Judge: David A. Hoffer, Case: 30-2022-1263557, Date: 2022-10-31 Tentative Ruling

The Motion to Compel Arbitration filed by moving party Invitae Corporation (here “MP”) is GRANTED, subject to severance of the venue provision in the Agreement at issue which purports to require her to arbitrate in San Francisco; the balance of the action is STAYED pending completion of the arbitration.

MP has demonstrated that a written agreement to arbitrate this controversy exists and has provided a copy of the relevant agreement – the “At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement” (here, the “Agreement”). (See French Decl. at ROA 18, Ex.  B.)  That Agreement clearly provides for arbitration of these employment-related disputes, as to all of the Defendants. Plaintiff does not dispute that this is so, and yet  refuses to arbitrate such controversy. The essential requirements for this motion are thus met for C.C.P. § 1281.2. 

However, Plaintiff correctly asserts that she may not be compelled to arbitrate her claims in San Francisco.  As explained in Malloy v. Superior Court of Los Angeles County (2022) 83 Cal.App.5th 543, a “special venue provision” under FEHA, at Gov. Code § 12965(c)(3), allows FEHA plaintiffs to file a lawsuit “in any county in the state in which the unlawful practice is alleged to have been committed, in the county in which the records relevant to the practice are maintained and administered, or in the county in which the aggrieved person would have worked ... but for the unlawful practice.” That applies to the entire action. (Id.) The provision in the Agreement which purports to require her to arbitrate in San Francisco thus cannot stand against that special venue provision.  The Court will thus sever the San Francisco venue provision, and, if that provision is severed, the balance of the arbitration provisions in the Agreement are not  unconscionable.

A contract must be both procedurally and substantively unconscionable to be unenforceable. (Gatton v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 579.)  A nonnegotiable contract of adhesion in the employment context is procedurally unconscionable. (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 796.) But the degree of unconscionability is low where there is no other indication of oppression or surprise, and the agreement will be enforceable unless the degree of substantive unconscionability is high. (Id.) 

Once the San Francisco venue provision is severed, substantive unconscionability is not shown. The additional travel costs and additional burden which would fall on Plaintiff to proceed elsewhere are obviated. Her concerns about a “home court advantage,” regardless of the merits of any such concerns, should also be alleviated.

In addition, although Plaintiff has expressed concerns about the extent to which the confidentiality provisions in the Agreement could be read to impede her ability to present evidence, MP asserts on reply (at p. 7, fn. 5) that they are separate and that it does not assert that any provision therein could or would be used to impede her ability to fully present her case in the arbitration proceedings.  Based on that representation, which the Arbitrator can also enforce, there is no apparent substantive unconscionability here which would preclude arbitration.

Finally, although Plaintiff claims that the nonpublic proceedings in an arbitration are unlawful in the context of her claims, that claim is not shown. C.C.P. § 1001 specifically applies only to settlement agreements, and thus does not apply in this context. And, although the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, codified at 9 U.S.C. §§ 401 et seq., allows a plaintiff “alleging conduct constituting a sexual harassment or a sexual assault dispute” to elect to render invalid and unenforceable an arbitration provision applicable to their case, it applies only to a “dispute or claim that arises or accrues on or after the date of enactment of this act.” Neither side has cited California authority addressing the application of that provision on cases filed after its 3/3/22 effective date, but based on events which had occurred prior to that time.  However, the reasoning on that issue as stated in Walters v. Starbucks Corp., No. 22CV1907 (DLC), 2022 WL 3684901 at ** 2-3 (S.D.N.Y. Aug. 25, 2022) appears to apply equally here – that accrual should be determined based on the date of the events at issue, rather than the filing of a suit related thereto. As Plaintiff here alleges that she was terminated on 10/22/21 (Complaint ¶¶ 13, 37), the statute thus does not apply.

The Motion is thus GRANTED, except that the venue provision in the Agreement at issue which purports to require her to arbitrate in San Francisco is severed and may not be enforced here. This action is STAYED pending completion of the arbitration, in accordance with C.C.P. § 1281.4.  

Counsel for MP is ordered to give notice of this ruling.