adjudicated in different forums while remaining part of the same action.” (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1124.) The Adolph Court further stated:

Code of Civil Procedure section 1281.4 states that upon “order[ing] arbitration of a controversy which is an issue involved in an action,” the court should “stay the action.” It further provides that “[i]f the issue which is the controversy subject to arbitration is severable, the stay may be with respect to that issue only.” Section 1281.4 does not contemplate that the compelled arbitration of an issue in controversy in the action is a separate action. The statute makes clear that the cause remains one action, parts of which may be stayed pending completion of the arbitration.

Here, Defendant met their burden of establishing the Arbitration Agreement covers the causes of action asserted in Plaintiff’s complaint as to her individual PAGA claim and such claim can be compelled to arbitration. However, Defendant cannot compel Plaintiff’s representative PAGA claim, and Defendant concedes that such claims should be stayed in this Court. (See Motion, pg. 14.)

Accordingly, Plaintiff’s covered claim relating to her individual PAGA action relate to the Arbitration Agreement and can therefore be compelled to arbitration. Plaintiff’s representative PAGA action does not relate to the Arbitration Agreement and therefore cannot be compelled to arbitration.

“[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 and therefore oppressive. (Opposition, pgs. 4-6.)

“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 she had no meaningful opportunity to negotiate the Arbitration Agreement is unavailing. 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 document, and Plaintiff was provided with the opportunity to ask Huerta any questions while reviewing the document, and Huerta declares that Plaintiff even called Huerta after her shift ended on November 16, 2023, about the onboarding process generally and again did not raise any questions regarding the Arbitration Agreement. (See Decl. of Huerta ¶2.) Therefore, Plaintiff has failed to demonstrate any procedural unconscionability. (Hicks v. Superior Court (2004) 115 Cal.App.4th 77, 91.)

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 it (1) lacks mutuality; (2) is overbroad; (3) has an indefinite duration; and contains a blanket PAGA waiver. (Opposition, pgs. 6-9; Armendariz, 24 Cal.4th at pg. 110-111.)

“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’s argument that the Arbitration Agreement lacks mutuality is unavailing. Here, the Arbitration Agreement is explicitly mutual, as it states: “the employee signing below (“Employee”) and DMSD Del Enterprise, LLC (“Company”) . . . agree to submit the Claim(s) to binding arbitration.” (Decl. of Huerta ¶11, Exh. A.) This language is reciprocal in nature, and Plaintiff had the right to compel Defendant to arbitration.

Second, Plaintiff’s argument that the Arbitration Agreement is overbroad is unavailing. Plaintiff relies on Cook v. University of Southern California, where the arbitration clause required the employee plaintiff to arbitrate “any and all claims” she might have against the defendant “or any of its related entities, including but not limited to faculty practice plans, or its or their officers, trustees, administrators, employees or agents, in their capacity as such or otherwise.” (Cook v. University of Southern California (2024) 102 Cal.App.5th 312, 326.) The Cook Court ruled that the arbitration clause was unconscionable because “[n]o explanation is offered as to why [the plaintiff] should be required to give up the ability to ever bring claims in court against a USC employee that are unrelated to USC or her employment there.” (Id. at pg. 327.) Unlike in Cook, here, the claims subject to arbitration are tethered to Plaintiff’s employment claims alleged within her individual PAGA claim. (See Decl. of Huerta ¶11, Exh. A.)

Third, Plaintiff’s argument that the Arbitration Agreement’s “infinite duration” renders the agreement substantively unconscionable is unavailing. Plaintiff again cites to Cook, which does not stand, as Plaintiff suggests, for the premise that an arbitration agreement that does not contain a means of revoking the agreement or modifying the agreement is unconscionably infinite in duration. Such a holding would conflict with long-standing California law. (Zee Medical Distribution Ass’n, Inc. v. Zee Medical, Inc. (2000) 80 Cal.App.4th 1, 7 [“California cases have long recognized that a contract may, by its express terms, provide for a term of duration of indefinite length and without specific limitation . . .”].)

Cook indicates that a provision may go beyond an employee’s termination if there is “a legitimate commercial need.” Such a need was not proffered by the employer in Cook and the court expressed concern that a former employee could be required to arbitrate claims entirely unrelated to their employment, like a later “botched surgery” at a USC hospital. (Cook, 102 Cal.App.5th at pg. 318.) Here, however, Plaintiff does not identify any situation where she would have further dealings with Defendant that are not in some way related to her prior employment. A court or arbitrator enforcing the Arbitration Agreement would be required to apply the Arbitration Agreement so that it only applies to claims that are within a legally permissible scope and an applicable statute of limitations.

Finally, Plaintiff’s argument that the Arbitration Agreement contains a “blanket waiver” to PAGA claims is simply not the case. Here, the Arbitration Agreement states, “[t]o the extent that any Claim(s) or portion of the Claim(s) cannot be compelled to arbitration under this Agreement or applicable law (“Excluded Claims”), the Parties agree to bifurcate and stay the Excluded Claims for the duration of the arbitration proceedings.” (See Decl. of Huerta ¶11, Exh. A.) Therefore, the Arbitration Agreement expressly permits Plaintiff to bring a representative PAGA action.

Nonetheless, the Arbitration Agreement is consistent with applicable law permitting arbitration of an individual PAGA claim and severance of the non-individual PAGA claims. (See Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 662 [“We hold that the FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non- individual claims through an agreement to arbitrate,” and therefore “Viking [River Cruises] is entitled to compel arbitration of [plaintiff’s] individual [PAGA] claim.”]; see also Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1118-1119 [“Viking River requires enforcement of agreements to arbitrate a PAGA plaintiff’s individual claims if the agreement is covered by the FAA”].)

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 Adolph Court stated, with respect to staying a representative PAGA action pending the resolution of an individual PAGA claim in arbitration:

[T]he trial court may exercise its discretion to stay the non-individual claims pending the outcome of the arbitration pursuant to section 1281.4 of the Code of Civil Procedure. Following the arbitrator’s decision, any party may petition the court to confirm or vacate the arbitration award under section 1285 of the Code of Civil Procedure. If the arbitrator determines that Adolph is an aggrieved employee in the process of adjudicating his individual PAGA claim, that determination, if confirmed and reduced to a final judgment (Code Civ. Proc., §1287.4), would be binding on the court, and Adolph would continue to have standing to litigate his nonindividual claims. If the arbitrator determines that Adolph is not an aggrieved employee and the court confirms that determination and reduces it to a final judgment, the court would give effect to that finding, and Adolph could no longer prosecute his non-individual claims due to lack of standing. (See Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65, 76-82, 304 Cal.Rptr.3d 587)

Here, it would be prudent for this Court to stay Plaintiff’s representative PAGA claims to avoid unnecessarily duplicative and potentially conflicting rulings on whether Plaintiff is an “aggrieved employee” under the PAGA statute.

Accordingly, Plaintiff’s representative PAGA cause of action in this case is stayed pending arbitration of Plaintiff’s individual PAGA claim.

Defendant’s motion to compel arbitration of Plaintiffs’ individual PAGA claims is granted. Plaintiff’s representative PAGA claims is not compelled to arbitration and remains under this Court’s jurisdiction and is stayed pending arbitration.

The Court sets a non-appearance case review for June 5, 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