Judge: Douglas W. Stern, Case: 23STCV12741, Date: 2023-08-07 Tentative Ruling
Case Number: 23STCV12741 Hearing Date: August 7, 2023 Dept: 68
Marques
Ridley vs. Loandepot.com, LLC, Case No. 23STCV12741
Motion to Compel
Arbitration
Moving
Party – Defendant loanDepot.com, LLC
Opposing
Party – Plaintiff Marques Ridley
Background and Moving Party’s Position
Plaintiff Marques Ridley (Plaintiff)
was employed by Defendant loanDepot.com, LLC (Defendant). Plaintiff filed a
complaint alleging several causes of action related to discrimination and
retaliation.
On February 5, 2021, Plaintiff
signed a written Arbitration Agreement in connection with his employment, in
which it was agreed that he would arbitrate disputes related to his employment.
(Wartenberg Decl., Ex. B.) The Arbitration Agreement indicates that it will be
subject to the JAMS Employment Arbitration Rules & Procedures (Wartenberg
Decl., Ex B, at p. 3, ¶ 2)
Based on this, Defendant has moved
to compel arbitration, claiming that Plaintiff’s claims are arbitrable under
the Agreement.
Opposing Party’s Position
Plaintiff argues that the Agreement is
procedurally and substantively unconscionable. Plaintiff argues that the
Agreement is unconscionable because it is a contract of adhesion that he had to
sign for his employment and because a separately signed Confidentiality
Agreement makes the Arbitration Agreement substantively unconscionable.
Reply
Defendant argues in its reply that
the Confidentiality Agreement is a totally separate agreement from the
Arbitration Agreement. Defendant also argues that the Arbitration Agreement
being a contract of adhesion would not make it unconscionable.
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
Plaintiff does not dispute the existence of the agreement
or that he signed the agreement.
B. Unconscionability
Plaintiff argues that
the arbitration agreement is procedurally and substantively unconscionable.
1. Procedural
Unconsionability
Plaintiff’s argument
that the arbitration agreement is procedurally unconscionable because it is a
contract of adhesion 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. He only
claims that he had to sign the Agreement as a condition of his employment. This
does not make the Agreement procedurally unconscionable.
Plaintiff also argues
that the Arbitration Agreement does not identify which rules would govern
arbitration; however, the Agreement clearly states that the JAMS Employment
Arbitration Rules & Procedures would govern arbitration. (Wartenberg Decl.,
Ex. B, at p. 3, ¶ 2.)
The Court finds that
the Arbitration 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 language of the Arbitration Agreement does not allow him to obtain
equitable relief and that the liquidated damages provision is unconscionable. First,
Plaintiff’s argument that he cannot obtain equitable relief is based on provisions
in the Confidentiality Agreement. However, because that document should be read
separately, this argument does not hold merit. Second, his argument regarding
liquidated damages is also based on the Confidentiality Agreement, which is not
relevant here.
The case which
Plaintiff cites in support of his argument that the Arbitration and
Confidentiality Agreements should be read together, Alberto v. Cambrian
Homecare (2023) 91 Cal.App.5th 482, is distinguishable from this case. In
that case, the agreements were meant to be read together, or at least did not
have any language defining the agreements as separate. In this case, the
Arbitration and Confidentiality Agreements are separate, fully-integrated
contracts with distinct purposes.
The Court finds that
the Arbitration Agreement is not substantively unconscionable.
ORDER
1. Defendant
loanDepot.com’s Motion to Compel Arbitration is granted.
2. This
action is stayed pending arbitration.