Judge Daniel S. Murphy, Case Number: 24STCV15417, Date: 2025-01-27 Tentative Ruling

On June 20, 2024, Plaintiff Kendell Rogers filed this action for employment discrimination against Defendant Be Structured Technology Group, Inc.

On December 20, 2024, Defendant filed the instant motion to compel arbitration. Plaintiff filed his opposition on January 13, 2025. Defendants filed their reply on January 17, 2025.

“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.)

Furthermore, the Federal Arbitration Act (FAA) states that “[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . 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 FAA governs contracts “involving commerce,” which has been interpreted to mean simply “affecting commerce” to give the FAA the broadest reach possible, and does not require a transaction that is actually “within the flow of interstate commerce.” (See Allied-Bruce Terminix Co. v. Dobson (1995) 513 U.S. 265, 273-74; Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56.) Moreover, parties may agree to apply the FAA notwithstanding any effect on interstate commerce. (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355.)

“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.)

Here, Plaintiff electronically signed a Terms and Conditions Agreement (TCA) with professional service organization TriNet at the beginning of his employment with Defendant. (Thompson Decl., Ex. A, B.) The TCA contains a Dispute Resolution Protocol (DRP) which mandates arbitration of “any dispute arising out of or relating to your coemployment with TriNet, including your TriNet co-employer, and/or arising out of or relating to your employment with your company, as well as any dispute with an employee, officer, or director of TriNet or of a TriNet customer.” (Id., Ex. A, p. 5.) In this case, Defendant is the co-employer or TriNet customer. (Id. at pp. 1-2.)

Plaintiff does not dispute his signature on the TCA. Instead, Plaintiff claims that he cannot recall signing an arbitration agreement. (Rogers Decl. ¶ 4.) However, “[i]f a party confronted with his or her handwritten signature on an arbitration agreement is unable to allege that the signature is inauthentic or forged, the fact that that person does not recall signing the agreement neither creates a factual dispute as to the signature's authenticity nor affords an independent basis to find that a contract was not formed.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 758.) Because Plaintiff does not dispute the authenticity of his signature on the TCA, his failure to recall signing it is immaterial.[1]

Defendant has proven that an arbitration agreement exists covering the claims at issue.

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.)

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.)

Plaintiff argues that the DRP is unenforceable as a contract of adhesion. (See Rogers Decl. ¶¶ 4-5.) However, 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.) “[A] compulsory predispute arbitration agreement is not rendered unenforceable just because it is required as a condition of employment.” (Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105, 1127.)

Plaintiff avers that he “was given no additional time to read, review, and familiarize” himself with the TCA and that “no one explained” arbitration to him. (Rogers Decl. ¶¶ 5-6.) Plaintiff further avers that he was “not offered time to consult with a lawyer or legal professional.” (Id., ¶ 7.)

However, “[n]o 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.) “Reasonable diligence requires the reading of a contract before signing it. A party cannot use his own lack of diligence to avoid an arbitration agreement.” (Ibid.) By signing the TCA, Plaintiff acknowledged that he “read and underst[ood] the contents of this TCA including, but not limited to, the Dispute Resolution Protocol (‘DRP’).” (Thompson Decl., Ex. A, p. 7.) The acknowledgement explicitly states that the DRP is “a waiver of my right to a jury trial.” (Ibid.) Thus, Plaintiff was not surprised or oppressed by the terms of the TCA.

Plaintiff’s claim that he was not given “additional” time to read the TCA and not “offered” time to consult with counsel is insufficient to create unconscionability. There is no indication that Plaintiff requested additional time or was denied a sufficient amount of time to review the agreement. Plaintiff cites no authority for the proposition that Defendants were required to affirmatively inform him of the right to consult counsel. There is no indication that Plaintiff was prohibited from seeking legal advice.

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.)

Plaintiff argues that the DRP is unconscionable because it has an indefinite duration. The DRP states that it “will survive the termination of the employment relationship.” (Thompson Decl., Ex. A, p. 5.) Plaintiff cites no authority suggesting that this is unconscionable. The DRP requires an employee to arbitrate disputes related to their employment, including termination. This would have no effect if the DRP did not survive the termination of employment. Furthermore, the statute of limitations naturally limits the duration of the obligation to arbitrate. Thus, the duration of the DRP does not cause any unconscionability.

Plaintiff argues that the DRP is unconscionable because it only requires arbitration of claims that are traditionally only brought by employees, such as discrimination and harassment. However, the DRP plainly applies to “any dispute” arising out of Plaintiff’s employment. (Thompson Decl., Ex. A, p. 5.) The fact that the DRP lists some examples of covered claims does not mean it is limited to those claims, especially when the DRP specifically states that the list is non-exhaustive. (See Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1249.) “Any” claim necessarily includes claims brought by Defendant. (Ibid.) Accordingly, the DRP is sufficiently mutual.

In sum, the Court finds a minimal degree of procedural unconscionability and no substantive unconscionability.

Defendant’s motion to compel arbitration is GRANTED. The case is stayed in its entirety pending the outcome of arbitration.

[1] It should also be noted that Plaintiff recalls being presented with the TCA and being told to sign it as a condition of employment. (Rogers Decl. ¶ 4.) This belies Plaintiff’s claim that he does not recall signing the TCA.