Judge: Douglas W. Stern, Case: 23STCV11567, Date: 2023-10-23 Tentative Ruling
Case Number: 23STCV11567 Hearing Date: October 23, 2023 Dept: 68
Artin
Arakelian vs. Bloomingdales, LLC, et al., 23STCV11567
Motion to Compel
Arbitration
Moving
Parties – Defendants Bloomingdales, LLC and Lawrence Quijada
Opposing
Party – Plaintiff Artin Arakelian
Background and Moving Party’s Position
This is an employment law case where
Plaintiff Artin Arakelian (Plaintiff) sued Defendant Bloomingdales, LLC
(Defendant) and other Defendants, including Lawrence Quijada, for harassment
and discrimination. Plaintiff filed the lawsuit on May 23, 2023.
The motion to compel arbitration and
stay proceedings filed by Defendants is based on a form that Plaintiff allegedly
electronically signed when he began working for Macy’s. The form is called Solutions
InSTORE New Hire Acknowledgment. (Ripak Decl., Ex. D.) It includes references
to Defendant’s arbitration program. From the time Plaintiff signed the form,
Plaintiff had 30 days to opt out of Arbitration or Plaintiff would be
automatically enrolled in the program.
The form containing the arbitration clause
states as follows:
“I understand that if I do not opt out of
this program, any disputes or claims relating to my employment, other than
those expressly excluded from arbitration in the Plan document, will be
resolved using the Solutions InSTORE process described in the brochure and Plan
Document. The process continues to apply to such employment-related disputes
even after my employment ends.”
(Ripak Decl.,
Ex. D, p. 1.) The Plan document and brochure which the arbitration clause is
referring to were attached to the Ripak Declaration as Exhibits A and B.
Plaintiff did not have to sign these documents. The Plan document describes the
arbitration rules and procedures. The Plan document also describes the process
for selecting an arbitrator (Ripak Decl., Ex. A, pp. 9-10) and the discovery
process during arbitration (Ripak Decl., Ex. A, pp. 10-12), along with other
considerations for arbitration.
Defendants argue in their motion
that the parties’ arbitration agreement is valid and enforceable. Next,
Defendants argue that the arbitration agreement complies with Armendariz
because it provides for a neutral arbitrator, discovery, and a written
arbitration award. There is also no limitation on individual remedies and the
employee fee is minimal.
Opposing Party’s Position
Plaintiff opposes the motion for
several reasons. First, he argues in his opposition that Defendants failed to
establish that an agreement exists because there is no evidence that Plaintiff
electronically signed the document because the document could have been auto-populated
when Plaintiff completed the new hire paperwork. Plaintiff also argues that
there was no indication that he was signing a binding agreement to arbitrate
and that all of the onboarding documents were signed at the same time, so he
did not have a chance to review them.
Next, Plaintiff argues that even if
there is an agreement, it is procedurally and substantively unconscionable. He
argues that the take it or leave it provision makes it procedurally
unconscionable. He also argues that it is substantively unconscionable because
it lacks mutuality between Plaintiff and Defendant; there was no link to the
arbitration rules while he was going through the onboarding process; and the
repeat player effect means that there is not a neutral arbitrator.
Finally, Plaintiff argues that
Defendant Lawrence Quijada is not a party to the arbitration agreement, so he
cannot compel Plaintiff into arbitration.
Reply
Defendants argue in their reply that
they met their burden of showing that an arbitration agreement exists, and
Plaintiff failed to rebut their showing. They argue that Plaintiff does not
deny signing the New Hire Acknowledgment form in his declaration, nor does he
deny receiving the Plan Document, Brochure, and Electronic Form. Defendants
argue that Plaintiff admits to signing the documents because his opposition
says that he had no choice but to sign all the documents (Opposition pp. 6-7).
Defendants argue that the electronic signature has to be Plaintiff’s because he
had to create a unique personalized password that only he knew to view and sign
the documents. Defendants also described the various security procedures that
surround the onboarding process.
Next, Defendants argue that the
agreement is not procedurally unconscionable because there was no oppression or
surprise, and the agreement was not hidden. Defendants also argue that the
agreement is not substantively unconscionable because it is mutual and that his
repeat player argument is without merit.
Finally, Defendants argue that
Defendant Quijada is entitled to arbitration because the arbitration agreement
applies to claims against Bloomingdales’ employees or agents. (Ripak Decl., Ex.
A, p. 6.)
Analysis
I.
Legal Standard
California law incorporates many of the basic policy
objectives contained in the Federal Arbitration Act, including a presumption in
favor of arbitrability. (Engalla v. Permanente Medical Group, Inc.
(1997) 15 Cal.4th 951, 971-972.) The petitioner bears the burden of proving the
existence of a valid arbitration agreement by the preponderance of the
evidence. (Rosenthal v. Great Western Financial Securities Corp. (1996)
14 Cal.4th 394, 413.) The Court is empowered by CCP § 1281.2 to compel parties
to arbitrate disputes pursuant to an agreement to do so.
Code of Civil Procedure § 1281.2 states that:
“The court
shall order the petitioner and the respondent to arbitrate the controversy if
it determines that an agreement to arbitrate the controversy exists, unless it
determines that:
(a) The right to compel arbitration has been waived by the
petitioner; or
(b) Grounds exist for the revocation of the agreement.
(c) A party
to the arbitration agreement is also a party to a pending court action or
special proceeding with a third party, arising out of the same transaction or
series of related transactions and there is a possibility of conflicting
rulings on a common issue of law or fact. For purposes of this section, a
pending court action or special proceeding includes an action or proceeding
initiated by the party refusing to arbitrate after the petition to compel
arbitration has been filed, but on or before the date of the hearing on the
petition. This subdivision shall not be applicable to an agreement to arbitrate
disputes as to the professional negligence of a health care provider made
pursuant to Section 1295.” (CCP § 1281.2.)
The party petitioning to compel arbitration under written
arbitration agreement bears the burden of proving the existence of a valid
arbitration agreement by a preponderance of the evidence. The trial court acts
as the trier of fact, weighing all the affidavits, declarations, and other
documentary evidence. (CCP § 1281.2.)
A. Existence of an Agreement
Under California law, arbitration agreements are valid,
irrevocable, and enforceable, except on such grounds that exist at law or
equity for voiding a contract. (Winter v. Window Fashions Professions, Inc.
(2008) 166 Cal.App.4th 943, 947.) The party moving to compel arbitration must
establish the existence of a written arbitration agreement between the parties.
(CCP § 1281.2.) In ruling on a motion to compel arbitration, the court must
first determine whether the parties actually
agreed to arbitrate the dispute, and general
principles of California contract law help guide the court in making this
determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220
Cal.App.4th 534, 541.)¿
Once petitioners allege that an arbitration agreement
exists, the burden shifts to respondents to prove the falsity of the purported
agreement, and no evidence or authentication is required to find the
arbitration agreement exists. (See Condee v. Longwood Mgt. Corp. (2001)
88 Cal.App.4th 215, 219.)
“With respect to the moving party’s burden to provide
evidence of the¿existence¿of an agreement to arbitrate, it is generally
sufficient for that party to present a copy of the contract to the court. (See¿Condee
v. Longwood Management Corp.¿(2001) 88 Cal.App.4th 215, 218); see also Cal.
Rules of Court, rule 3.1330 [“A petition to compel arbitration or to stay
proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must
state, in addition to other required allegations, the provisions of the written
agreement and the paragraph that provides for arbitration. The provisions must
be stated verbatim or a copy must be physically or electronically attached to
the petition and incorporated by reference”].) Once such a document 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. [Citation]” (Baker v. Italian Maple
Holdings, LLC¿(2017) 13 Cal.App.5th 1152, 1160.)¿
Electronic signatures
are valid and enforceable under California law. (Civ. Code § 1633.7(a) (“A
record or signature may not be denied legal effect or enforceability solely
because it is in electronic form”).) The California Civil Code defines an
electronic signature as “an electronic sound, symbol, or process attached to or
logically associated with an electronic record and executed or adopted by a
person with the intent to sign the electronic record.” (Civ. Code § 1633.2(h).)
Defendants have
provided the Court with a copy of the arbitration agreement. There is an
electronic signature on this agreement that is attributed to Plaintiff. Plaintiff’s
declaration does not claim that he did not sign this document; rather, he
stated that “I do not recall signing any document with “Arbitration” in the
title.” (Arakelian Decl., ¶ 9.) The document containing the arbitration
agreement in question does not have “Arbitration” in the title. As such, it
does not appear that Plaintiff is claiming to have not signed the document,
only that he does not remember signing the document. The document provided by
Defendants is enough to show that an agreement exists between the parties.
B. Unconscionability
1. Procedural
Unconsionability
First, Plaintiff’s
argument that the arbitration provision is procedurally unconscionable because
it was allegedly presented on a take it or leave it basis does not hold up.
California courts have found that mandatory arbitration policies in employment
are not per se procedurally unconscionable. (See Baltazar v. Forever
21, Inc., (2016) 62 Cal. 4th 1237, 1245 (“take-it-or-leave-it” employment
arbitration agreement not procedurally unconscionable absent “surprise or other
sharp practices”); Mercuro v. Superior Court (2002) 96 Cal.App.4th 167,
175 (high degree of procedural unconscionability not present where employee was
neither threatened nor bullied into signing agreement); Lagatree v. Luce,
Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105, 1127 (“the
cases uniformly agree that a compulsory pre-dispute 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”).)
Plaintiff does not
claim that he was bullied or threatened into signing the Agreement. His
opposition only claims that he had to sign the Agreement as a condition of his
employment as part of the new hire onboarding process. This does not make the
Agreement procedurally unconscionable. In fact, the New Hire Acknowledgement
document containing the arbitration agreement includes a way to opt out of the
arbitration process. “I understand that I will be automatically enrolled in the
program and subject to final and binding arbitration from my date of hire
unless, within thirty (30) days of my date of hire, I take the steps required
to opt out of Step 4 – Arbitration.” (Ripak Decl., Ex. D, p. 1.) A process to
opt out shows that it was not presented on a take it or leave it basis, even if
that mattered.
The agreement is not
procedurally unconscionable.
2. Substantive
Unconscionability
For substantive
unconscionability, the California Supreme Court held in Armendariz v.
Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 that an
agreement to arbitrate employment-related statutory claims, such as claims
under the FEHA, is subject to certain minimal requirements: (1) the arbitration
agreement may not limit the damages normally available under the statute; (2)
there must be discovery sufficient to adequately arbitrate their statutory
claim; (3) there must be a written arbitration decision and judicial review
sufficient to ensure the arbitrators comply with the requirements of the
statute; and (4) the employer must pay all types of costs that are unique to
arbitration. (Pearson Dental Supplies, Inc. v. Superior Court (2010) 48
Cal.4th 665, 677 (citing Armendariz v. Foundation Health Psychcare Services,
Inc., 24 Cal.4th at 101-113).)
Plaintiff argues that
the agreement lacks mutuality between Plaintiff and Defendants, but he does not
really explain this argument.
Next, he argues that
he was not provided with the arbitration rules, but he signed the New Hire
Acknowledgement form, which states that “I have received a copy of the
Solutions InSTORE brochure and Plan Document and acknowledge that I have been
instructed to review this material carefully.” (Ripak Decl., Ex. D, p. 1.) All
the rules for arbitration are contained in the Plan Document, attached as Ex. A
to the Ripak Declaration. Based on this acknowledgment, Plaintiff was provided
with the arbitration rules.
Plaintiff’s argument
regarding repeat players also does not hold up. The rules in the Plan Document
provide that “the Solutions InSTORE Program Manager shall ask the American
Arbitration Association to provide the Company and the employee a panel of
seven (7) neutral arbitrators.” (Ripak Decl., Ex. A, p. 9.) The employee and
the company may then take turns striking the unacceptable arbitrators from the
panel until one remains. If the remaining one is unacceptable, then a new panel
will be requested, and if no arbitrator is acceptable on this panel, then
either party may request the AAA to simply appoint an arbitrator not on either
panel. (Ripak Decl., Ex. A, p. 10.) Based on this process, there is little risk
for the repeat player effect.
Based on the
foregoing, the arbitration agreement is not substantively unconscionable.
C. Inclusion of the Individual Defendant
Plaintiff argues that
the individual Defendant, Mr. Quijada, should not be included in the
arbitration because he is not a party to the agreement. However, the Plan
Document includes a provision that states that “Arbitration applies to any and
all covered disputes, controversies or claims whether asserted by the employee
against the Company and/or against any employee, officer or other alleged agent
of the Company.” (Ripak Decl., Ex. A, p. 6.) Based on this clause, Mr. Quijada
may be a party to the arbitration.
ORDER
1. Defendants’
motion to compel arbitration is GRANTED.