Judge: Gail Killefer, Case: 22STCV13224, Date: 2022-10-20 Tentative Ruling
Case Number: 22STCV13224 Hearing Date: October 20, 2022 Dept: 37
HEARING DATE: October 20, 2022
CASE NUMBER: 22STCV13224
CASE NAME: Selena Towell v. Move, Inc., et al.
MOVING PARTIES: Defendants, Move, Inc. dba Move
Holdings, Move Sales Inc., News Corporate Services, Inc.
OPPOSING PARTY: Plaintiff Selena Towell
TRIAL DATE: None
PROOF OF SERVICE: OK
MOTION: Defendants’ Motion to Compel
Arbitration and for a Stay of Proceedings
OPPOSITION: September 29, 2022
REPLY: October 13, 2022
TENTATIVE: Defendants’ motion is granted. Plaintiff
is ordered to arbitrate her claims with Defendants. The action is stayed
pending the completion of arbitration or further order of the court. The court
sets an order to show cause re status of the arbitration for October 20, 2023, at
8:30 a.m. in Department 37. Defendants are to give notice.
This action arises out of Selena Towell’s (“Plaintiff”)
employment as a Digital Sales Consultant Associate with Move, Inc., Move Sales,
Inc., and News Corporate Services, Inc. (“Defendants”). Plaintiff alleges that she
worked for Defendants from December 2020 to December 13, 2021.
Plaintiff’s operative Complaint alleges the following causes
of action: (1) disability discrimination; (2) failure to engage in the
interactive process; (3) failure to provide reasonable accommodation; (4)
retaliation; (5) failure to prevent discrimination/retaliation; (6) violation
of right to medical privacy; and (7) wrongful termination in violation of
public policy.
Defendants now move to compel arbitration. Plaintiff opposes
the motion.
Evidentiary Objections
Plaintiff’s Objections to Defendants’ Evidence,
Materials, Declarations
Objection 1-5: overruled. As Director of Human Resources,
Declarant has established foundation and personal knowledge.
Defendants’ Objections to Plaintiff’s Evidence,
Declarations, Materials
Objection 1-4: sustained, inadmissible legal conclusion.
Objection 5: overruled. Declarant’s attestations of receipt
are not a legal conclusion.
“California law reflects a strong public
policy in favor of arbitration as a relatively quick and inexpensive method for
resolving disputes. To further that
policy, Code of Civil Procedure, section 1281.2 requires a trial court to
enforce a written arbitration agreement unless one of three limited exceptions
applies. Those statutory exceptions
arise where (1) a party waives the right to arbitration; (2) grounds exist for
revoking the arbitration agreement; and (3) pending litigation with a third
party creates the possibility of conflicting rulings on common factual or legal
issues.” (CCP § 1281.2; Acquire II, Ltd. v. Colton Real Estate Group
(2013) 213 Cal.App.4th 959, 967.)
Similarly, public policy under federal law favors arbitration and the
fundamental principle that arbitration is a matter of contract and that courts
must place arbitration agreements on an equal footing with other contracts and
enforce them according to their terms. (AT&T
Mobility LLC v. Concepcion
(2011) 563 U.S. 333, 339.)
In
deciding a motion or petition to compel arbitration, trial courts must first
decide whether an enforceable arbitration agreement exists between the parties
and then determine whether the claims are covered within the scope of the
agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.) The opposing party has the burden to
establish any defense to enforcement. (Gatton v. T-Mobile USA, Inc. (2007) 152
Cal.App.4th 571, 579 [“The petitioner ... bears the burden of proving the
existence of a valid arbitration agreement and the opposing party, plaintiffs
here, bears the burden of proving any fact necessary to its defense.”].)
Here,
attached to the declaration of Jamie Grooters (“Grooters”), Defendants provide
a copy of the updated Employee Handbook which includes “Mutual Agreement to
Arbitrate Disputes” and Defendants’ Motion to Compel Binding Arbitration points
to the relevant language therein.
(Motion, 1-2, Grooters Decl. ¶¿7, Ex. A.)
A motion to compel arbitration or stay proceedings must
state verbatim the provisions providing for arbitration or must have a copy of
them attached. (Cal. Rules of Court,
rule 3.1330.)
A party may demonstrate express acceptance of the
arbitration agreement in order to be bound (e.g., Mago v. Shearson Lehman Hutton Inc. (9th Cir. 1992) 956 F.2d 932
[agreement to arbitrate included in job application]; Nghiem v. NEC Electronic, Inc. (9th Cir. 1994) 25 F.3d 1437
[agreement to arbitrate included in handbook executed by employee]; Lagatree v. Luce, Forward, Hamilton & Scripps
(1999) 74 Cal. App. 4th 1105 [88 Cal. Rptr. 2d 664] [employer may terminate
employee who refuses to sign agreement to arbitrate]) or implied-in-fact in
fact acceptance (Asmus v. Pacific Bell
(2000) 23 Cal. 4th 1, 11 [96 Cal. Rptr. 2d 179, 999 P.2d 71] [implied
acceptance of changed rules regarding job security]; DiGiacinto v. Ameriko-Omserv Corp. (1997) 59 Cal. App. 4th 629, 635
[69 Cal. Rptr. 2d 300] [implied acceptance of changed compensation
rules]). (Craig v. Brown & Root (2000) 84 Cal.App.4th 416, 420 (Craig).)
“A signed agreement is not necessary, however, and a party’s
acceptance [of an agreement to arbitrate] may be implied in fact….” (Pinnacle
Museum Tower Ass’n v. Pinnacle Market Dev. (US), LLC (2012) 55 Cal.4th 223,
23 (Pinnacle), cited in Pet. Mem.
6.) “An arbitration clause within a
contract may be binding on a party even if the party never actually read the
clause.” (Ibid.) “The content of a writing may be proved by otherwise
admissible secondary evidence,” except when “a genuine dispute exists
concerning material terms of the writing,” or admitting the secondary evidence
“would be unfair.” (Evid. Code § 1521(a).) A party seeking to introduce
secondary evidence to prove the contents of a lost writing must demonstrate
that “ “a bona fide and diligent search has been unsuccessfully made for it”” (Dart
Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1068,
quoting Folsom Executors v. Scott (1856) 6 Cal.4th 460, 461.)
Defendant argues that Plaintiff must be compelled to
arbitrate because Plaintiff remained an employee of Defendants after receiving
the Arbitration Agreement on May 20, 2021, impliedly agreeing to arbitrate all
disputes. (Motion, 8.)
Plaintiff signed a document titled “Mutual Agreement to
Arbitrate Disputes.” (“Arbitration Agreement”) (Id.; Grooters Decl. Exh.
A.) The Arbitration Agreement provides as follows:
“3.7 Mutual Agreement to Arbitrate Disputes The
Company believes that disputes should be resolved in a fair and equitable
manner. For this reason, as a condition of your employment with the Company,
you and the Company mutually agree to arbitrate claims in accordance with this
policy. This means those claims covered by this policy will be decided by
binding arbitration before a neutral arbitrator and both you and the Company
give up the right to bring such claims in court and/or to have a jury decide
them.
3.7.1 Claims Subject to Arbitration Except for those
claims that are expressly excluded from arbitration under this policy, the
Company and its employees mutually consent to resolve by final and binding
arbitration any and all disputes, claims, or controversies of any kind or
nature (“Claim(s)”) between them. The Claims subject to arbitration include,
but are not limited to:
¿ any Claim you may have against the Company, including its
past, present, and future parent, affiliated, and subsidiary entities (“Company
Entities”), and/or the Company Entities’ respective past, present, and future
employees, independent contractors, agents, officers, directors, board members,
shareholders, successors, assigns, benefit plans and sponsors, fiduciaries,
administrators, or insurers, arising from, related to, or in connection with:
¿ Your seeking employment with, your employment with, and/or
the termination of your employment with, any of the Company Entities;
¿ any federal, state, or local law or regulation prohibiting
discrimination, harassment, or retaliation based on race, color, religion,
national origin, sex, age, disability, sexual orientation, marital status,
gender identity or expression, genetic information, military or veteran status,
or any other characteristic protected by law;
¿ any alleged breach of contract or covenant, whether
express or implied;
¿ any alleged violation of any federal, state, local, or
other constitution, statute, ordinance, regulation, common law, or public
policy;
¿ any dispute regarding wages, hours, commissions, incentive
pay, bonuses, or other compensation or payment;
¿ any personal, emotional, physical, economic, property, or
any other injury, loss, or harm; and
¿ any Claims that any of the Company Entities may have
against you, including, without limitation, any alleged breach of contract or
covenant, whether express or implied, and any alleged trade secret violations.
This agreement to arbitrate will survive the termination of your employment
with any of the Company Entities, and it shall apply to any Claims whether they
arise or are asserted during or after the termination of that employment
relationship.
3.7.2 Claims Not Subject to Arbitration Claims that
are not subject to arbitration include those: (a) for workers’ compensation
benefits; (b) for unemployment insurance benefits filed with the appropriate
government entity; (c) arising under a benefit plan where the plan expressly
specifies a separate arbitration procedure; (d) arising under the National
Labor Relations Act and filed through a charge with the National Labor
Relations Board; and (e) which are otherwise expressly prohibited under the
Federal Arbitration Act or other federal law from being subject to arbitration.
In addition, you are not precluded from filing an administrative charge or
complaint with the appropriate government entity if such filing is protected or
required by law. However, to the full extent permitted by law, any Claims
seeking monetary relief must be asserted in arbitration.
...
3.7.4 Procedure Any arbitration will be filed with and
conducted by JAMS. The arbitration shall be held at the closest office of JAMS
to where you report/reported to work or at a location mutually agreed to by the
parties to the arbitration. The arbitration will be conducted pursuant to the
JAMS Employment Arbitration Rules and Procedures (“Rules”) in effect at the
time the demand for arbitration is filed, except as modified in this paragraph.
Employee understands that he or she may obtain a copy of the most current Rules
by visiting JAMS’ website, currently located at
http://www.jamsadr.com/rules-employment-arbitration/, or by sending a written
request to the Company’s General Counsel at 30700 Russell Ranch Road, Suite
1000, Westlake Village, CA 91362. If JAMS later modifies the Rules, the
modified Rules will apply unless the parties mutually agree in writing not to
apply the modified Rules. If JAMS is unable or unwilling to accept the matter
for any reason, the parties to the arbitration will submit the matter to a
comparable arbitration service, which will apply the then-current Rules unless
otherwise agreed to by the parties to the arbitration and as modified by in
this paragraph. Arbitration shall be initiated and all Claims shall be decided
by a single, neutral arbitrator. The arbitrator shall modify the applicable
procedures as necessary to make this agreement enforceable under relevant law,
including by ensuring that arbitration of Claims for unpaid wages is accessible
and affordable.
3.7.5 Discovery and Motions The parties to the
arbitration shall be entitled to conduct reasonable discovery and the
arbitrator shall have the authority to determine what constitutes reasonable
discovery. The arbitrator will have the authority to hear and grant motions,
including but not limited to motions for summary judgment and summary
adjudication.
...
3.7.7 Arbitration Fees and Costs. To the extent
required by law, Company shall bear all reasonable and necessary fees and costs
of the arbitration forum that Employee would not otherwise be required to bear
if the Claims were brought in court. In all other circumstances, each party
shall pay its, his or her own arbitration fees and costs. The parties to the
arbitration shall be responsible for their own attorneys’ fees, except that the
arbitrator shall have the authority to award attorneys’ fees and costs to the
prevailing party in accordance with the substantive law governing the Claims.
Any controversy regarding the payment of fees and costs shall be decided by the
arbitrator.
3.7.8 Applicable Law The arbitrator shall apply the
substantive federal, state, and/or local law of where Employee is/was employed,
as applicable, to any Claims and defenses asserted by the parties to the
arbitration. The Federal Arbitration Act shall provide the procedural and
substantive governing law for the interpretation and enforcement of this
agreement to arbitrate, and for review for legal error, confirmation,
correction or vacatur of the arbitrator’s final award.
(Grooters Decl., Exh. A, 20-24.)
Grooters further attests Plaintiff took her medical leave of
absence on May 26, 2021, after receiving the new Handbook and Arbitration
Agreement. (Grooters Decl. ¶15.) “[Plaintiff] remained employed at [Defendants]
while on leave for another seven months after receiving the updated Handbook.”
(Id.) An arbitration agreement need not include both parties’ signatures
to be enforceable. (Serafin v. Balco Properties, Ltd. LLC (2015) 235
Cal.App.4th 165, 176 [existence of agreement to arbitrate can be confirmed
through evidence of the parties’ conduct.]) Defendants correctly cite Diaz
v. Sohnen Enterprises, (2019) 34 Cal. App. 5th 128, 129-131, for the
contention that employees who have remained employed after receiving an
arbitration agreement have been found to have entered an implied-in-fact
arbitration agreement. (Motion, 8.)
In opposition, Plaintiff contends no agreement has been
established and Defendant do “not have any evidence that Plaintiff received and
read the Handbook or Arbitration Policy contained therein.” (Opposition, 3-4.)
However, Plaintiff does not address the declarations submitted by Defendants
which show the Handbook and Arbitration Agreement were sent to Plaintiff before
she took her medical leave. (Id.) Plaintiff disputes ever receiving
notification of the Handbook and Arbitration policy but is refuted by
Defendants’ director of Human Resources who attests Plaintiff received such a
notification on May 20, 2021. (Opp., 4; Grooters Decl. ¶ 13.) Plaintiff further
contends
“Move has submitted no evidence establishing that Plaintiff
was the only person who had access to the emails in that inbox. Because the
Email was sent to Plaintiff’s company email account, others within the company
who have access to her email inbox could have opened the Email. Moreover, Move
has not presented any evidence that Plaintiff clicked on the hyperlink in the
Email and as a result Plaintiff received a copy of the Handbook, or any
evidence that demonstrates Plaintiff read the Handbook and/or the Arbitration
Policy contained therein.” (Opp., 5.)
Plaintiff fails to explain, however, why Defendants could
not have sent the notification to Plaintiff’s work email, or why Defendants
must present evidence that Plaintiff read the Handbook and the Arbitration
Agreement. Imposing such a standard upon Defendants would rewrite the standard
for the court’s inquiry at this junction.
Plaintiff also contends that any consent to the Arbitration
Agreement was fraudulently obtained as there wasn’t enough notice to Plaintiff
when the email correspondence was allegedly opened. (Opp., 10-11.)
In reply, Defendants correctly contend that a signed
agreement is not needed to show consent and that Defendants have submitted
several declarations to authenticate Plaintiff was notified of the new Handbook
and Arbitration Agreement. (Reply, 6-8.) Defendants further correctly point out
that they need not show evidence that Plaintiff read the agreement for it to be
in effect, and that such an arbitration agreement can be included in an
employee handbook. (Reply, 9-11.)
Defendants also correctly point out Plaintiff fails to
provide any support for her contentions of fraud in obtaining this consent.
(Reply, 13.)
““It is well established, in the absence of fraud, overreaching
or excusable neglect, that one who signs an instrument may not avoid the impact
of its terms on the ground that he failed to read the instrument before signing
it.”” (Allan v. Snow Summit, Inc. (1996) 51 Cal.App.4th 1358, 1376.)
Plaintiff’s statement that she was never told she had to read and understand
the Arbitration Agreement before impliedly consenting by continuing employment is
insufficient to demonstrate that Plaintiff did not consent to the Agreement,
including its arbitration provision. Additionally, Plaintiff’s remaining
arguments about Defendants’ alleged fraudulent inducement
also fail. Plaintiff cites to no authority or evidence to show Defendants’
conduct constitutes fraudulent inducement, and the court is not
persuaded by Plaintiff’s arguments.
The court finds a valid arbitration agreement to be in place
here, as Plaintiff has failed to show that Defendants provided insufficient
notice.
The finding that [an] arbitration provision was part of a
non-negotiated employment agreement establishes, by itself, some degree of
procedural unconscionability.”¿ (Ajamian¿v. CantorCO2e, L.P.¿(2012) 203
Cal.App.4th 771, 796;¿Roman v. Superior Court¿(2009) 172 Cal.App.4th
1462, 1470 [“adhesion contracts in the employment context typically contain
some measure of procedural unconscionability”].)¿¿
Plaintiff contends that the Agreement is procedurally
unconscionable because the Agreement is an adhesive contract and Plaintiff as
required to sign it on a take-it-or-leave-it basis, as a condition of her
employment with Defendants. (Opposition, 12-13.)
In reply, Defendants cite Samura v. Kaiser Found. Health
Plan, Inc. (1993) 17 Cal. App. 4th 1284, 1296, and correctly contend that a
showing of procedural unconscionability must include a showing of unequal
bargaining power and a lack of disclosure of material contract provisions.
(Reply, 14-15.) Defendants correctly point out Plaintiff has failed to dispute
that “she made no attempt to negotiate and has no knowledge whether or not the
Arbitration Agreement was actually negotiable.” (Id.)
The court finds that the Agreement is minimally procedurally
unconscionable. While the ability to negotiate the Arbitration Agreement and
the conditioning of further employment on the Arbitration Agreement are in
dispute, the unequal bargaining power between Plaintiff and Defendants made the
Agreement minimally procedurally unconscionable.
Plaintiff contends that the Agreement is also substantively
unconscionable because it is unilateral in its binding effect and because it
imposes costs for arbitration. (Opposition, 13-16.) Additionally, Plaintiff
contends that the Arbitration Agreement is also substantively unconscionable as
it allows a retroactive modification of the agreement by Defendants. (Id.)
In reply, Defendants contend that Arbitration Agreement is
not one-sided and does not support substantive unconscionability because the
California precedent permits such a provision. (Reply, 16-17.) Defendants
correctly point to the language of the Arbitration Agreement to show it binds
both parties here. (Reply, 17.) Further, Defendants contend any alleged
retroactive modification would not make the Arbitration Agreement illusory, in
light of several supporting authorities. (Reply, 18.) Any attorney fees awards
are not mandatory, and authority to grant any fee awards is housed with the
arbitrator. (Reply, 19.) As such, Defendants contend there is no substantive
unconscionability here.
The court agrees with Defendants that the Agreement is not
substantively unconscionable. As discussed above, the Agreement’s arbitration
provision is mutual, and provides the arbitrator with the authority to award any
fee awards.
Both procedural and substantive unconscionability must be
present in order for a court to exercise its discretion to refuse to enforce a
valid arbitration agreement. Armendariz
v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.
Thus, because the court finds that the Agreement is not
procedurally unconscionable, the court does not exercise its discretion to
refuse to enforce the Agreement.
For these reasons, Defendants’ motion to compel arbitration
is granted.
Conclusion