Judge: Daniel S. Murphy, Case: 24STCV09591, Date: 2024-08-02 Tentative Ruling

Case Number: 24STCV09591    Hearing Date: August 2, 2024    Dept: 32

BACKGROUND

            On April 16, 2024, Plaintiff Pablo Flores filed this employment discrimination action against Defendants Emerald Textiles, LLC and Emerald SoCal, LLC.

            On June 11, 2024, Defendant Emerald SoCal, LLC filed the instant motion to compel arbitration. Plaintiff filed his opposition on July 25, 2024. Defendant filed its reply on July 26, 2024.

LEGAL STANDARD

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….” (Code Civ. Proc, § 1281.2.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

DISCUSSION

I. Proof of Agreement

            “The moving party ‘can meet its initial burden by attaching to the motion or petition a copy of the arbitration agreement purporting to bear the opposing party's signature.’” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)

            On November 30, 2021, Plaintiff signed a “Mutual Agreement to Arbitrate Claims” covering “all claims or disputes” brought by either party relating to Plaintiff’s “application for employment, employment, or separation of employment.” (Beach Decl., Ex. E.) Plaintiff does not dispute this evidence. Thus, Defendant has satisfied its burden of proving the existence of an arbitration agreement covering the claims at issue.

            The burden shifts to Plaintiff to establish a defense against enforcement. (Pinnacle, supra, 55 Cal.4th at p. 236.) Plaintiff argues that the agreement is unconscionable.

II. Unconscionability

Unconscionability has both a procedural and a substantive element. (Aron v. U-Haul Co. of California (2006) 143 Cal.App.4th 796, 808.) Both elements must be present for a court to invalidate a contract or clause. (Ibid.) However, the two elements need not be present in the same degree; courts use a sliding scale approach in assessing the two elements. (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 242.)

a. Procedural Unconscionability

Procedural unconscionability “focuses on two factors: ‘oppression’ and ‘surprise.’ ‘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 supposedly agreed-upon terms of the bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disputed terms.” (Zullo v. Superior Court (2011) 197 Cal.App.4th 477, 484, internal citations omitted.)

            1. Contract of Adhesion

Plaintiff argues that the agreement is procedurally unconscionable because it is a contract of adhesion. Plaintiff avers that “I was told to just sign if I wanted to work.” (Flores Decl. ¶ 4.) Plaintiff does not speak English and did not understand the agreement, which was written in English. (Ibid.) No one otherwise explained the agreement to Plaintiff. (Ibid.)

The law is clear that none of these facts negate the enforceability of an arbitration agreement. First, the contract plainly states that it is not mandatory nor a condition of employment. (Beach Decl., Ex. E, § 8.) Even if the agreement were mandatory, the adhesive nature of a contract represents only a minimal degree of procedural unconscionability. (Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704.) Furthermore, “one who signs an instrument which on its face is a contract is deemed to assent to all its terms.” (Marin Storage & Trucking, Inc. v. Benco Contracting & Engineering, Inc. (2001) 89 Cal.App.4th 1042, 1049.) “No law requires that parties dealing at arm's length have a duty to explain to each other the terms of a written contract.” (Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1674.) “Generally, a party may not avoid enforcement of an arbitration provision because the party has limited proficiency in the English language.” (Caballero v. Premier Care Simi Valley LLC (2021) 69 Cal.App.5th 512, 518.)

Despite not reading the contract or not understanding it, Plaintiff still signed it. Thus, Plaintiff is deemed to assent to the terms of the contract. The contract states that “[t]here is a version of this agreement in Spanish, available upon request.” (Beach Decl., Ex. E.) There is no indication that Plaintiff expressed trouble reading the English version or requested a different version. The agreement also states that “[y]ou are free to seek assistance from independent advisors.” (Ibid.) There is no indication that Plaintiff attempted to seek assistance. There is no indication that Defendant refused to explain the agreement to Plaintiff or prevented Plaintiff from seeking independent advice. Plaintiff’s claim that he did not have a “reasonable opportunity” to review the agreement is conclusory and presents no actual facts demonstrating that Defendant prevented Plaintiff from reviewing the agreement. (See Flores Decl. ¶ 4.)

            2. Failure to Attach Rules

Plaintiff argues that the agreement fails to attach the arbitration rules. However, “the failure to attach the [arbitration] rules, standing alone, is insufficient grounds to support a finding of procedural unconscionability.” (Peng v. First Republic Bank (2013) 219 Cal.App.4th 1462, 1472.) The arbitration agreement clearly states that the arbitration will proceed under JAMS Employment Rules and provides an internet link to access the rules. (Beach Decl., Ex. E.) Alternatively, the agreement informs Plaintiff that a copy is available from HR upon request. (Ibid.) Plaintiff’s claim that he was not given an opportunity to review the rules is unsupported by evidence and contradicted by the plain terms of the agreement.

b. Substantive Unconscionability

Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results as to shock the conscience. (Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1515.)  

            1. Attorney’s Fees

Plaintiff argues that the agreement improperly waives his statutory right under FEHA to recover attorney’s fees (Gov. Code, § 12965(b)) because it requires each party to bear their own attorney’s fees and costs. However, the agreement states that “[e]ach party will pay the fees for his/her/its own attorneys, subject to any remedies to which that party may later be entitled under applicable law.” (Beach Decl., Ex. E, § 7.) The agreement expressly allows Plaintiff to recover attorney’s fees under applicable law, which includes FEHA. Therefore, the agreement does not waive Plaintiff’s right to recover attorney’s fees under FEHA.

            2. Costs of Arbitration

Plaintiff argues that the agreement improperly requires him to bear the costs of arbitration because Defendant only agreed to pay for “referee fees.” This is plainly contradicted by the terms of the agreement, which provide that “Company will pay the Arbitrator's fees and any fee for administering the arbitration.” (Beach Decl., Ex. E, § 7.)

            3. Discovery 

Plaintiff argues that “the arbitration agreement fails to provide for any discovery.” (Opp. 9:9-10.) Again, this is plainly contradicted by the terms of the agreement. The agreement states that “[t]he parties have the right to conduct discovery and present witnesses and evidence as needed to present their cases and defenses” and that “[e]ach party shall have the right to subpoena witnesses and documents, including documents relevant to the case from third parties.” (Beach Decl., Ex. E, § 6.) The agreement provides for a certain number of depositions, interrogatories, and requests for production, but also states that “additional discovery may be conducted by agreement or as ordered by the Arbitrator.” (Ibid.)

Plaintiff cites no authority for the proposition that an arbitration agreement is unconscionable simply because it provides for less discovery than would otherwise be available in court. “[A]rbitration is meant to be a streamlined procedure. Limitations on discovery . . . is one of the ways streamlining is achieved.” (Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 983.) Therefore, an arbitration agreement is only required to “provide[] for more than minimal discovery.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102.) The agreement here meets this standard. Having agreed to arbitration, Plaintiff cannot complain that he is unable to litigate the case as if he were in court.

            4. Waiver of Jury Trial

Plaintiff argues that he did not make a knowing and voluntary waiver of the right to a jury trial because the agreement did not inform Plaintiff that he had a constitutional right to a jury. However, the agreement clearly states on its first page, in bold and all caps, that “ALL DISPUTES COVERED BY THIS AGREEMENT SHALL BE DECIDED BY AN ARBITRATOR THROUGH FINAL AND BINDING ARBITRATION AND NOT BY A COURT, JURY TRIAL, OR ANY OTHER ADJUDICATORY PROCEEDING.” (Beach Decl., Ex. E.)

By signing the agreement, Plaintiff knowingly and voluntarily waived his right to a jury trial. (See Lawrence v. Walzer & Gabrielson (1989) 207 Cal.App.3d 1501, 1507 [“An arbitration agreement constitutes a waiver of the right to a jury trial”].) Plaintiff cites no authority for the proposition that the agreement must specifically inform him that the right to a jury is a constitutional right.

In sum, the Court finds no procedural or substantive unconscionability. Therefore, the arbitration agreement remains enforceable.

CONCLUSION

            Defendant’s motion to compel arbitration is GRANTED. The Court hereby stays the case in its entirety.